Japan’s Crypto Trading Platform Zaif Gets Hacked Losing $60 Million, Promises Compensation

In yet another incident of cryptocurrency theft, Japan’s Zaif cryptocurrency exchange got hacked last week on September 14. In an official press release, the exchange confirmed that it has lost a total of $60 million or 6 billion Japanese Yen.

The Zaif crypto exchange is currently operated by Tech Bureau and holds an official license from the Japanese regulator. The exchange said that as soon as it noticed an unusual outflow of funds on September 14, it immediately suspended all the deposit and withdrawal services.

The local publication Nikkei reports that the hackers managed to breach the hot wallet of the exchange thereby stealing Bitcoin, Bitcoin Cash and MonaCoin tokens. A total of 5996 Bitcoin tokens are reported to have been stolen. However, the exchange hasn’t been able to determine the exact number of Bitcoin Cash and MonaCoin tokens lost.

“The reason for not being able to determine the damaged quantity at the moment is that the server is not restarted until the reliable safety can be confirmed in order to prevent secondary damage. As soon as the quantity of the lost virtual currency is determined, we will report it promptly,” Zaif said in a translated statement.

The exchange has taken a suo-motu action by reporting the local Japanese investigative authorities and regulators about this matter. A criminal case by Zaif has been registered and further investigation into the matter has already begun.

Out of the total $60 million hack, $40 million belonged to customers and remaining $20 million were stolen from the Zaif’s own asset reserve. The exchange, however, has also released a compensation structure for the same.

Tech Bureau, Zaif’s parent company said that it has entered an agreement with Fisco Digital Asset Group (FDAG) to recover its losses. The exchange will sell a majority of its shares to FDAG against which it will get a cash injection relief of 5 billion yen ($44.59 million). These funds shall be used to pay the victimized customers directly.

This is the second biggest hacking incident in Japan this year. This first one was Coincheck exchange which lost a whopping $500 million in NEM tokens, probably the biggest hack in the history of the cryptocurrency market.

Another local Japanese publication Asahi Shimbun reported on Thursday that the National Police Agency (NPA) released a report wherein it shows that the attacks on crypto wallets have tripled in the first six months of 2018, against the data during the same period last year.

As per the NPA report, nearly 158 cyber-breaches took place in first six months of 2018 wherein hackers stole $540 million worth of digital tokens.