Bitpoint to repay users following attack

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In a move that was widely expected already, Bitpoint announced on July 17 that they would be reimbursing users who lost their funds from a recent hacker attack, The Mainichi reported. The total amount lost by the company was reported at $28 million, with 55,000 users affected.

The attack was initially reported on July 12, and it was estimated that $32 million was lost. Of that amount, $23 million or was lost from customers accounts specifically, according to initial reports. Days later, it was discovered that an additional $2.3 million was found missing from trading accounts outside of Japan.

Now the company is revealing that the total amount lost was less than expected, as the total amount appears to be about $28 million. Half of their 110,000 users were affected by the hack with $19 million being lost. The remainder consisted of holdings by Bitpoint.

In a statement by the company, Bitpoint president Genki Oda noted that the loss represented about 13% of the total cryptocurrency assets owned by customers.

Despite the significant size of the hack, Oda also confirmed that the company will completely reimburse customers for the losses incurred by the hack. While this was the right public relations move, it would’ve been likely that the company would have been forced to reimburse customers anyway.

In January 2018, Coincheck was hacked for nearly $540 million. Eight months later, Zaif had $60 million stolen from user accounts via a hack. In both cases, Japan’s financial regulators required the exchanges to reimburse customers for the money that was lost. It was widely expected that they would’ve required Bitpoint to reimburse customers as well.

However, executives at Bitpoint were smart. Instead of a public statement being released by the regulatory agency demanding that they reimburse their users for the loss, now they look like the company that took the extraordinary step themselves. That was a very smart move on their part.

One piece of information that was missing from the briefing was when the exchange would resume operations. Following the disclosure of the hack, Bitpoint stopped all transactions to prevent any further loss. This has been in effect since the day of the hack, and no date to resume trading has been released. That means customer accounts will remain frozen until further notice.