Please view the main text area of the page by skipping the main menu.

6.7 bil yen in digital currencies stolen from Japanese exchange

This Sept. 20, 2018 photo shows the building housing cryptocurrency exchange operator Tech Bureau Corp. in Osaka Prefecture. (Kyodo)

TOKYO (Kyodo) -- The operator of Japanese cryptocurrency exchange Zaif said Thursday it had lost 6.7 billion yen ($60 million) in digital funds in a hacker attack.

This photo taken in January 2018 shows a smartphone displaying an app of a virtual currency exchange. (Kyodo)

Osaka-based Tech Bureau Corp. has suspended deposits and withdrawals after the cache of bitcoin, monacoin and bitcoin cash were stolen last week. Of the total, 4.5 billion yen belonged to users and the rest to the exchange.

Tech Bureau said it intends to compensate its users in full. It has asked for 5 billion yen in assistance from a subsidiary of Fisco Ltd. and will become an affiliate of the financial services group.

The incident occurred even as the government has strengthened oversight of the industry after 58 billion yen worth of the cryptocurrency NEM was stolen in January from Japanese exchange Coincheck Inc.

The Financial Services Agency has launched an investigation into whether Tech Bureau had the proper security measures in place to guard against the attack.

The financial watchdog has already issued two administrative warnings to the company over lax management earlier this year and is now mulling a third, according to government sources. It also surveyed all other exchanges in the country for similar breaches.

The Zaif platform was hacked over a period of about two hours until around 7 p.m. last Friday. Tech Bureau detected an abnormality in the system on Monday and learned the following day the cryptocurrencies had been stolen, it said.

The cryptocurrencies had been kept in a "hot wallet" that was connected to the internet.

The latest breach is sure to spark renewed debate over the safety of using such platforms.

The number of such breaches during the first six months of the year increased threefold from a year earlier to 158, according to the National Police Agency.

The total amount stolen soared from 115 million yen to 60.53 billion yen during the same period, largely due to the Coincheck incident.

Following the latest theft, the Japan Virtual Currency Exchange Association, an industry body, called on member companies to carry out an emergency review of their operations.

Also in The Mainichi

The Mainichi on social media

Trending