Business

Dennis Wafula

Japan’s Zaif crypto exchange loses $60M in hack

Zaif, a cryptocurrency exchange based in Japan, has fallen victim to a hack, resulting in the loss of JPY6.7 billion ($60 million) worth of cryptocurrencies.

The exchange, which is owned and operated by Tech Bureau, started investigating after it noticed unusual withdrawal and deposit transactions on the platform last Sept. 14. Three days later, while trying to fix the problem, Zaif discovered that unknown persons had hacked their platform and stole 5,966 BTC, along with an unknown number of Bitcoin Cash and MonaCoin from their hot wallets.

Currently, Zaif has shut down its platform in order to fix the breach. They also hired a team of engineers to work on the issue and hope to resume operations soon. However, it is not clear when the platform will open its platform for transactions. The exchange has reported the matter to the Financial Services Agency (FSA) in Japan. Zaif has also filed a criminal case with the local authorities.

The exchange has issued an official announcement apologizing to its customers for the inconvenience as they work to solve the issue. According to Zaif, the company doesn’t have enough reserves to refund customers for the stolen cryptocurrencies.

“Our company’s unique assets are approximately 2.2 billion yen, and the virtual currency equivalent to customer’s assets is about 4.5 billion yen,” according to the roughly translated Zaif statement. “After discovering this case, we are striving to secure financial resources not to damage the customers’ assets.”

Currently, Zaif said it has asked Fisco Digital Asset Group Co. Ltd. for financial assistance. The JASDAQ-listed company has agreed to invest JPY5 billion ($44.5 million) in exchange for a major share of ownership in the crypto exchange.

Early this year, FSA had issued a warning to Zaif along with six other cryptocurrency exchanges in Japan asking them to beef up security on their platforms. Since the hack on Coincheck, FSA has been keen on making sure all cryptocurrency exchanges in the country have implemented stringent security meaures on their platforms.

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