Japanese Bank Uses MONA Transactions to Find Zaif Hack ‘Source’

Reading Time: < 1 minute

Cryptocurrency hackers who stole $60 million worth of tokens from Japanese exchange Zaif may soon be getting a knock on the door after an investigation managed to track down the ‘source’ of the stolen funds. Zaif was hacked in September 2018, losing massive amounts of Bitcoin, Bitcoin Cash and Monacoin, but it was announced yesterday that a division of MUFG, Japan’s biggest bank, managed to follow the funds and potentially identify the perpetrators, representing a partial victory for crypto-friendly Japanese regulators.

FSA Embarrassment

Monacoin transfers were at the heart of the investigation, as MUFG subsidiary Japan Digital Design Co. (JDD), in conjunction with local cyber analysts, were able to zero in on the Monacoin transactions using cloud-hosted nodes, which also revealed source IP addresses and the destinations of the stolen funds. The results will please regulators as Zaif was registered with the Japanese regulatory authority, the Financial Services Authority, who were left embarrassed by the fact that the exchange was hacked after several performance warnings. Japanese authorities have been cracking down on cryptocurrency misdemeanors through 2018, so recovering the lost Zaif funds would bolster their argument that they can run a well-policed cryptocurrency market.

Refunds and a New Owner

Unlike with many exchange hacks the cryptocurrency world has seen, customers have already been informed that their lost money will be refunded, following a takeover of the troubled exchange. Ownership of the exchange will shift from Tech Bureau, who presumably are by now desperate to get rid of it, to Japanese investment firm Fisco, who will integrate it with their existing exchange and will refund Zaif customers from their own pocket. This won’t of course be the last cryptocurrency exchange hack, but it could be one with a happier ending than most.