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Japanese Regulator Issues Third Warning to Zaif

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Zaif,exchange,cryptocurrency

A top Japanese financial regulator issued a third warning to the hacked crypto exchange Zaif.

The exchange recently revised its theft estimate and said that it discovered a theft of 42,327 BCH in addition to 5,966 BTC.

In addition, Zaif signed agreements with two companies seeking their help with repaying customers and improving the quality of its security system.

Third Business Improvement Order Issued to Zaif

The Japanese Financial Services Agency (FSA) issued a third business improvement order to the company, Tech Bureau Inc. on September 25.

Tech Bureau is the company that operates the crypto exchange Zaif. Hackers stole the cryptos on September 14 and the company detected the breach on September 17.

Zaif is one among 16 regulated crypto exchanges in Japan.

The FSA gave the firm time until September 27 to submit written reports to explain the situation.

Areas of Concern

The reports from Zaif must address three key areas. The first will entail the “Determination of the facts and causes of the leakage.” The exchange should also look at “ [the] formulation and execution of measures to prevent recurrence, ” the agency said.

Furthermore, the second area of concern considers the “Prevention of customer damage increasing.”

The third pertains to the firm’s “Response to customer damage,” including how the exchange plans to compensate its customers.

The order requests the exchange to “review and implement concrete and effective improvement plans” pertaining to security breaches.

The regulator issued the first order on March 8 and the second on June 22.

Earlier Warnings

The regulator outlined the exchange’s security problems in the March business improvement order.

The agency’s on-site inspection of the exchange revealed system failures and numerous cases of unauthorized withdrawals.

The regulator said that the management of the Zaif failed to take “appropriate measures to prevent reoccurrence.”

It did not provide its customers with the requisite disclosure.

Revision of Theft Estimate

Earlier, the exchange confirmed that hackers stole 5,966 BTC.

Zaif now states that, in addition, 42,327 BCH and 6,236,810 MONA were also stolen.

Furthermore, the stolen cryptocurrency that belongs to customers now totals 2,723.4 BTC, 40,360 BCH, and 5,911,859 MONA.

Additionally, according to Zaif the hackers stole approximately 7 billion yen (~$62 million) of which 4.5 billion yen (~40 million) belonged to customers.

Customer Compensation

Tech Bureau signed a capital alliance agreement with Fisco Digital Asset Group Co. Ltd. to assist in repaying its customers in exchange for shares in Zaif.

 

 

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