The Japanese startup, Tech Bureau’s cryptocurrency exchange Zaif, is finally ready and announced to resume its operations seven months after it suffered from a critical hack in September, 2018.
The cryptoverse, despite endless possibilities it has to offer, comes with certain cons as everything else in this world. The dark side of the crypto world consists of scams and fraudulent schemes however, the major problem that continues to plague the crypto ecosystem are hacks.
In September of the last year, Japan based cryptocurrency exchange Zaif was the targeted and hacked, which resulted in the colossal losses. Known as one of the biggest exchanges in the country, Zaif helped pave way for cryptocurrency regulations in Japan and also became the first-ever licensed cryptocurrency exchange by the Japanese Financial Services Agency (JFSA).
The exchange was also used to be one of the most trusted bitcoin exchanges in the country, before the unfortunate took place which resulted losses of bitcoin (BTC), Bitcoin Cash (BCH) and Monacoin (MONA), estimated at about $59.67 million at that time.
Tech Bureau said in a statement that its exchange had been hacked into over a two-hour period on September 14, 2018. It detected server problems on September 17, 2018, confirmed the hack the following day, and notified authorities.
Following the hack, Zaif announced an official plan to provide financial support for its affected customers, for which it worked with Fisco Digital Asset Group, a financial group that provides investment support services. Fisco agreed to provide financial support of 5 billion Yen and entered a capital alliance that enabled the acquisition of majority of the company’s shares.
However, on October 10, 2018, Tech Bureau revealed that the both the firms had reached an agreement whereby the business of the cryptocurrency exchange was transferred to Fisco Cryptocurrency Exchange (FCCE). Under the final terms, Fisco reportedly assumed customers’ rights to receiving a return of all deposited cryptocurrency.
The official handover was completed later in November 2018 as FCCE assumed the responsibility of for compensating users who lost money in the hack. Reportedly the users will be repaid 40% in fiat currency and 60% in crypto. The rate of compensation will be 144.548 yen ($1.28) per MONA which will become available for withdrawal on April 23, when the exchange officially resumes operations. Meanwhile, upon confirmation of the handover, Tech Bureau said it planned to dissolve its entity and retire from the cryptocurrency industry.
Unfortunately, Japan is no stranger to hacks. According to reports, hackers were successful in swiping over $540 million (60 billion Yen) worth of cryptocurrency from Japanese netizens over the first 6 months of 2018. Moreover, Japan’s National Police Agency revealed the number of cryptocurrency-related reported incidents rose to 158, which is three times the amount of incidents over the same period in 2017.
Furthermore in 2018, over 7,000 cases of suspected money laundering tied to crypto were reported to Japanese police and more than 7,000 transactions were suspicious as they raised many red flags — such as being linked to user accounts held under different names and birth dates, but with an identical ID photo.
In January last year, the Tokyo-based cryptocurrency exchange Coincheck, suffered what appeared to be one of the biggest hacks in crypto history. The exchange’s president Wakata Koichi Yoshihiro and chief operating officer Yusuke Otsuka, estimated its loss at 58 billion Yen (approx. $533 million). Moreover according to reports, 500 million NEM tokens were taken from Coincheck’s digital wallets.
Monappy, the digital wallet that can be installed on smartphone, too was the target of a hack last year. Reportedly an 18-year-old hacker, hacked Monappy and stole 15 million yen ($134,196) of cryptocurrency between August 14 and September 1, 2018, affecting more than 7,700 users.
The menace of hacks isn’t just restricted to the crypto space in Japan, on the contrary it is prevalent everywhere. Earlier in March 2019, the Singaporean crypto exchange DragonEx fell prey to the horrors of hacking. Per the platform’s announcement, cyber attack led to the crypto asset of customers of the exchange being reported either stolen or transferred to unknown accounts.
The New Zealand-based cryptocurrency exchange, Cryptopia fell prey to a crypto hack this year in January. According to reports, as much as $16 million worth of Ethereum (ETH) and ERC20 tokens were stolen from the platform. The reports also revealed that the hacker managed to get away with 1,675 ETH from 17,000 Cryptopia wallets.
Despite the fact that platforms do their best to bounce back from such incidents, security breaches nonetheless scar their reputation. However, it seems that it will take some time until crypto world rids itself from the menace of hacking.
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