Japan hit by another cryptocurrency heist, $60 million stolen (updated)
20/09/2018 03:46
* Bitcoin, Monacoin, Bitcoin Cash were stolen
* To get Y5 bln from another company in exchange of majority
stake
(Adds details and background)
By Taiga Uranaka
TOKYO, Sept 20 (Reuters) - Japanese cryptocurrency firm Tech
Bureau Corp said about $60 million in digital currencies were
stolen from its exchange, highlighting the industry's
vulnerability despite recent efforts by authorities to make it
more secure.
Tech Bureau, which had already been slapped with two
business improvement orders by regulators this year, said its
Zaif exchange was hacked over a two-hour period on Sept. 14. It
detected server problems on Sept. 17, confirmed the hack the
following day, and notified authorities, the exchange said on
Thursday.
Following the hack, Tech Bureau said it had agreed with
JASDAQ-listed Fisco Ltd 3807.T to receive a 5 billion yen
($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 yen in
"financial assistance" may change in value if the amount
affected by the heist 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.
Japan's crypto exchanges have been under close regulatory
scrutiny after the theft of $530 million in digital coins at
Tokyo-based cryptocurrency exchange Coincheck Inc. in January.
Coincheck has since been acquired by Japanese online brokerage
Monex Group Inc 8698.T . urn:newsml:reuters.com:*:nL4N1PO1I1
In the industry-wide check that followed the Coincheck theft,
FSA said it found sloppy management at many exchanges, including
the lack of proper safeguards for client assets and basic
anti-money laundering measures.
In the Tech Bureau theft, virtual currencies worth about 6.7
billion yen ($59.67 million), including Bitcoin, Monacoin and
Bitcoin Cash, were stolen from the exchange's "hot wallet".
About 2.2 billion yen worth of the stolen currency was its own
while the remaining 4.5 billion yen belonged to customers, it
said.
Hot wallets are connected to the internet. Industry experts
consider them to be more vulnerable to hacks than "cold
wallets", which are not connected to the internet.
The latest hack is likely to affect the FSA's ongoing
regulatory review of the industry. Other countries are also
grappling with how to regulate crypto market.
urn:newsml:reuters.com:*:nL3N1W43O2 urn:newsml:reuters.com:*:nL3N1W61JN
Japan last year became the first country to regulate
cryptocurrency exchanges, as it encourages technological
innovation while ensuring consumer protection. Exchanges have to
register with FSA and required reporting and other
responsibilities.
FSA said last week more than 160 entities have expressed
interest in entering the cryptocurrency exchange business but
FSA has not issued any approval since December last year.
Toshihide Endo, FSA commissioner told Reuters in an
interview last month that the agency is trying to strike a
balance between safeguarding clients and technological
innovation.
"We have no intention to curb (the crypto industry)
excessively," he said. "We would like to see it grow under
appropriate regulation." urn:newsml:reuters.com:*:nL3N1VD3BY
($1 = 112.1400 yen)
(Additional reporting by Chang-Ran Kim and Takahiko Wada;
Editing by Shri Navaratnam and Sam Holmes)
((ran.kim@thomsonreuters.com; +81-3-6441-1804; Reuters
Messaging: ran.kim.reuters.com@reuters.net))