Japanese cryptocurrency exchange Zaif announced yesterday that approximately $60 million in cryptocurrencies had been stolen from its platform in an apparent hack. The breach, which took place on September 14, was not discovered until four days after the fact.
6000 Bitcoin Stolen – and Nobody Noticed?
For a cryptocurrency exchange, the only thing worse than being hacked is having to admit that it took four days for anyone to notice. This is the situation that Osaka-based Zaif cryptocurrency exchange found itself in yesterday.
In a press release published on PR Times, Tech Bureau, the company that operates Zaif, announced that the exchange had been hacked, resulting in the theft of roughly $60 million worth of cryptocurrencies, including 5966 bitcoins and unspecified amounts of Bitcoin Cash and MonaCoin.
Our company detected [a] server abnormality on September 17, 1900 and hacking damage was confirmed on the following 18th, we reported to the Treasury Department, analyzed the cause, investigated We have done damages declaration etc. to the authorities.
The real kicker, however, is that while they may have discovered the breach on Monday, the actual hack occurred four days earlier, on the previous Friday, leaving the crypto community flabbergasted and wondering how a hack – especially one of that magnitude – could go unnoticed for four days.
It took them 4 days to notice the hack. The fact that they do not know the missing amount of #BCH and #MONA is another sign of their complete operational incompetence. Is Mark Karpeles @MagicalTux running this place?
— Kay Kurokawa (@kaykurokawa) September 19, 2018
Investigations, Reimbursements, and Repercussions
Earlier today, the FSA – Japan’s financial watchdog – launched an investigation to determine whether or not Tech Bureau had proper security measures in place. This is not the first time that Tech Bureau and Zaif have been in the FSA’s crosshairs. The company has already received two administrative warnings from the agency for “lax management” this year and it looks likely that they are about to receive a third.
Although slow to detect the breach, Tech Bureau was quick to report the incident both to local authorities and to the Financial Services Agency (FSA). Another point in the exchange’s favor is that efforts are already underway to reimburse customers’ stolen funds. In addition to its own reserves, which total roughly $20 million, Tech Bureau has reached an agreement to sell a majority stake to Tokyo-based Fisco Ltd. in exchange for a $44.5 million investment that will also be earmarked for reimbursing customers.
According to Japan Times, Fisco plans to install directors and an auditor at Tech Bureau to help strengthen internal management. The company’s current managers will be resigning in the wake of the incident.
Zaif is the second Japanese cryptocurrency exchange to be hacked this year. Back in January, CoinCheck was also hacked, resulting in the theft of more than 530 million NEM, making it one of the largest exchange hacks of all time.
What are your thoughts on Zaif being hacked? Why didn’t it have more of an impact on the market? Let us know in the comments below.
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