Topic: [2018-09-20] Crypto Exchange Zaif Hacked In $60 Million, 6,000 Bitcoin Theft (Read 203 times)

Zaif, which lost $60 million worth of cryptocurrency in a September hack, has outlined its plans for reimbursing its customers.

https://coincodex.com/article/2478/zaif-details-refund-plan-for-customers-after-september-hack/

This story can be viewed from another angle, maybe this is a hack - but only with intention to taking over this exchange. First you have exchange which is have 60$ million worth of crypto in hot wallets and only 20$ million in cold wallets, and then shortly after hack they find new owner who get major share of ownership for 44.5$ million. All of this is somewhat suspicious and it will be interesting to see if the investigation is going to give some results how hack actually happened.

It is strange that such things happens in Japan who allegedly invested great efforts in supervision and regulation of crypto exchanges. It seems like a ghost of Mt.Gox is still hovering over Japanese crypto exchanges.

I think the reserve funds of the exchange and the investment of $44.5 million covered the loss of the hack that's why it doesn't affect too much in market price.

Not because they do some safety mechanism or so doesn't mean that they are totally safe or have fully secured security. Decentralized exchange might be the best place to trade and exchange but most of them isn't newbie friendly and needs an improvement due to bugs.

Notice how the price haven't moved this time. Usually many people think that an exchange hack is a disaster for Bitcoin, because it somehow undermines the value proposition of Bitcoin. This opinion is often based on past events, like Mt. Gox and other exchanges, but the negative effect of hacks have been lowering with every year. Today $60 million is a drop in an ocean, and just like fiat doesn't crash when a bank gets robbed, Bitcoin doesn't go down.

No matter how intense the regulations overseeing exchange security are, they aren't able to detect bugs and whatnot that may lead to hackers stealing significant numbers of coins. The only thing these regulations in reality do is make it less likely for inside jobs to occur, but as we see frequently, hackers are just as much of a threat. You can't weapon yourself against that as exchange.

The only "good" thing about these thefts is that it decreases people's confidence in centralized exchanges, and motivates them to look into decenteralized exchanges. People really need to see centralized exchanges mess up in order to realize how bad they are and that their funds aren't safe over there.

I know we can't banish centralized entirely, but we can make people more aware of their importance. The more people start using decentralized exchanges, the faster they'll develop because more usage means more incentive to boost development of these exchanges.

Not again! I thought exchanges in Japan would be relatively safer, because they have to be registered and have some basic safety mechanisms in place. But I guess in the crypto world, you cannot be absolutely safe.
It will be interesting to see if the investigators pin blame on somebody.

The large majority of these exchanges are not insured for large losses like this, because it will cost a fortune. They might be able to cover some of the losses or they will issue some random token to fund the damages, going forward. 

The problem is the loss in future revenue, when these exchanges loose MORE customers because of their bad reputation. They will have to find a way to pay for the damages and to improve their security and also to communicate and market themselves in a way to bring back people to their platform. 

Yeah, that is a lot of funds in a hot wallet, for an exchange barely known outside of Japan. Though I think the other vague details are quite typical for a recently discovered hack and most likely lost in translation?

What I've been dying to find out now is how those insurances are working out. One condition for the licence is signing up for insurance. With more than 5 hacks in 12 months at my recollection, one wonders if these policies will be at a huge premium for exchanges.

How the hell do they let so many more funds in their Hot Wallet than in their cold wallet? It makes no sense. And how did the Hacker ( probably was “The hacker known as 4 Chan”) access so many different wallets? Very poorly explained. Thankfully they managed to quickly find an investor. It seems that the market will not be impacted by this.

But it gets clearer and clearer that better security conditions should be the main concern of any exchange.

Yet another Japan-based cryptocurrency exchange has been hacked, losing a 6.7 billion yen (about $60 million worth of cryptocurrency), including 5,966 bitcoins.

The licensed exchange, called Zaif, is operated by the Tech Bureau. It said on Thursday that the exchange first noticed an unusual outflow of funds on the platform around 17:00 Japan time on September 14, after which the company suspended asset deposit and withdrawal services.

Tech Bureau explained that after further investigation, it discovered that hackers with unauthorized access to the exchange's hot wallets had stolen roughly $60 million in bitcoin, bitcoin cash, and MonaCoin. That being said, the exact amount of bitcoin cash stolen remains unknown.

The exchange added that since its own asset reserve is currently around 2.2 billion yen (or $20 million), it has reached an agreement with a Japan-listed firm called Fisco to receive a $44.5 million investment in exchange for a major share of ownership.

Tech Bureau said given the nature of the unauthorized fund access, it has filed the incident as a criminal case to local authorities for further investigation.

The incident marks the second hack in Japan this year, after Coincheck also reported that a whopping $520 million in NEM tokens were stolen by hackers in January.

Following Coincheck's hack, the Financial Services Agency (FSA) – Japan's financial watchdog – has launched a series of inspections on cryptocurrency exchanges in the country regarding their security measures.

The FSA had already notably issued a business improvement order to Tech Bureau in March specifically on its security and anti-money laundering enhancement.

Source: https://www.coindesk.com/crypto-exchange-zaif-hacked-in-60-million-6000-bitcoin-theft/