Zaif crypto exchange completes transfer to buyer Fisco

Japanese cryptocurrency exchange Zaif has completed the handover of its business to Fisco Cryptocurrency Exchange, just a matter of weeks after the company was hacked resulting in losses in excess of $60 million.

The development means those still waiting to get money from the failed exchange will now be entitled to do so from the new owners Fisco Cryptocurrency Exchange, following their high profile bailout of the firm, according to a CoinTelegraph Japan report.

The handover was arranged in a bid to save Zaif after the firm was unable to compensate clients affected by the hack. As a result, many have been left out of pocket with little hope of recovering any of their lost funds until now.

Compensation proceedings are expected to begin this November, as the buyers look to address the losses suffered by those trading through the exchange at the time of the hack.

The completion of the sale and transfer of the Zaif business from parent company Tech Bureau concludes an embarrassing episode for the exchange, which was financially crippled in the wake of the hack.

For the time being, both deposits and withdrawals from the Zaif exchange remain in lockdown, with investors unable to get their hands on their money.

Following the transfer, Tech Bureau said it plans to dissolve the company and move away from its interests in the cryptocurrency sector. It declared, “We will abolish the registration of our virtual currency exchange and plan to dissolve.”

The hack was blamed on inadequate security at Zaif, as well as a lack of effective regulatory structures in Japan at the time. At the time of the hack, Zaif was the 37th largest cryptocurrency exchange in the world by volume.

Following the hack of the Zaif exchange, and the high profile hack of exchange Coincheck which saw some $534 million lost to hackers, Japanese regulators have taken significant steps to tighten the compliance burden on new and existing market players.

Nevertheless, these cases show the risks faced by cryptocurrency exchanges who fail to take adequate security measures to deter crypto scammers and hackers.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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Japanese cybersecurity experts track down Zaif exchange hackers

Cybersecurity experts in Japan claimed that they have found incriminating evidence against suspected hackers of Japanese cryptocurrency exchange, Zaif.

In an official statement released on Monday, Japan Digital Design Co. (JDD), a subsidiary of Mitsubishi UFJ Financial Group, announced that it has succeeded in identifying five transactions of the stolen funds from Zaif exchange. JDD has also shared the information with authorities in Japan.

Zaif exchange had its funds and those of its clients stolen by unknown suspects after their system was hacked in September. The hackers managed to steal JPY6.7 billion (about $60 million) of cryptocurrencies, including Bitcoin BCH, BTC and MonaCoin.

To track the missing cryptos, JDD said it held a hackathon with the help of TokyoWestern, a local cybersecurity team, and EL Plus, a security firm. JDD used an array of cloud-hosted MONA nodes to analyze transactions that involved the stolen currencies. Using this, along with other blockchain technologies, the team was able to determine several things such as the source IP address allowing them to trace the stolen currencies.

During their investigation, JDD discovered that one of the stolen currencies, MonaCoin, started being moved in late October, which made it easier for the team to track the hackers.

It is not yet clear as to the accuracy of the leaked information. Authorities are still doing their investigation to bring the involved parties to justice.

Following the hack, Zaif exchange was recently slapped with a business improvement order by the Financial Services Agency (FSA) in Japan. The regulatory agency stated that it regretted having allowed Zaif to continue operating. FSA claimed that they should have followed multiple warning given in the past about the exchange. In addition, FSA is seeking more information about the exchange and Tech Bureau, the operators of Zaif, including why there was a delay in reporting the hack.

Tech Bureau previously announced its intention to sell its entire stake in the exchange to Fisco Digital Asset Group to pay back customers who lost their funds. The terms of the deal are set to be completed on November 22.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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Embattled crypto exchange Zaif lays out plan for customer financial support

The embattled Japanese cryptocurrency exchange Zaif has published its plan for customer financial support, in the wake of a hack that cost the firm losses of up to JPY6.7 billion ($59.7 million). The attack resulted in Zaif’s parent company, Tech Bureau Inc., seeking external support to cover stolen customer assets.

With the details published on Wednesday, the firm has effectively announced its business will be transferred to Fisco Digital Asset Group, which is expected to conclude in November. In the documentation, Tech Bureau Inc. noted that the business transfer method was the best solution to the issue, factoring in the need to minimise risks and to protects its customers.

Tech Bureau reported that it had reached a basic agreement involving consideration last Sept. 20 to provide “financial support of JPY5 billion, enter a capital alliance enabling acquisition of a majority of the Company’s shares and allow for a majority of directors and the dispatch of an auditor.”

That deal, however, seeks “to pursue the business transfer method from the viewpoint of avoiding risk for those supporting and due to the requirement to implement a decision rapidly to protect customers.”

Monacoin holders caught up in the attack will be reimbursed in a 60/40 split of crypto to fiat, and at an agreed price of JPY144.548 per coin, or about $1.28. As of Wednesday, all Monacoin transactions on the platform have been halted, with an announcement on resuming trade expected at a later date.

All buying and selling in Bitcoin Cash (BCH), as well as BTC, remains unaffected, and will continue unimpeded. However, deposits and withdrawals have also now been frozen, to be resumed when the transfer of ownership to Fisco is complete.

The plan comes after Japan’s Financial Services Agency (FSA) issued another improvement notice to Zaif—the third notice of its kind demanding the exchange steps up its internal processes. The most recent notice, issued in September, follows on from similar notices from March and July of this year.

The plan shows the devastating impact of the theft on the exchange, and serves as a cautionary tale for other exchanges in the importance of robust security. It remains to be seen whether the deal will be enough to provide the support Zaif’s investors now so desperately need.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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Zaif exchange no longer accepting new customers

The parent company of Japanese cryptocurrency exchange Zaif, Tech Bureau, has announced that it is temporarily halting new accounts on the exchange. The decision follows the hack of the exchange last month, which saw it lose around $60 million worth of cryptocurrency. While stressed as only temporary, the new account suspension is certainly one that will set off a few alarms. The suspension only impacts any potential new customers – not those who already have accounts or who have already verified their identification.

Tech Bureau brass said that the company will pull the suspension once it decides on a compensation plan for its customers who lost holding during the hack. The reason is a little puzzling given that the company had allegedly already secured the funding necessary to repay its customers. That funding was announced at the same time the company announced the theft.

In an announcement by the firm, Tech Bureau said, “After concluding the basic agreement, we are advancing consultation and negotiations for concluding a formal contract, there is no change in the policy to ensure thorough compensation for customer assets, and we are continuing to consider the details of specific response…As soon as the content is confirmed, we will report it promptly.”

The exchange is being investigated by the Japanese Financial Services Agency (FSA), which has already issued it a business improvement order. Nonetheless, the FSA wants to take a closer look at the company’s user protection systems. Zaif has received three business improvement orders since it opened – two in this year alone.

Some of the stolen crypto has already been tracked, but getting it back is going to be virtually impossible. The funds were sent to offshore exchanges, the majority of which maintain wallets that do not have to adhere to any anti-money laundering or Know Your Customer regulations. This will make it difficult to determine who owns the wallets.

Two weeks after the hack occurred, Zaif finally realized what had happened. It immediately halted operations and announced the theft. It also said at the time that it had worked out a deal with Japan-based Fisco Digital Asset Group Co. ltd. that would see the latter receive a major share in the company in exchange for about $44.5 million, which Zaif said would be used to reimburse its customers, along with funds it held in reserve.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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Zaif hack victims still haven’t been paid

About three weeks ago, the Japanese cryptocurrency exchange Zaif was the target of hacker(s) who made off with around $60 million worth of cryptocurrency. Once the hack was uncovered by the exchange (which, incidentally, took two weeks to discover), the exchange’s parent company, Tech Bureau, suspended trading, apologized to its customers and said that restitution of deposits was forthcoming. Fast-forward to today and – even though it has allegedly already made arrangements to have the funds available – clients are still waiting for their money.

In order to compensate customers for their losses, Tech Bureau announced after the hack that it had made a deal to sell a large chunk of the company to Fisco Digital Asset Group for $44.5 million. That, coupled with its own savings, would give it the money needed to cover investors’ losses. However, it told regulators this week that it needed more time to finalize the repayment plan. It had previously said that it had expected to have the plan in place by the end of last month.

In making its announcement, Tech Bureau added that it is still trying to work out the terms of the Fisco deal. This is surprising since the two were able to quickly come to an understanding following the hack and they’ve now had three weeks to hash out the details.

Japan’s Financial Services Agency (FSA) stepped in to investigate following the hack and subsequently issued Tech Bureau a business improvement order. It was the third received by the company for the Zaif exchange this year and the third since the exchange began operations.

There have been two major hacks of Japanese exchanges this year, the Zaif heist and the Coincheck hack this past January. The scandals have put more pressure on regulators to intervene and crack down on crypto exchange operators to ensure they are protecting their customers adequately. Many are now calling for changes to how the companies manage user funds, with some pushing for the assets to be stored in cold wallets, a type of offline storage facility, instead of in hot wallets that are always connected to the Internet.

According to Kyoto University professor Kaoyuki Iwashita, “Exchange operators should overhaul their security, including hot wallets. We are well past the point of handling massive amounts of funds with the mindset of startups.”

Japan’s self-regulating body for the cryptocurrency industry, the Japan Virtual Currency Exchange Association (JVCEA), apparently agrees with Iwashita. It has introduced a guideline for the involved exchanges that would require them to store no more than 10% of all assets in hot wallets. However, it is only a guideline and cannot be enforced the same way as if it were law.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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Business Improvement Order given to Japan’s Zaif exchange over hack

Almost a week ago, Japan’s Zaif cryptocurrency exchange was the target of a hack that saw it lose $60 million worth of cryptocurrencies. It almost immediately agreed to make restitution to its users, but only after calling on Fisco Digital Asset Group for financial assistance. Now, the country’s Ministry of Finance (MoF), through the country’s Financial Services Agency (FSA), has slapped the exchange’s owner, Tech Bureau, with a business improvement order, a type of admonishment that carries serious penalties.

The MoF announced the order yesterday, explaining that the company will be obligated to find out everything about the hack, as well as to create measures to ensure that another hack won’t be possibly. Tech Bureau is also required to try and determine who was behind the attack.

In addition, the company must respond to customers in order to ascertain the individual level of damage that was done, and will also have to provide routine updates to the MoF on progress made of the hack investigation.

Tech Bureau has now received two business improvement orders in the past three months. The previous order, which was similar to one sent to five other exchanges, demanded better security on the platforms.

The hack saw the exchange lose Bitcoin BCH, Bitcoin Core (BTC) and Monacoin from its hot wallets. While many exchanges have switched to the more secure cold wallet, Zaif had not caught up with the larger exchanges.

Fisco agreed to provide the financial help, but it came with a price. The company will become Tech Bureau’s majority shareholder in exchange for $45 million.

The Zaif hack was the second major hack of a crypto exchange in the country this year. This past January, Coincheck lost $530 million to hackers, reportedly the largest crypto hack in history.

According to the Japanese National Police, crypt theft tripled in the first half of this year. However, enthusiasm has not diminished. There is still a growing number of adopters entering the space and the FSA has indicated that it anticipates over 160 applications from companies looking to start their own cryptocurrency exchanges. They’ll be up against some stiff competition, however, as large companies such as Line, Rakuten and Yahoo are already imbedded in the market.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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Japan’s Zaif crypto exchange loses $60M in hack

Zaif, a cryptocurrency exchange based in Japan, has fallen victim to a hack, resulting in the loss of JPY6.7 billion ($60 million) worth of cryptocurrencies.

The exchange, which is owned and operated by Tech Bureau, started investigating after it noticed unusual withdrawal and deposit transactions on the platform last Sept. 14. Three days later, while trying to fix the problem, Zaif discovered that unknown persons had hacked their platform and stole 5,966 BTC, along with an unknown number of Bitcoin Cash and MonaCoin from their hot wallets.

Currently, Zaif has shut down its platform in order to fix the breach. They also hired a team of engineers to work on the issue and hope to resume operations soon. However, it is not clear when the platform will open its platform for transactions. The exchange has reported the matter to the Financial Services Agency (FSA) in Japan. Zaif has also filed a criminal case with the local authorities.

The exchange has issued an official announcement apologizing to its customers for the inconvenience as they work to solve the issue. According to Zaif, the company doesn’t have enough reserves to refund customers for the stolen cryptocurrencies.

“Our company’s unique assets are approximately 2.2 billion yen, and the virtual currency equivalent to customer’s assets is about 4.5 billion yen,” according to the roughly translated Zaif statement. “After discovering this case, we are striving to secure financial resources not to damage the customers’ assets.”

Currently, Zaif said it has asked Fisco Digital Asset Group Co. Ltd. for financial assistance. The JASDAQ-listed company has agreed to invest JPY5 billion ($44.5 million) in exchange for a major share of ownership in the crypto exchange.

Early this year, FSA had issued a warning to Zaif along with six other cryptocurrency exchanges in Japan asking them to beef up security on their platforms. Since the hack on Coincheck, FSA has been keen on making sure all cryptocurrency exchanges in the country have implemented stringent security meaures on their platforms.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

The post Japan’s Zaif crypto exchange loses $60M in hack appeared first on Coingeek.

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Japan’s Zaif crypto exchange loses $60M in hack

Zaif, a cryptocurrency exchange based in Japan, has fallen victim to a hack, resulting in the loss of JPY6.7 billion ($60 million) worth of cryptocurrencies.

The exchange, which is owned and operated by Tech Bureau, started investigating after it noticed unusual withdrawal and deposit transactions on the platform last Sept. 14. Three days later, while trying to fix the problem, Zaif discovered that unknown persons had hacked their platform and stole 5,966 BTC, along with an unknown number of Bitcoin Cash and MonaCoin from their hot wallets.

Currently, Zaif has shut down its platform in order to fix the breach. They also hired a team of engineers to work on the issue and hope to resume operations soon. However, it is not clear when the platform will open its platform for transactions. The exchange has reported the matter to the Financial Services Agency (FSA) in Japan. Zaif has also filed a criminal case with the local authorities.

The exchange has issued an official announcement apologizing to its customers for the inconvenience as they work to solve the issue. According to Zaif, the company doesn’t have enough reserves to refund customers for the stolen cryptocurrencies.

“Our company’s unique assets are approximately 2.2 billion yen, and the virtual currency equivalent to customer’s assets is about 4.5 billion yen,” according to the roughly translated Zaif statement. “After discovering this case, we are striving to secure financial resources not to damage the customers’ assets.”

Currently, Zaif said it has asked Fisco Digital Asset Group Co. Ltd. for financial assistance. The JASDAQ-listed company has agreed to invest JPY5 billion ($44.5 million) in exchange for a major share of ownership in the crypto exchange.

Early this year, FSA had issued a warning to Zaif along with six other cryptocurrency exchanges in Japan asking them to beef up security on their platforms. Since the hack on Coincheck, FSA has been keen on making sure all cryptocurrency exchanges in the country have implemented stringent security meaures on their platforms.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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