Tech Bureau Corp, parent company to Japanese exchange Zaif reports $60 million in cryptocurrency stolen from hacked wallets. This week’s headlines have already centered extensively on the vulnerabilities investors face when using unregulated crypto exchanges. First, the NY Attorney General, Babara Underwood’s office released a detailed report cracking down on 13 of the top exchanges for price manipulation. The U.K. treasury committee piled on, drawing more attention to the issue, calling the crypto market the “Wild West” in a new statement.
The Zaif hack took place on September 14th over the course of two hours. The hack was confirmed on September 18th as problems with the server were identified and the investigation began.
The digital assets including bitcoin, monacoin, and bitcoin cash were stolen directly from the exchange’s online wallet, which works towards disseminating the crypto community’s already diminishing trust during this seemingly endless bear market. The hackers stole an additional nearly $20 million from the parent company Tech Bureau in addition to the $60 million stolen from the hot wallet.
The exchange is working out a way to reimburse their customers, having already secured a loan from Fisco Digital Asset Group. Tech Bureau will also have to sell a majority stake of the company to their lender and the managers in charge at the time of the hack are scheduled to resign.
Japan’s Financial Services Agency (FSA) has served two business improvement orders already this year to the Tech Bureau Corp. It would be no surprise that a third issue may be on the way.
For now, Zaif has suspended the exchange’s services but has announced they will be back online once they have guaranteed network security. This hack is not the only Japanese-based multi-million dollar exchange scandal to occur this year. Coincheck, now acquired by Monex, fell victim to an even bigger $530 million NEM raid back in January.
The pressure is on the Japanese FSA now to regulate these exchanges and implement security measures to protect investors. Since April 2017 Japan has required crypto exchanges to have a license. However, Tech Bureau who was founded long before this new compliance law was unlicensed at the time of the hack. Both Coin Check’s and now Tech Bureau’s hacks will influence exchange regulation in Japan and the FSA is likely to pull in the reigns as a reaction to this incident.