In the second major hack of a Japanese cryptocurrency exchange this year, some 6.7 billion yen ($60 million) in cryptocurrencies were stolen from the wallets of Zaif of which 4.5 billion yen ($40 million) belonged to customers. Tech Bureau, operator of cryptocurrency exchange Zaif, confirmed…
In the second major hack of a Japanese cryptocurrency exchange this year, some 6.7 billion yen ($60 million) in cryptocurrencies were stolen from the wallets of Zaif of which 4.5 billion yen ($40 million) belonged to customers.
Tech Bureau, operator of cryptocurrency exchange Zaif, confirmed the hack occurred between 1700 and 1900 local time on September 14 wherein attackers managed to breach the hot wallets (online, connected wallets) of the exchange containing Bitcoin, Bitcoin Cash and Monacoin.
According to Nikkei, the operator did not detect the hack until September 17, suspending deposits and withdrawal services upon discovery. Tech Bureau approached the Financial Services Agency (FSA), Japan’s financial regulator, to report the breach with an investigation currently underway.
While determining that 5,966 bitcoins were stolen as a result of the breach, Zaif says it is currently unable to ascertain the exact amount of Monacoin (MONA) and Bitcoin Cash (BCH) stolen.
“The reason for not being able to determine the damaged quantity at the moment is that the server is not restarted until the reliable safety can be confirmed in order to prevent secondary damage,” Zaif said in translated statements. “As soon as the quantity of the lost virtual currency is determined, we will report it promptly.”
In a quick solution to compensate customers for their losses, Tech Bureau revealed it is selling a majority of its shares to the Fisco Digital Asset Group, a publicly-listed financial services corporation in Japan. The exchange has already signed a basic agreement that will see a cash injection of 5 billion yen ($44.59 million) in exchange for a majority ownership. The funds will directly be used to replace the 4.5 billion yen ($40 million) stolen from customer accounts.
It’s notable that Tech Bureau’s Zaif was one among six licensed cryptocurrency exchanges that received a ‘business improvement order’ from the FSA in June, three months before the hack.
The domestic cryptocurrency is already under increased scrutiny by the financial regulator following a $530 million theft of cryptocurrency from Tokyo-based Coincheck, an unlicensed exchange, earlier in January.
While a dampener, the crypto thefts haven’t quelled the burgeoning appetite for cryptocurrency trading in Japan. Last week, the FSA revealed it is expecting in excess of 160 applications from companies looking to launch cryptocurrency exchanges in a regulated market.
Featured image from Shutterstock.
Last modified: January 24, 2020 11:00 PM UTC