$60 Billion Worth of Cryptocurrency Stolen in the Zaif Cyberheist

Japanese cryptocurrency exchange, Zaif is hacked to the tune of 6.7 billion yen or $60 million dollars worth of crypto coins by cybercriminals. The heist incident happened between 5 pm to 7 pm on September 14, 2018, the two-hour window was enough time to establish transfers. Zaif was only able to detect the infiltration after three days; the attackers were able to take possession of Monacoins, Bitcoin and Bitcoin Cash from the exchange’s hot wallet.

Zaif declined to provide detailed public information of the heist, and they are in full cooperation of authorities in order to further investigate the incident.“We decline to comment on the details of how this illegal access occurred, as it is a crime and we’ve already asked the authorities to investigate,” said Zaif’s representative. Later, they have published an official press release providing some details of the incident. “Since our company detected server malfunction on September 17, 2018, and hacked damage was confirmed on the following 18th, we reported to the Treasury Department, We have done damages declaration etc. to the investigation authorities. Currently, we are checking and strengthening security, rebuilding the server, etc., in order to restart the system of depositing/withdrawing virtual currency. We are committed to restoration as soon as possible, so please wait for a while. Moreover, I sincerely apologize for any inconveniences that may arise.”

Zaif has not disclosed how much Monacoins and Bitcoin Cash were stolen, but from the initial reports, 5,955 BTC was lost, equivalent to $37.8 million. Many financial leaders today are interested in cryptocurrencies, but they still very careful with direct investment with them due to the frequent news of a cryptocurrency exchange getting hacked by outsiders.

Just like the US Dollar, the Japanese Yen has a large share (around 12%) of the global Bitcoin-to-real currency transactions. Prior to the heist, Zaif was the 35th largest cryptocurrency exchange in the world based-on turnover rates as per coinmarketcap.com.

Tech Bureau Corp, the mother company of Zaif has promised victims a compensation for the lost crypto coins, amid the growing concern and pressure from Financial Services Agency of Japan. The latter has ordered the former to conduct a more thorough investigation of Zaif, including the very system they used to operate the cryptocurrency exchange. Tech Bureau, with a budget of around five billion Yen, has partnered with Fisco Ltd, in order to take over the majority share of Zaif after the incident, as part of the audit process.

“Today (September 20, 2018), we provide financial assistance providing 5 billion yen to our company through a subsidiary of Fisco Digital Asset Group Co., Ltd., a group company of Fiscal Co, a JASDAQ listed company , We have concluded a basic agreement to consider the capital alliance to acquire majority of our stocks, the dispatch of more than half of the directors and corporate auditors,” a Tech Bureau representative said.

As of this writing, the Zaif exchange is still closed, users are unable to transact deposits and withdrawals.

This is not the first time that a Japanese cryptocurrency exchange has been hacked this year, earlier in the first half of 2018, Coincheck was a victim to a NEM tokens theft to the tune of $500 million. Very similar to the cause of the Zaif case, Coincheck was using an unsecured hot wallet.