Osaka-Based Crypto Exchange Hacked to Lose 6.7 B. Yen

September 20, 2018

Tokyo- Japanese virtual currency exchange Zaif has suffered a cyberattack, bleeding 6.7 billion yen's worth of bitcoin and other cryptocurrencies, of which 4.5 billion yen belonged to its customers, the exchange's operator announced Thursday.

The rest of the stolen money, worth 2.2 billion yen, was owned by the operator, Tech Bureau Corp., based in the western city of Osaka.

Also on Thursday, the company agreed with financial information provider Fisco Ltd., which owns a different cryptocurrency exchange operator, to consider the establishment of a capital tie-up.

Tech Bureau hopes to receive 5 billion yen from the Fisco side for refunds to affected customers. The Fisco group will study acquiring more than half of shares in Tech Bureau and a majority of its board.

Tech Bureau said its current management will resign to take responsibility for the loss of customer assets, after finishing the refunds and other necessary work.

The Financial Services Agency launched an on-site inspection of Tech Bureau on Thursday to investigate details of the digital currency theft.

According to Tech Bureau, the cyberattack to gain illegal access to the Zaif system occurred between around 5 p.m. and 7 p.m. last Friday (8 a.m. and 10 a.m. GMT), leading to the loss of assets in the three virtual currencies--bitcoin, bitcoin cash and monacoin.

Affected customer accounts were exposed to the Internet for deposit and withdrawal services.

The exchange operator confirmed the money loss on Tuesday after its system detected an abnormality on Monday. Its deposit, withdrawal and other services are currently suspended, with no prospect for restart.

Tech Bureau has reported the case to the FSA and investigative authorities.

Following the incident, the Japan Virtual Currency Exchange Association urged member operators to check systems at their exchanges.

In January this year, another Japanese cryptocurrency exchange, Coincheck, was hacked and robbed of 58 billion yen's worth of customer assets held in cryptocurrency NEM.

In the wake of the incident, the FSA issued a business improvement order to Coincheck twice.

The agency also conducted on-site inspections of other exchange operators and found a spate of flaws in their customer protection and other systems. Tech Bureau has since been slapped with two improvement orders. Jiji Press