Business

Ed Drake

Crypto theft cases in Japan ‘tripled’ in 2018 so far

The number of cryptocurrency theft cases in Japan has tripled in the first half of 2018, according to figures released by the country’s National Police Agency (NPA).

The reports come shortly after Japanese crypto exchange Zaif confirmed it has been hacked, with around $60 million stolen in the process, as the latest example of the surge in security breaches to impact the Japanese crypto space.

According to The Asahi Shimbun report, which quoted the NPA figures, the amount stolen this year was substantially larger than the equivalent figure recorded in 2017, with JPY60 billion stolen so far across 158 separate thefts. By contrast, the whole of 2017 saw just JPY600 million lost to thefts over 149 cases, reflected the rapid growth in the volume of criminal activity over the last few months.

In cases where cryptocurrency has been stolen from individual accounts, some 60% of cases involved users with logins similar to those used on other sites. The cryptocurrency most frequently targeted by thieves was XRP, with over JPY1.5 billion stolen across 42 separate incidents.

This was closely followed by BTC, which saw JPY860 million worth of thefts in 94 separate instances. Increasingly the cryptocurrency of choice for scammers, fraudsters and criminals, it is perhaps unsurprising that BTC was represented so prominently in the figures.

After the high profile Coincheck hack back in January, the Japanese Financial Services Agency (FSA) stepped up its efforts to regulate cryptocurrency exchanges in the country. Some analysts have now suggested in light of the Zaif attack that measures could be intensified still further, with the FSA currently reviewing its regulatory approach to tackle this upsurge in criminality.

This is brought into even sharper relief in the present case, with Zaif’s parent company already served with business improvement orders by the FSA in the past. It is likely they will take a dim view on the organisation’s approach to security following the recent theft.

As with the Coincheck theft, Zaif is reported to have held the affected cryptocurrency in hot wallets, with around two-thirds of the total belonging to clients, rather than the exchange itself. This has already resulted in criticism for Zaif and its parent company. The firm has confirmed Zaif is to be acquired by Fisco Ltd., for an amount in the region of JPY5 billion.

With the spike in crypto thefts in the last six months, it’s now over to regulators in Japan to raise security standards throughout the crypto sector.

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