Tether Token (USDT) Security Audit Report

Tether Token (USDT) security audit, conducted by the Callisto Network Security Department in July 2019.

Tether Token (USDT) Specificities

Audit Request

Audit Top 200 CoinMarketCap tokens.

Symbol      : USDT
Name        : Tether USD

Deployed at:

https://etherscan.io/address/0xdac17f958d2ee523a2206206994597c13d831ec7#contracts

Source Code:

https://etherscan.io/address/0xdac17f958d2ee523a2206206994597c13d831ec7#contracts

Disclosure policy

Public.

Platform:

ETH.

Number of lines:

252.

Tether Token (USDT) Smart Contract Security Audit Report

Are Your Funds Safe?

1. In scope

- USDT solidity contract

2. Findings

In total, 7 issues were reported including:

3 low severity issues.
4 owner privileges (the ability of an owner to manipulate contract, may be risky for investors).

No critical security issues were found.

2.1. Owner Privileges

Severity: Owner Privileges.

Description:

Pause/unpause transfer and transferFrom.
Blacklist users addresses individualy from using transfer and transferFrom through addBlackList and removeBlackList. And burn blacklisted users assets (please note that the assets are supposed to be backed in a 1:1 ratio) using destroyBlackFunds function.
A maximal fee percentage of 20/10000 can be applied per transaction with a maximal value of 50 USDT, check here.
Owner can upgrade contract using deprecate and implement any logic in the new contract. And even if the new contract will be audited, at any time possible to change the address of the new contract again to not audited and insecure.

2.2. Transfert to Address (0)

Severity: low.

Description:

transfer and transferFrom allow the destination address to be equal to zero, meaning that users fund can be lost if sent to it by mistake.

Code snippet:

    function transfer(address _to, uint _value) public onlyPayloadSize(2 * 32) {
        uint fee = (_value.mul(basisPointsRate)).div(10000);
        if (fee > maximumFee) {
            fee = maximumFee;
        }
        uint sendAmount = _value.sub(fee);
        balances[msg.sender] = balances[msg.sender].sub(_value);
        balances[_to] = balances[_to].add(sendAmount);
        if (fee > 0) {
            balances[owner] = balances[owner].add(fee);
            Transfer(msg.sender, owner, fee);
        }
        Transfer(msg.sender, _to, sendAmount);
    }

function transferFrom(address _from, address _to, uint _value) public onlyPayloadSize(3 * 32) {
        var _allowance = allowed[_from][msg.sender];

        uint fee = (_value.mul(basisPointsRate)).div(10000);
        if (fee > maximumFee) {
            fee = maximumFee;
        }
        if (_allowance < MAX_UINT) {
            allowed[_from][msg.sender] = _allowance.sub(_value);
        }
        uint sendAmount = _value.sub(fee);
        balances[_from] = balances[_from].sub(_value);
        balances[_to] = balances[_to].add(sendAmount);
        if (fee > 0) {
            balances[owner] = balances[owner].add(fee);
            Transfer(_from, owner, fee);
        }
        Transfer(_from, _to, sendAmount);
    }

2.3. Not Emitted Transfert Event

Severity: low.

Description:

When issuing or redeeming tokens a transfer event should be emitted back and forth to address(0).
ERC20 standard: “A token contract which creates new tokens SHOULD trigger a Transfer event with the _from address set to 0x0 when tokens are created”. the same can be deducted when redeeming or burning tokens.

Same issue is applicable for TetherToken constructor.

Code snippet:

https://gist.github.com/RideSolo/24c79eb34b565ade477ec89c2af49a5b#file-usdt-sol-L406

https://gist.github.com/RideSolo/24c79eb34b565ade477ec89c2af49a5b#file-usdt-sol-L420

2.4. Known vulnerabilities of ERC-20 token

Severity: low.

Description:

It is possible to double withdrawal attack. More details here
Lack of transaction handling mechanism issue. WARNING! This is a very common issue and it already caused millions of dollars losses for lots of token users! More details here.

Recommendation: