Zaif – a regulated Japanese crypto exchange – has been hacked and lost around $60 million in various cryptocurrencies. Hackers accessed a server that contained the exchanges hot wallet for deposits and withdrawals and managed to make off with a bounty of crypto loot. The hackers stole 5966 BTC, along with a currently unknown amount of MONA and Bitcoin Cash.
Fortunately for Zaif, Fisco Digital Asset Group (FDAG) has agreed to bail the exchange out and repay investors who had their funds stolen. In exchange for this service, FDAG demanded that a number of directors and corporate auditors must be axed, as well as becoming the majority shareholder of Tech Bureau – Zaif’s parent company.
Not Zaif’s First Slip Up
This isn’t the first time the Japanese crypto exchange has run into trouble. Earlier this year, there was a “glitch” in the trading system that allowed users of the platform to buy BTC for 0 yen. It is alleged that 16 customers managed to buy BTC for free, but the exchange cancelled these transactions. It was first made aware of the issue when one trader decided to buy $20 trillion worth of BTC. Had it not been for this greedy trader, the exchange may have taken much longer to notice the bug – making the trades much harder to reverse.
Security is Still the Call of the Day
On the exchange’s homepage, a large banner proudly displays a registration form accompanied by text that says “Stay Safe and Secure with Zaif’s Comprehensive Security.” After suffering a hack and a major glitch within seven months, it’s probably time to change the banner. Crypto exchange security has become a major issue in Japan, and earlier this year the Japan Financial Services Agency (JFSA) issued notices to several crypto exchanges about their lack of security. Japan has seen some of the biggest crypto exchange hacks to date, leading many to believe that the security standards of Japanese exchanges are severely lacking.
Regulation Still Booming
Despite the notorious lack of security in Japanese crypto exchanges, the demand for regulation in Japan is still booming. In fact, the demand is so high, the JFSA has had to hire more staff to cope with the influx of applications. Following this new hack, there is a good chance the JFSA will step up its regulatory process and requirements. If the country suffers from many more hacks of this magnitude, traders could become wary and stop using Japanese crypto exchanges.
Zaif is currently working on restoring its systems so traders can carry on as normal. While many traders could have been scared off after this hack, the fact that most will receive their funds back is definitely a positive sign for the exchange. Hopefully, under its new management, the exchange can resolve its issues and problems to provide traders with a flawless trading experience.