Hackers Steal $60 Million From Japanese Crypto Exchange Zaif

(Bloomberg) -- Hackers stole $60 million of digital coins from a Japanese exchange, the latest in a string of thefts that have kept many institutional investors wary of putting their money in cryptocurrencies.

The theft of Bitcoin, Monacoin and Bitcoin Cash from Zaif, an exchange owned by Osaka-based Tech Bureau Corp., occurred last week and was disclosed by Tech Bureau in a statement on Thursday. About 2.2 billion yen ($19.6 million) of stolen coins belonged to the exchange and the rest was client money.

Virtual currency exchanges have suffered at least five major hacks this year, one reason why professional money managers have largely steered clear of the market even as individual investors piled in.

Japan, home to some of the world’s most active digital-asset exchanges, has also hosted two of history’s biggest known crypto hacks -- the Mt. Gox debacle of 2014 and the theft of nearly $500 million in digital tokens from Coincheck Inc. in January.

The country’s regulators, who have given crypto markets a stamp of approval by rolling out a registration system for exchanges, have come under growing pressure to ensure that the venues are secure. An estimated 12 percent of the world’s Bitcoin trades are paired against the Japanese yen, according to CryptoCompare.com.

Japan’s Financial Services Agency has asked Tech Bureau to submit a report on the incident and plans to perform an on-site inspection of the company after receiving the document as soon as Thursday, a person with knowledge of the matter said. Zaif, ranked by Coinmarketcap.com as the 35th largest cryptocurrency exchange by reported turnover, was among the exchanges ordered by the regulator to improve operations in a crackdown that followed the Coincheck hack.

Bitcoin was little changed at $6,386 as of 12:13 p.m. Tokyo time, underscoring that crypto investors have become increasingly inured to cyberthefts. The biggest digital coin has lost more than half its value this year, following a 15-fold gain in 2017.

Tech Bureau pledged to compensate users who lost assets in the hacking, and immediately signed an agreement with a Fisco Ltd. unit aimed at receiving 5 billion yen in financial support in exchange for selling the majority of the company. Tech Bureau didn’t give further details of how the hack happened, citing a criminal investigation that has been launched into the breach.

Withdrawals and deposits were halted as Zaif rebuilds its system, with the exchange unable to say when they will resume.

©2018 Bloomberg L.P.