Finance

Zaif Crypto Exchange Hacked for 5966 BTC

Security Breaches Continue to Plague Cryptocurrency Market

After our yesterday’s article about the Newdex decentralized exchange attack, we bring yet another report of the malicious action undertaken by the hackers.

Zaif’s Users Robbed of $60 Million

This time, the platform which suffered the attack was the Japanese centralized cryptocurrency exchange, operated by Tech Bureau company, Zaif.

According to the report from the local media, hackers ran off with 5966 Bitcoins (BTC), worth approximately $38,5 million along with the still unconfirmed amount of Bitcoin Cash (BCH) and MonaCoin (MONA).

It is believed that the overall value of coins stolen during the attack climbs up to $60 million.

Hackers Breached Exchange’s Hot Wallets

Tech Bureau’s internal investigation showed that hackers were able to take the money directly from the exchange’s hot wallets used to store their client’s funds, through the unauthorized access.

The exchange immediately suspended all deposits and withdrawals to prevent further attacks.

Tech Bureau Didn’t Have Enough Funds to Cover the Losses

Tech Bureau reported that, at the time of the attack, they had only  2.2 billion Japanese yen ($20 million) so they couldn’t cover the losses caused by the hackers’ attack.

Therefore, the company reached an agreement with the company called Fisco to monetize the share of the ownership in exchange for $44.5 million investment to provide the cover for the damage done by hackers.

Vulnerable Japanese Centralized Exchanges

Even though the Japanese financial watchdog issues special permittees for the exchanges which want to conduct business in Japan, the high level of scrutiny failed to bring results, as this wasn’t the first such malicious attack on the Japanese exchanges in 2018.

In January, Coincheck also reported the attack which deprived their clients of the stunning $520 million in NEM tokens.

After the incident, the Japanese Financial Services Agency (FSA) launched a series of thorough inspections with the aim of forcing cryptocurrency exchanges to implement better security measures.

As we can see, the government’s initiative failed.

Tech Bureau Was Already Warned

In March 2018, Tech Bureau was given a business-improvement order by the Japanese FSA, as a warning to enhance their security and anti-money laundering system.

According to the recent reports, we are still a long way from being safe while trading cryptocurrencies. The fact that Japanese FSA was aware of the Zaif’s shortcomings makes the investors wonder if even the regulating bodies can improve their safety while trading on cryptocurrency exchanges.

Luka Kapetanic

An ex-restaurant business owner turned cryptocurrency fanatic, with over 12,000 followers on investfeed.com. Miner, Investor, trader and, above everything else - a writer, with coinlive.io, and cryptodigest.com in his jobs portfolio.

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