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Taiwan firm to sue hacked parent Bitpoint Japan for overbilling

In this July 16, 2019 photo, Bitpoint Japan President Genki Oda apologizes at a press conference over a hacking incident, in Tokyo. (Kyodo)

TOKYO (Kyodo) -- A Taiwanese firm will file a 1 billion yen ($9.4 million) damages suit against Bitpoint Japan Co., saying it has been overbilled by the Tokyo-based parent embroiled in a recent hacking incident, its lawyer said Thursday.

According to a prepared lawsuit and other sources, Bitpoint Taiwan, which is in the cryptocurrency business using the parent's brand and trading system, discovered that total funds it has pooled from local customers have been short by some 500 million yen due to overbilling by the parent company.

Bitpoint Taiwan found the shortage of funds after reviewing past billings by the Japanese parent following the hacking incident in July, in which digital currencies worth 3.02 billion yen were stolen in Japan and an additional 250 million yen at overseas exchanges that use its trading system such as Bitpoint Taiwan.

Bitpoint Taiwan transmits funds collected from its local clients to Bitpoint Japan based on bills from the parent.

"It is clear that (Bitpoint Japan) had billed us based on erroneous numbers," Bitpoint Taiwan said in the prepared lawsuit.

The Taiwanese company will file the lawsuit with the Tokyo District Court and the total amount of damages will include a loss it suffered because of the hacking.

Bitpoint Taiwan's lawyer Hirotaro Kato said, "We're aiming to protect the funds of clients in Taiwan. It could develop into an international issue."

Bitpoint Japan said, "Representatives of (Bitpoint Japan and Bitpoint Taiwan) are in talks. We have not heard of a lawsuit."

Bitpoint Japan suspended all of its services and transactions after its so-called hot wallet system that is connected to the internet and stored five kinds of cryptocurrency -- bitcoin, bitcoin cash, ethereum, litecoin and ripple -- was attacked via unauthorized access. It resumed part of the operations from earlier this month.

The assets stolen from customers in Japan accounted for some 13 percent of the total digital money entrusted to Bitpoint and affected around 50,000 or half of the total clients.

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