Japanese Cryptocurrency Hacked, $60 Million Losses Reported

Japanese cryptocurrency exchange, Zaif has been hacked and the loss is recorded are worth $60 million cryptocurrencies. According to a press release sent out by Tech Bureau Corp, the parent company of Zaif on 20th September, the deposits and withdrawals are suspended on the exchange, until further notice.

The press release also reveals that the hack was discovered after an investigation was conducted following a confusion in deposits and withdrawals on 14th September. The investigation further showed that the exchange was hacked for two hours on the said date.
Zaif’s Twitter posts show further criticism from users, who complain about poor backend performance and lack of clarity.
Teach Bureau notified the Financial Services Agency (FSA) for investigation on the matter. FSA would also carry emergency checks on other cryptocurrency exchanges following Zaif’s hack.

“[Translated] As a result of our survey, it turned out that some of the deposits/withdrawal hot wallets were hacked by unauthorized access from the outside and part of the virtual currency managed by us was illegally discharged to the outside,” the press release stated.
The stolen cryptocurrency also included Bitcoin (BTC), Monacoin (MONA), and Bitcoin cash (BCH), these currencies were stolen from the exchange’s hot wallet (A hot wallet is an online wallet and connected in some way to the Internet). Out of the $60 million, $19 million worth (approximate) of stolen currency was held by the exchange and different $40 million belonged to the users on the exchange.

Zaif’s assets reserve is currently about $20 million which doesn’t cover for the losses. Tech Bureau stated in the same press release that it has entered into an agreement with Fisco Ltd, cryptocurrency exchange, to receive $44 million and in replacement Fisco will hold the majority share of ownership.
Zaif has also recorded into an agreement with JASDAQ (Securities Exchange) listed, CAICA Corporation, a technology company, who can provide the adequate technology to improve Zaif’s security in the future.

Zaif exchange ranks as the 101 biggest cryptocurrency exchange in terms of its trade volume, according to CoinMarketCap.
This is not the first time that Zaif has suffered technical problems that have resulted in a theft.
In February 2018 Zaif declared a “system glitch” that made it possible for the users to purchase trillions of dollars’ worth of BTC for “free”. One out of the sever buyer that managed to make a trade, made an attempt to sell $20 trillion in Bitcoin before the problem was resolved, but the exchange managed to cancel all illicitly-gained transactions later.

Tech Bureau was issued with business improvement orders from the FSA, following Coincheck’s $530 million hack in January 2018. The inquiries conducted at the time by FSA on many other exchanges exposed sloppy management, lack of proper safeguards, and basic anti-money laundering measures.