$60M Disappears From A Crypto Exchange Wallet

Japan’s Zaif crypto exchange and its parent company, Tech Bureau Inc, revealed via a post-mortem press release that it fell victim to a security breach on Wednesday, despite the fact that the apparent hack occurred on Friday, September 14th. In the aforementioned release, the crypto exchange highlighted the unfortunate event, outlining the details of the hack and how it should affect its business moving forward.

On September 14th, Zaif’s deposit and withdrawal feature unexpectedly failed to work, which caused “serious inconvenience to [the exchange’s] customers.” It was revealed that this shutdown wasn’t the result of any-old wallet maintenance issue, but rather, due to suspicions that the exchange’s hot wallets were breached by unauthorized individuals, which still remained unnamed.

Upon an internal investigation, the platform found that the crypto holdings that were stolen include a staggering 5,996 Bitcoin and an unspecified amount of both Monacoin (MONA) and Bitcoin Cash (BCH). Regardless, it was noted that the cryptocurrencies stolen amount to at least a value of 6.7 billion Japanese Yen, or approximately $59 million USD at the time of writing.

Explaining why the MONA and BCH figures are still unknown, the release noted that it still hasn’t restarted its internal server in a bid to try to mitigate damage, even during the investigation stage of this case.

Elaborating on more of the details that pertain to the hack, the Japan-based Zaif pointed out that 4.5 billion of the Yen that was stolen were consumer funds, while the rest of the funds, worth 2.2 billion Yen, were company-owned digital assets.

So how is the firm responding? You may ask.

Well, Zaif and its parent company explained that it has already been in discussion with local authorities, reportedly conveying a damage report in a bid to catch those who are behind the hack and to ensure that such an event doesn’t occur again.

Not only did the firm contact local authorities, but it was also explained that Zaif has sought help from Fisco Digital Asset Group, who will provide 5 billion yen ($44 million) in compensation in exchange for the Jasdaq-listed firm to acquire a majority stake in Zaif, while also releasing half of the exchange’s directors and corporate auditors in an apparent show of force.

These two aforementioned moves show that the platform, while relatively unknown, is dead set on amending this precarious situation, even if this comes at a high cost.

Surprisingly enough, the market was seemingly unaffected by this hack, which is evidently different than similar occurrences that saw Bithumb, CoinCheck, and CoinRail lose large sums (tens, if not hundreds of millions of dollars) of customer funds over the course of the past year or so.

Japanese FSA Remains Wary

As reported by Ethereum World News, Japan’s Financial Services Agency, the Asian country’s equivalent of US’ SEC, has begun to crack down on cryptocurrency exchanges, whether they may be established or not.

But some believe that the Japanese cryptocurrency community shouldn’t be worried, as an FSA Commissioner recently revealed that he has no intentions to curb the development, maturation, and adoption of cryptocurrencies and blockchain technologies.

Photo by Lukas on Unsplash
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