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Hacked Bitcoin Exchange Zaif Discontinues New Registrations

Last Updated March 4, 2021 3:47 PM
Yashu Gola
Last Updated March 4, 2021 3:47 PM

Tech Bureau Inc., the owner of Zaif exchange, decided to suspend new account registrations at their trading platform temporarily.

The decision came on September 28, 14 days after a hacking incident took place at Zaif and caused the crypto exchange more than $60 million worth of damages. Tech Bureau said in its press statement that it would resume new registrations as they decide on a concrete strategy to compensate their customers. It has reached out to Fisco, another Japanese investment management company, for a $44 billion bailout agreement. The said financial support expects to back customers’ financial assets but, according to a new development on October 1, the deal is still under examination.

“After concluding the basic agreement, we are advancing consultation and negotiations for concluding a formal contract, there is no change in the policy to ensure thorough compensation for customer assets, and we are continuing to consider the details of specific response…As soon as the content is confirmed, we will report it promptly.” – Tech Bureau said.

As a clear reimbursement policy takes shape, Zaif believes it would be ideal to keep the new customers away from signing up on its Bitcoin exchange. The suspension, according to Tech Bureau, will not affect existing customers, including those whose identity verifications are still open.

FSA Launches Investigation

Japan’s Financial Services Agency (FSA) confirmed that it is investigating the security practices at Zaif exchange. The agency has already begun examining the user protection systems installed in Tech Bureau offices.

FSA had served two consecutive warnings to the company – in March and June – to improve their business operations. The agency had also reached out to other cryptocurrency exchanges with the same advisory, reportedly in the wake of Coincheck’s 509-million-dollar-hack that took place in January.

From January to June, Japanese police has already identified more than 160 cryptocurrency thefts totaling circa $532 million. More massive thefts received attention than smaller hacks. Nevertheless, the agencies never recovered stolen funds.

Hackers have remitted the stolen Zaif funds to exchanges offshore. The recipient wallets reportedly have not gone through any KYC/AML guidelines, which could make it difficult for Japanese police to recover the digital assets.

Featured image from Shutterstock.