FSA Launches Investigation into $60 Million Zaif Hack

Responding to yesterday’s $60 million hack of cryptocurrency exchange Zaif, Japan’s Financial Services Agency (FSA) released a statement this Friday saying it is investigating security procedures at the exchange.

According to a report by Japanese outlet Mainichi Shimbun, the FSA has already started examining the user protection systems put in place by Tech Bureau – Zaif’s parent company.

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Astonishingly, Zaif has already been issued with two administrative warnings by the FSA. Having almost certainly failed to heed both of those warnings, Zaif is likely to be issued with another one.

Japanese authorities have been surprisingly lenient towards hacked cryptocurrency exchanges. Earlier this year, Coincheck, another Japanese cryptocurrency exchange, lost $530 million-worth of NEM tokens after hackers managed to gain access to its NEM wallet.

Instead of shutting the site down, the FSA allowed the exchange to continue its operations. Coincheck eventually paid back all of the stolen funds to consumers affected by the hack.

FSA to Finance Minister Aso

Whether Japanese regulators will be as lenient towards Zaif is unclear, particularly in light of the prior warnings the exchange has received from regulators. It may depend on whether or not Zaif is able to repay clients who lost money to yesterday’s hack.

Higher ups in the Japanese government have also commented on yesterday’s hack. A Nikkei report from this Friday indicates that Japan’s finance minister, Taro Aso, has commented on the case.

“It is regrettable that virtual currency of about 6.7 billion yen was stolen, via illegal access, from the virtual currency exchange company Tech Bureau.” Said Aso, “We will look at the facts and take the necessary responses for user protection.”

Along with much of the crypto-sphere, Japan’s exchanges have been plagued by attacks from hackers. On the same day as Zaif’s hack, Japanese police revealed that over $540 million had been stolen by hackers, via 158 separate attacks, in the first half of 2018.