Almost 1 Million USDT Lost With Single User Error
An anonymous user accidentally sent $ 1 million in USDT to Swerve’s governance contract.
These funds initially appeared to be permanently locked in, but now a refund appears possible thanks to Tether’s help.
Binance plans to set up a security system in order to prevent such incidents from happening in the future
As DeFi continues to develop at light speed, a series of regular events keep reminding us of its potential dangers, especially in inexperienced hands.
According to a post published on September 8, a user accidentally sent a million dollars in Tether (USDT) to the wrong address.
A novice just sent 1 million USDT directly to the Swerve Finance contract.
Swerve Finance, a fork of the popular Bitcoin Trader, is a fair liquidity pool launched on Ethereum and designed for stablecoin trading. The user in question attempted to deposit funds on Swerve, but sent them directly to the pool governance contract.
This action is similar to sending an email to a non-reply address. However, in this case, there is no “send without reception” message. The user no longer owns the email once sent, and the email itself was worth a million dollars.
The cancellation of such a transaction via Swerve is only possible if the smart contract has a function that allows it. Since Swerve does not have this feature, USDTs deposited at the address therefore appeared to be stuck and permanently lost.
Tether USDT Burn Treasury
However, shortly after the incident, Tether technical director Paolo Arduino pledged to help recover the funds. Mr Arduino urged the user to apply to Tether Customer Service and said that if the funds were in ERC20, they “should be recoverable”.
In this case, the user simply needs to prove that the funds have been “burned”, and Tether returns them in full.
Changpeng Zhao, founder and CEO of Binance , responded to the news by saying that the exchange will work on putting in place safeguards to prevent such mistakes from happening in the future.
We will be implementing a feature to prevent people from sending funds by mistake to contract addresses we support from #Binance.
We also refunded people who inadvertently sent BNBs to the smart contract address when we switched back to mainnet. Someone won $ 250,000.
This is not the first time that someone has sent LP funds directly to a governance contract. On August 30, an exchange called Gate.io allegedly made the same mistake with SushiSwap , for an amount of $ 400,000.