Known for their massive losses of cryptocurrency, Japan has now nearly scuttled the world of virtual finance by injecting 20 trillion dollars’ worth of Bitcoin into the financial system.
Only one month after the mysterious crash of the Japanese exchange, Coincheck, which saw losses estimated around half a billion dollars’ worth of cryptocurrency, Nem, another Japanese exchange, has also become a victim of cybercrime.
The Bermuda Triangle of Cryptocurrency
According to Reuters, Zaif is another exchange, belonging to an Osaka-based company known as Tech Bureau Corp, and is one of only 16 government-sanctioned exchanges operating within the country. Moreover, the news agency has reported that the company was visited by regulators the day after the cyber-attacks on Coincheck took place last month.
Contrary to Coincheck’s situation, Zaif’s problem came from within its own system, which somehow allowed its clients to authorize and sell Bitcoin without even having any in their possession.
It was the company itself that announced the problem on January 20th, 2018, which came 4 days after the events that took place on January 16th.
Tech Bureau Corp has assured the public that they have canceled all transactions and have settled the accounts of the 7 clients who were able to profit from the system’s fault. However, Reuters has reported that only 6 of the accounts have been settled and that negotiations are still underway with the seventh client.
A local Japanese newspaper, Asahi Shimbun, reported that it was the 7th client’s greed that managed to arouse suspicion about its activates after authorizing the sale of 20 trillion dollars’ worth of Bitcoin and then trying to transfer their funds. These initiatives were doomed to failure since the value of the transactions exceeded Japan’s GDP by nearly 4 times and the entirety of Bitcoins in circulation is limited to a value of $178 billion.
It seems that Zaif has made a change to their system at 7:30 pm and that the 7th account holder had about 20 minutes, between 7:40 pm and 7:58 pm to execute their heist. Whether this happened by coincidence or not, it has caused the price of cryptocurrency to crash, just as Bitcoin was preparing to breach the $12,000 mark once again.
Casting the Spell
The daily news release from, Nikkei Business, of the Tokyo Stock Exchange, has recently announced the creation of two regulatory entities by Japanese exchange sites. One of the regulators will concern itself with structures that are registered with the state, while the other will regulate those who are not registered. Both authorities will have the difficult task of defining security policies for all exchanges that will allow them to protect themselves against the risk of cyber-attacks, which seem to be happening more and more frequently.
