Japanese Cryptocurrency Exchange Zaif Loses $60m in Latest Cyber-Attack
Another Japanese cryptocurrency exchange has fallen victim to hackers, with Zaif reporting losses of 6.7bn yen ($60m) earlier this month. The attack targeted virtual currencies including Bitcoin, Monacoin, and Bitcoin Cash, with 4.5bn yen ($40m) belonging to Zaif customers stolen from the exchange’s hot wallet.
Details of the Attack
The cyber-attack took place over a two-hour period on September 14, with server issues being detected three days later. The authorities were notified promptly, although Zaif is withholding specific details of the breach as investigations are ongoing.
Parent Company’s Troubles
Zaif’s parent company, Tech Bureau, has faced challenges this year, receiving two business improvement orders. To mitigate the impact of the attack, the company has entered into an agreement with investment group Fisco, securing 5bn yen in exchange for majority ownership to help replace the lost coins.
Industry-Wide Threat
This incident adds to a series of cyber-attacks on Japanese cryptocurrency firms, with Tokyo-based Coincheck famously losing $530m earlier this year. In response to the growing threat, the Financial Services Authority has introduced a new regulatory framework for crypto companies operating in Japan.
Challenges of Regulation
Despite regulatory efforts, cybersecurity expert Ilia Kolochenko warns that digital coins remain a lucrative target for cyber-criminals due to their ability to easily launder and convert them into cash. The anonymity of these transactions provides attackers with impunity, driving them to invest in breaching even well-maintained security measures.
Rising Fraud in the Cryptocurrency Space
Twitter banned cryptocurrency ads earlier this year to combat increasing fraud levels, with an Ernst & Young report revealing that 10% of all ICO funds have been stolen by hackers or fraudsters, amounting to nearly $400m in losses at the time of the research.
As the cryptocurrency landscape continues to face security challenges, the industry and regulators must work together to enhance protections and safeguard investor assets.