Why Bitcoin, Bitcoin Cash & Crypto Market has been Crashing

Japan might be leading the race to become a global giant in cryptocurrencies, but it also is gaining news for all the wrong reasons as well. Japanese exchanges have been found vulnerable to hacks and security glitches pretty often and things don’t seem to be improving. In a recent hack, Japanese cryptocurrency firm Tech Bureau Corp said it said its Zaif Exchange was compromised to hackers and has nearly lost US$60 million worth of crypto assets.

Hack despite business improvement orders by regulators
In hacks, exchanges and companies are usually surprised by the attacks as they themselves are not aware of the vulnerabilities. But in case of this hack, it looks more of a negligence then unawareness. Tech Bureau the company that runs Zaif exchange was already slapped with two business improvement orders by the Japanese regulators this year.

In its statement, the company said its Zaif exchange was hacked over a two-hour period on Sep 14. It detected server problems on Sep 17, confirmed the hack the following day, and notified authorities, the exchange said on Thursday.

In this theft, virtual currencies worth about ¥6.7 billion, including Bitcoin, Monacoin and Bitcoin Cash, were stolen from the exchange’s “hot wallet”. About ¥2.2 billion worth of the stolen currency was its own while the remaining ¥4.5 billion belonged to customers, it said.

Following the hack, Tech Bureau said it had agreed with JASDAQ-listed Fisco Ltd to receive a ¥5 billion (US$44.59 million) investment in exchange for majority ownership. The proceeds from the investment would be used to replace the digital currencies stolen from client accounts. However, Fisco said in a statement the ¥5 billion in “financial assistance” may change in value if the amount affected by the theft changes upon further investigation.

Documents seen by Reuters on Thursday showed Japan’s Financial Services Agency would conduct emergency checks on cryptocurrency exchange operators’ management of customer assets, following the theft. FSA officials were not immediately available for comment.

Loss: caused by hacking damage The type and quantity of the virtual currency that we lost due to hacking damage are as follows.

  • BTC 5966
  • MONA Currently being investigated
  • BCH It

is estimated that the total loss due to damage more than the current investigation is equivalent to approximately 6.7 billion JPY (including MONA and BCH) in Japanese yen. 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. As soon as the quantity of the lost virtual currency is determined, we will report it promptly.

Impact on customer’s assets due to hacking damage:

Among the virtual currencies equivalent to about 6.7 billion yen lost, our company’s unique assets are approximately 2.2 billion yen, and the virtual currency equivalent to customer’s assets is about 4.5 billion It becomes yen.
After discovering this case, we are striving to secure financial resources not to damage the customer’s assets, and we will explain the situation in the following “3. Response of our company”.

 

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