Hackers steal Ksh 6 Billion in Bitcoins from Japanese Cryptoexchange

Written by
japanese

Hackers have stolen Ksh 6 Billion(¥6.7bn) from a Japanese digital currency exchange, as security problems continue to plague the industry. Tech Bureau, operator of the Zaif exchange, said it was hacked between 5pm and 7pm on September 14. Thieves made off with assets worth ¥6.7bn (Ksh 6 billion), of which ¥4.5bn(Ksh 4 billion) was customer money.

The attack suggests that digital currency exchanges are still vulnerable and have not learnt the lessons of a $500m hack on Coincheck, another Japanese exchange, earlier this year. It is a further blow to the reputation of Japan’s Financial Services Agency, which created a boom in cryptocurrency trading by authorizing dozens of exchanges, but has failed to ensure their security.

“We humbly apologize for betraying the trust of all our customers who have entrusted us with their precious assets,” said Tech Bureau in a statement.

Like Coincheck, Zaif is known as an aggressive exchange that offers trading in a wide range of cryptocurrencies and digital tokens. Zaif was one of seven exchanges sanctioned by the FSA earlier this year, making the subsequent hack even more embarrassing. According to the exchange, the hackers made off with 5,966 bitcoins — worth $38.1m at the current market price of $6,387 apiece — plus an unknown amount of bitcoin Cash and Monacoin.

The company said it detected an anomaly on September 17 and confirmed the hack the next day. It reported the incident to regulators and police. Zaif has suspended deposits and withdrawals while it improves security.

The funds were stolen from a so-called “hot wallet” that can be accessed through the internet. Cryptocurrency exchanges normally keep most of their assets in an offline “cold wallet”, which hackers cannot access.

Tech Bureau said it had reached a basic agreement to sell majority control of the exchange to Fisco, a company listed on the Jasdaq exchange, in return for a ¥5bn(Ksh 4.6 billion) capital injection.

If the deal is concluded, Zaif says it intends to use the funds to make good all customer losses. That mirrors the path taken by Coincheck, which was able to pay back customers using its own holdings of cryptocurrencies, before selling itself to the brokerage Monex.

What is your opinion on the topic?
Melissa Daniels
Article Tags:
· · · ·
Article Categories:
TECHNOLOGY