One of the biggest challenges that the crypto market has to face today is security. Over the years, a good number of crypto exchanges have already been hacked. From Mt. Gox to Coincheck, millions of dollars were lost because of these incidences. In fact, Japan’s FSA has decided to impose stricter rules in order to prevent these things from happening. One of the changes that Japan’s regulators imposed is that the wallets should be offline.
However, another Japanese crypto exchange has been robbed recently. Zaif has lost $60 million worth of cryptocurrencies as announced by its parent company, Tech Bureau. The hacking incident occurred on September 14. It happened in just a 2 hour time frame. By September 18, it was confirmed that there was, in fact, a hacking incident that occurred. Among the cryptocurrencies that were stolen from the exchange included Bitcoin, Monacoin, and Bitcoin Cash.
How Did It Happen?
So how exactly did it happen? Hackers were able to gain access to the wallet used by the cryptocurrency exchange since it is still connected through the internet. Of the $59.67 million that was stolen from the exchange, almost $20 million is from Tech Bureau. On the other hand, the remaining $40 million are client funds.
As a reaction, Tech Bureau was forced to take the crypto exchange offline. Efforts are being done by the company in order to restore operations.
Past Hacking Incidences
There were already a number of hacking incidences in the past from crypto exchanges from Japan. In fact, the Coincheck hacking incident was the worst at $547 million-worth of digital currencies were stolen earlier this year.
Coincheck didn’t have a license when it was hacked. It has been attempting to get licensed since 2012. And because of this, it has sparked debate how regulators can protect investors. On the other hand, Zaif is a totally different story. It is registered by the government last year.
After the hacking incident, it announced that it had accepted a $45 million offer of investment from a company from Tokyo named Fisco.
Impact on Regulations
This incident could have an impact how Japan’s FSA is going to work on crypto exchanges. The agency is quite familiar with high profile cases over the years and it is still struggling to impose a regulation that will be applied to the crypto exchange businesses that can protect investors from these hacking incidences.
Kraken even decided to leave Japan and settle elsewhere since they found the proposed changes to be costly.
Japan is still reviewing crypto exchanges at this point. Despite the changes that it has applied in its regulations, it is possible that Japan’s FSA still hasn’t covered all bases. However, this incident could potentially change the way regulators are approaching the situation.
Hacking can always be considered bad news especially for crypto exchanges at this point. For instance, it proves that the industry is prone to these types of problems. You also have the report by the New York State Attorney General’s office saying that cryptocurrency exchanges are manipulating the market. Will this affect the price of cryptocurrencies?