Hacken finds Tron’s $91.3 billion USDT exposed to 2-of-3 multisig key risk

A security assessment by blockchain auditor Hacken has found that roughly $91.3 billion worth of USDT on the Tron network is governed by a 2-of-3 multisignature setup that could give an attacker control over minting, freezing and other contract functions if two of the three signing keys were compromised.

The report did not find evidence that Tether’s keys have been compromised or that hackers have stolen USDT.Instead, it states what could happen if two of the keys were ever obtained by an attacker.

Two keys could control critical USDT functions

Tether’s smart contract gives its administrators significant control over USDT.These functions include minting new tokens, freezing addresses and changing important settings within the contract.

Hacken said an attacker who obtained two of the three signing keys could change the contract’s ownership and gain control over these functions.

That could allow the attacker to mint new USDT, freeze addresses, clear frozen balances or introduce transfer fees without gaining access to individual users’ wallets.

The key point is that the multisignature wallet does not hold the $91.3 billion in USDT.Instead, it controls the smart contract that governs the tokens.

That distinction matters because compromising the keys would not mean directly stealing $91.3 billion from users. It could instead give an attacker control over the rules governing a huge amount of USDT.

Why the $91.3 billion figure matters

The amount involved is significant because USDT is the largest stablecoin in the cryptocurrency market.

On Tron, approximately $91.3 billion in USDT is linked to the contract examined by Hacken, representing about half of the stablecoin’s circulating supply.

The assessment also found that the contract has no built-in delay, cancellation process or reliable way to revoke an approved action once the required signatures have been provided.

This means that if two authorised keys were compromised, there may be limited time or technical mechanisms available to stop an attacker from using them.

The concern is therefore not that $91.3 billion is currently being stolen.It is that the control structure could create a very large impact if the required keys were ever compromised.

Tether’s security model relies on multiple keys

Tether already uses a multisignature system to reduce the risk of one person controlling the token issuance process.

Tether’s own documentation says multiple private authorization keys are required to create Tether Tokens. The company says this model is designed to prevent a single person from authorising tokens alone.

Tether also says its private keys control the ability to issue USDT, making the security of those keys a major priority.

The company says it reduces exposure by issuing tokens in batches rather than requiring its private keys to be used every time a customer requests USDT.

What happens if the number of keys required to take control of the contract is itself too small?

The same keys may create a wider risk. Hacken also identified another concern involving the use of signing keys across different blockchains.

According to the assessment, Tether reuses the same six signing keys across Ethereum, Avalanche and Celo. That creates a potential cross-chain risk.

If the same keys were compromised, the consequences could extend beyond one blockchain rather than being limited to the Tron network.

This does not mean that all of these networks have been compromised.There is currently no evidence that Tether’s keys have been stolen.

But it means that a single successful attack against the relevant signing infrastructure could potentially have consequences across multiple networks.

USDT can be changed by its administrators

The concerns also shows how much control Tether retains over USDT even though the token operates on public block chain.

Tether’s own documentation says administrators can perform functions such as minting, freezing, unfreezing, revoking and burning tokens.

Tether also says it can, in certain circumstances, seize and destroy tokens in response to requests from governments, law enforcement agencies or other authorities.

These controls give Tether the ability to respond to threats and comply with legal demands.

But they also mean that the security of the administrative keys is critical to the wider USDT ecosystem. No evidence of an active attack

Hacken did not report that attackers had obtained Tether’s keys.There is also no indication that users’ USDT wallets have been compromised as a result of the findings.Instead, the assessment identifies a potential weakness in the way control over the smart contract is structured.

Hacken gave the USDT smart contract a cybersecurity score of 3.3 out of 10 and also raised concerns about the absence of an automatic reserve check and a limit on the number of tokens that can be minted.

That does not mean USDT is currently unsafe.It means that the consequences of a successful compromise could be unusually large.

What the vulnerability means for USDT

The bigger question is not whether $91.3 billion in USDT is currently at risk of being stolen. It is how much damage could be caused if an attacker gained control of the keys responsible for administering the token.

If unauthorised USDT were created, markets would have to determine whether those tokens were legitimate.

A large amount of unbacked or unauthorised USDT entering the market could damage confidence in the stablecoin and potentially create wider disruption across exchanges and decentralised finance platforms.

For now, however, USDT continues to operate normally and there is no evidence of a successful attack.