Japanese Exchange Takeover: Zaif Transfers All Crypto Services to Fisco

Japanese Exchange Takeover: Zaif Transfers All Crypto Services to Fisco

Japanese crypto exchange Zaif has concluded a business transfer agreement with another regulated crypto exchange in Japan. Fisco Cryptocurrency Exchange will take over all of Zaif’s services and will be responsible for repaying users who lost their coins when Zaif was hacked last month.

Also read: 160 Crypto Exchanges Seek to Enter Japanese Market, Regulator Reveals

Business Transfer Agreement

Tech Bureau, the operator of Zaif, has signed an agreement to transfer Zaif’s business to Fisco Cryptocurrency Exchange (FCCE), the company announced Wednesday.

Japanese Exchange Takeover: Zaif Transfers All Crypto Services to FiscoZaif claims that it was hacked on Sept. 14, with approximately 7 billion yen ($62 million) stolen. On Sept. 20, Fisco Co. Ltd., the parent company of Fisco Cryptocurrency Exchange, announced a plan to provide 5 billion yen to help Tech Bureau compensate its affected users in exchange for the majority of the company’s shares. Fisco and Tech Bureau have since been working on a business transfer agreement with a tentative transfer date of Nov. 22.

“While the details of specific measures addressing damages to Zaif users are under consideration, a formal business transfer agreement for the Zaif business to FCCE was concluded,” Fisco wrote, adding:

It has been decided that all of Zaif’s services will be passed to FCCE including handled cryptocurrency, exchanges, vendors, credit transactions and Bitcoin Airfx [derivatives trading]. FCCE will also carry out the return of cryptocurrency that Zaif users lost in the outflow during the hacking incident, etc. (including debt for payment in kind for reasonable amounts of money).

Japan currently has 16 regulated crypto exchanges. Both Zaif and Fisco Cryptocurrency Exchange were licensed by the country’s Financial Services Agency in September last year. In August 2017, Fisco announced the launch of “Japan’s first bitcoin-denominated bonds.”

Fisco’s Long-Term Agreement With Tech Bureau

Japanese Exchange Takeover: Zaif Transfers All Crypto Services to FiscoThe two companies have been working together since 2016. When Fisco Cryptocurrency Exchange began operations in August 2016, it licensed the use of Tech Bureau’s white label system to provide liquidity to the new exchange.

Two days prior to the hack, on Sept. 12, Fisco Cryptocurrency Exchange reviewed its system in order to stop using Tech Bureau’s white label system and start using its new trading system provided by Ccct Inc., a wholly-owned subsidiary of Caica Inc.

Plan to Compensate Zaif’s Users

After discovering the security breach on Sept. 17, Zaif immediately suspended several services, including deposit, withdrawal, and merchant payment. The exchange claims that 5,966 BTC, 42,327 BCH, and 6,236,810 MONA were stolen.

Japanese Exchange Takeover: Zaif Transfers All Crypto Services to FiscoAccording to Wednesday’s announcement, Zaif has resumed some services for BTC and BCH, including “transactions, buying and selling through simple transactions and savings.” Tech Bureau clarified that deposit and withdrawal services “are scheduled to resume after operations have been assumed by Fisco Cryptocurrency, with the specific resumption date to be announced at a later date.”

For MONA, “compensation will be made in Japanese yen to the equivalent value” of the amount held by each user at the rate of 144.548 yen per coin, Tech Bureau detailed. At the time of this writing, MONA is trading at 148.4 yen on Zaif.

What do you think of Zaif transferring all crypto services to Fisco Cryptocurrency Exchange? Let us know in the comments section below.


Images courtesy of Shutterstock, Zaif, and Fisco Co. Ltd.


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Crypto Exchange Zaif Reveals Customer Compensation Plan after $60 Million Hack

Japan Bitcoin Exchange ZaifAfter waiting for over three weeks for a compensation strategy, victims of the Zaif cryptocurrency exchange hacking can now sigh with relief as the owner of the Japanese exchange has put forward a plan. Tech Bureau, which owns the Zaif cryptocurrency exchange, has announced that it will sell its entire stake to Fisco Digital Asset … Continued

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Zaif Delays Customer Compensation Plan after $60 Million Crypto Theft

Tech Bureau, operator of Japanese cryptocurrency exchange Zaif, is yet to reveal a compensation strategy for customers who suffered losses from an infamous $60 million theft three weeks ago. Osaka-based Tech Bureau has already halted new user registrations to focus on reimbursing customers who collectively lost ¥4.5 billion ($40 million) from the ¥6.7 billion ($60

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54% of Cryptocurrency Exchanges Have Security Holes

Traders hope and expect the exchange they’re trading on takes security seriously. But while all crypto platforms pay lip service to good cybersecurity practices, many fail at even the most basic measures such as enforcing strong passwords. New research has found 54% of all cryptocurrency exchanges have poor security in at least one area, leaving them and their users vulnerable to attack.

Also read: Japanese Regulators Urgently Respond to Zaif’s Hack

Despite Hundreds of Millions of Dollars in Hacks, Many Exchanges Still Have Shoddy Security

The cryptocurrency landscape has changed significantly since Bitcoin’s earliest days, but one thing that’s remained constant is exchange breaches. From the Mt Gox days to last month’s Zaif hack, exchanges have been regularly surrendering their funds, despite the increasing value of crypto assets incentivizing them to up their opsec. A detailed new report from ICO Rating has revealed the extent of the lax security practices that pervade many exchanges, including several supposedly top-tier platforms.

The ICO listing and analysis site profiled 100 exchanges whose daily volume exceeds $1 million and found most of them wanting in one or more areas. For example:

  • 41% of exchanges allow passwords with fewer than 8 symbols
  • 37% of exchanges allow passwords with either digits or letters alone
  • 5% of exchanges allow the creation of accounts without email verification
  • 3% of exchanges lack 2FA
  • Only 46% of exchanges meet all four parameters
  • Just 4% of Exchanges Were Found to Have Best Practice for Domain Security

ICO Rating also considered registrar and domain security. Specifically, it looked for things such as a registry lock, preventing unauthorized changes to the domain registry, and DNSSEC, to prevent DNS cache poisoning, which has been an attack vector previously used to target platforms like Myetherwallet. Its findings were as follows:

  • Only 2% of exchanges use registry lock
  • Only 10% of exchanges use DNSSEC
  • Only 4 % of exchanges use best practice in 4 out of 5 of these areas

Coinbase and Kraken Score the Highest – Okcoin the Lowest

ICO Rating concludes by publishing a table rating all 100 exchanges profiled according to their aggregated security score. No exchange manages to score 90% or higher but Coinbase comes the closest, at 89/100, followed by Kraken at 80 and then Bitmex and Gopax in joint third (78). Other notable entries on the list are Cobinhood (8th), Ethfinex (12th), Bittrex (13th) and Binance (17th).

54% of Cryptocurrency Exchanges Have Security Holes
The top 10 exchanges for security according to ICO Rating

Bottom of the list is Okcoin.cn, which scores just 15/100. Other noteworthy exchanges that score poorly are Mercatox (25/100), the hacked Zaif (29/100), and Bithumb (34/100). While previous attempts have been made at rating the security practices of cryptocurrency exchanges, ICO Rating’s report is the most detailed yet. It is not comprehensive, for it does not detail such matters as dynamic IP verification, withdrawal checks, and other security measures. Nevertheless, it provides a snapshot of the health of crypto exchanges and shows there’s room for improvement across the board.

Which cryptocurrency exchanges do you think suffer from lax security? Let us know in the comments section below.


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Japan Gov’t Outraged by $60m Crypto Hack of Zaif, Regrets Lack of Suspension

Earlier this month, major Japanese crypto exchange Zaif was hacked, losing $60 million worth of crypto in user funds. The Financial Services Agency (FSA), the main financial watchdog of Japan, has stated that it regrets allowing Zaif to continue its operation after the exchange was given two warnings to drastically improve its system. “It is

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Japanese Exchange Zaif Hit With Third Improvement Order, Revises Hack Estimate

Zaif Hit With Third Improvement Order, Revises Hack Estimate

Japan’s top financial regulator has issued hacked crypto exchange Zaif a third business improvement order. The exchange has revised its theft estimate, after discovering that 42,327 BCH were also stolen in addition to 5,966 BTC. Zaif has also signed agreements with two companies for their help with repaying customers and improving its security system.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Third Business Improvement Order

Japan’s Financial Services Agency (FSA) issued a third business improvement order to Tech Bureau Inc. on Tuesday, Sept. 25. Tech Bureau is the operator of crypto exchange Zaif which was hacked on Sept. 14 but the breach was not detected until Sept. 17. Zaif is one of Japan’s 16 regulated crypto exchanges.

Zaif Hit With Third Improvement Order, Revises Hack EstimateIn its order, the FSA has given the firm until Sept. 27 to submit written reports to explain the situation. Three key areas must be addressed. The first concerns the “Determination of the facts and causes of the leakage…and [the] formulation and execution of measures to prevent recurrence.” The second concerns the “Prevention of customer damage increasing.” The third is about the firm’s “Response to customer damage,” including how it plans to compensate customers.

The order also requires the firm to “review and implement concrete and effective improvement plans” relating to security breaches as outlined in the previous two business improvement orders. The first order was issued on March 8 and the second on June 22.

Zaif Hit With Third Improvement Order, Revises Hack EstimateZaif’s security problem was outlined in the March business improvement order. The agency’s on-site inspection of the exchange at the time revealed system failures and many instances of unauthorized withdrawals. The regulator noted that the exchange’s management team had not “taken appropriate measures to prevent reoccurrence” and had not provided its customers with appropriate disclosure.

Zaif Revises Theft Estimate

Zaif Hit With Third Improvement Order, Revises Hack EstimateWhen Zaif first discovered the breach last week, only 5,966 BTC were confirmed stolen.

The exchange has since revealed that 42,327 BCH and 6,236,810 MONA were also stolen. The stolen crypto belonging to customers total 2,723.4 BTC; 40,360 BCH; and 5,911,859 MONA.

The exchange has also revised its overall theft estimate to approximately 7 billion yen (~$62 million), 4.5 billion yen (~40 million) of which belong to customers.

Zaif’s Plan to Repay Customers

Zaif Hit With Third Improvement Order, Revises Hack EstimateTech Bureau explained that, after the breach was detected, it signed a capital alliance agreement with Fisco Digital Asset Group Co. Ltd., a subsidiary of Jasdaq-listed Fisco Corporation, for help with repaying customers in exchange for the majority of its shares.

Fisco independently announced last week that its basic agreement with Tech Bureau includes “financial support amount of 5 billion yen [~$44.3 million],” which it believes to be sufficient to cover customer damages. “If [the total] damage amount fluctuates after future investigation, we will review again,” the firm emphasized.

In addition, Tech Bureau has entered into an agreement with another Jasdaq-listed company, Caica Corporation, to obtain technical support to improve its security system.

What do you think of Zaif’s situation? Let us know in the comments section below.


Images courtesy of Shutterstock, FSA, Zaif, and Fisco.


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‘Business Improvement Order’: Japan Slaps Crypto Exchange Operator after $60 Million Theft

Japanese financial authorities are ramping up their scrutiny into the domestic crypto exchange sector after last week’s ¥6.7 billion ($60 million) hack of Tech Bureau’s exchange Zaif. In an announcement today, Japan’s Ministry of Finance struck Osaka-based Tech Bureau, operator of the licensed cryptocurrency exchange Zaif, with “administrative penalties” wherein the latter sees a number … Continued

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Markets Update: Despite Negative Headlines – Crypto-Prices Continue to Rise

A few days ago digital asset markets saw some good gains pushing the entire crypto-economy up past $229 billion. Both bitcoin cash (BCH) and bitcoin core (BTC) had nice percentage spikes with BCH up 13 percent, and BTC up 3.5 percent over the last week. However, the biggest gainer this week was ripple (XRP) jumping over 103 percent over the course of the past seven days.

Also read: Bitcoin Glyphs Added to Apple’s Shortcuts Application

Cryptocurrency Markets Rebound and Consolidate

It was a weird week in cryptocurrency land, to say the least. During the last seven days, digital asset enthusiasts heard about the Securities Exchange Commission’s (SEC) deciding to hold off on the Vaneck/Cboe ETF decision until they get further commentary. Then a critical exploit that could have caused massive inflation was found in the Core reference client (and many other implementations) by a BCH developer. Lastly, the Japanese exchange Zaif revealed this week it lost close to 6000 BTC in a hack. Now one would think all of these things would affect cryptocurrency markets in a negative way. On the contrary, digital currency markets spiked in value as a great majority of coins saw seven-day gains.

The Top Crypto-Markets

Bitcoin core (BTC) markets over the last week are up 3.4 percent (US$6,723) and the cryptocurrency’s market valuation is around $116.2 billion today. Ethereum (ETH) markets shot up pretty good this week as one ETH ($244) has gained 12 percent. Of course, the cryptocurrency crowd witnessed the 103 percent increase ripple (XRP) markets experienced this week. One XRP is valued at $0.56 this Sunday and the coin’s market capitalization is about $22.5 billion. Bitcoin cash (BCH) markets are up 13 percent per BCH ($492) over the last seven days and the currency’s market valuation is about $8.5 billion this weekend. Lastly, EOS is priced at $5.45 and the EOS market performance over the last weeks is up 12.2 percent.

Markets Update: Despite Negative Headlines - Crypto-Prices Continue to Rise

Bitcoin Cash (BCH) Market Action

Bitcoin cash market action today is showing the spot price hovering at $492 per coin but this Sunday BCH is up 3.12 percent over the past 24 hours. Over the last week, BCH dropped to a low of $411 on September 17 and went back to a high of $501 on the 21st. The top bitcoin cash swapping exchanges today are EXX, Lbank, Hitbtc, Okex, and Huobi. The top currency pairs traded for bitcoin cash this weekend include BTC (51.8%), USDT (30.8%), ETH (6.9%), USD (5.1%), and KRW (2.3%). Bitcoin cash markets hold the sixth highest trade volumes today below eos (EOS) and above litecoin (LTC) volumes.

Markets Update: Despite Negative Headlines - Crypto-Prices Continue to Rise

BCH/USD Technical Indicators

The BCH/USD daily and 4-hour charts on Bitfinex and Binance indicate bulls are showing some signs of tiring out. We saw a big spike by the BCH bulls but it hit large resistance as markets gathered near 200 MA and corrected. Today, looking at the BCH/USD 4-hour chart, the 200 Simple Moving Average is above the 100 SMA trendline showing the path towards the least resistance is towards the downside. The 4-H RSI (61.6) shows the bulls may be exhausted and we could see some more sell off before another attempted upper leg jump. Order books show there’s some heavy resistance from here until $570 and another pitstop around the $590-630 range. Looking behind us we can see some foundational support between now until the $425 range and bears will be stopped there for a good period of time.

BCH/USD daily chart 9/23/18.

The Verdict: Despite Some Setbacks, Market Confidence Seems to Be on the Rise

Overall market confidence seems to be on the rise despite the recent BTC inflation bug and the SEC’s recent announcement to push off the decision to approve or deny the Vaneck/Cboe ETF. BTC/USD shorts, however, are very high still with over 30,000 short positions but ETH/USD short contracts have dropped significantly lower after touching their ATH. ETH/USD shorts have been cut from 26,000 on September 17 to just over 12,000 today.

Charles Hayter, the co-founder and CEO of the cryptocurrency data website Cryptocompare, believes last week’s ETH drop shook up market sentiment. “The fall in ethereum has spooked the market,” Hayter details. However, on a more positive note, Hayter emphasizes “there are multiple incumbent financial institutions looking closely at the space.”

Digital asset trade volumes have increased as this weekend has seen trade volume between $13-15 billion USD over the last 48 hours. This weekend’s verdict is far more optimistic than last weekend but it’s likely we will see some heavy consolidation and some corrections before the next level up, unless bears regain their strength.

Where do you see the price of BTC, BCH, and other coins headed from here? Let us know in the comment section below.

Disclaimer: Price articles and markets updates are intended for informational purposes only and should not to be considered as trading advice. Neither Bitcoin.com nor the author is responsible for any losses or gains, as the ultimate decision to conduct a trade is made by the reader. Always remember that only those in possession of the private keys are in control of the “money.”


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Japanese Regulators Urgently Respond to Zaif’s Hack

Japanese Regulators Urgently Respond to Zaif's Hack

Following the hack of Zaif, one of Japan’s regulated crypto exchanges, the country’s financial regulator immediately responded, launching an emergency inspection of the exchange and a survey of all other crypto exchanges. Finance Minister Taro Aso has also commented on the situation. In addition, the recently established self-regulatory body has asked all exchanges to inspect their systems.

Also read: 160 Crypto Exchanges Seek to Enter Japanese Market, Regulator Reveals

FSA Launches Emergency Inspection

Japanese Regulators Urgently Respond to Zaif's HackJapan’s top financial regulator, the Financial Services Agency (FSA), has responded to the hack of Zaif, one of its regulated crypto exchanges. Japan only has 16 exchanges registered with the FSA.

Zaif announced on Thursday, Sept. 20 (Japan time), that it was hacked on Sept. 14 but noticed the breach on Sept. 17. The exchange claims that at least 5,966 BTC were stolen and estimates the total damage to be approximately 6.7 billion yen (~US$60 million). Other than BTC, it believes that some BCH and MONA were also stolen.

Following Zaif’s announcement, the FSA immediately launched an emergency inspection of the exchange, according to local media. The Mainichi Shimbun reported:

The FSA inspected the company’s base in Osaka on the same day in order to confirm the circumstances…We will examine in detail the [exchange’s] safety management system etc.

Japanese Regulators Urgently Respond to Zaif's HackThe news outlet added that “On the same day, the Financial Services Agency launched a simultaneous survey on the customers’ property management situations of all virtual currency exchange operators.”

Japanese Regulators Urgently Respond to Zaif's Hack
Taro Aso.

The Japanese regulator is still dealing with the aftermath of Coincheck’s hack in January when hackers stole 58 billion yen (~$534 million) worth of the cryptocurrency NEM. Since then, the agency has stepped up its oversight of crypto exchanges, including on-site inspections. Last month, it revealed the result of the inspection of 23 crypto exchanges which shows many problems.

Deputy Prime Minister and Minister of Finance Taro Aso was quoted by Nikkei speaking at a press conference after the cabinet meeting on Sept. 21 (Japan time):

It is regrettable that virtual currency of about 6.7 billion yen leaked from illegal access from the virtual currency exchange company Tech Bureau…There is a problem with [its] system and governance…We will grasp the actual situation and conduct administrative responses necessary for user protection.

Third Business Improvement Order

Following Zaif’s hack announcement, Reuters reported that the FSA is considering issuing a third business improvement order to Tech Bureau, the operator of Zaif. The firm has already received two business improvement orders: one in March and another in June. However, the news outlet noted:

Even with repeated administrative sanctions, strengthening of the [exchange’s] internal control system did not proceed.

The Sankei Shimbun quoted an investigator saying, “I am overly concerned about [Zaif’s] security,” noting that the situation could “repeat the same thing as [the] Coincheck incident.”

Response From Self-Regulatory Body

Japanese Regulators Urgently Respond to Zaif's Hack
Taizen Okuyama.

The Japan Virtual Currency Exchange Association (Jvcea) has also issued a statement regarding the hack of Zaif. The association is a self-regulatory body whose members are the 16 registered crypto exchanges including Tech Bureau.

“Although the situation is unknown at this time, our association will also request the company to take measures necessary for user protection, such as protection of user property and prompt disclosure of information,” the president of the association, Taizen Okuyama, announced on Sept. 20. He added:

Also, in order to avoid the same situation, the association [has] requested all members to conduct emergency inspections of [their] virtual currency management systems.

Exchanges Self-Inspecting

A number of crypto exchanges in Japan have made announcements about their own systems after the news of Zaif’s hack spread.

Japanese Regulators Urgently Respond to Zaif's Hack“In light of the recent theft of assets from Tech Bureau Corp., we have conducted an immediate inspection of our asset management systems. We detected no signs of unauthorized activity,” Bitflyer claims. Japan’s largest crypto exchange by trading volume has stopped accepting new customers since it received a business improvement order from the FSA in June.

GMO Coin, the crypto subsidiary of Japan’s internet giant GMO, has made an announcement in response to customer inquiries about the possibility of theft from its platform. The exchange wrote:

We check customer balances and the balance of the virtual currency kept by our company every business day, and also check [for] the existence of theft and spill in the process of sorting and storing customers’ virtual currency and our own virtual currency separately…we have confirmed that there is no problem even today and in the past confirmed results.

Another crypto exchange, Bitpoint, has notified its customers that it has “carried out urgent re-inspections and confirmed that no illegal outflow of virtual currency is taking place and that there are no problems with security measures.”

What do you think of how the Japanese regulators respond to Zaif’s hack? Let us know in the comments section below.


Images courtesy of Shutterstock, Pixabay, Zaif, and Money Partners.


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How the Recent $60 Million Crypto Hacking Attack Will Impact Japanese Market

Zaif, a major crypto exchange in Japan, was hacked this week, losing nearly $60 million in user funds in a high profile security breach. Local publications including Japan Times reported that 6.7 billion yen was stolen by an unknown group of hackers, 2.2 billion yen in corporate funds and 4.5 billion yen in user funds … Continued

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Japan Cryptocurrency Theft Cases Tripled in H1 2018, $530 Million Stolen: Police

Barely before the ink had dried on the news that Japanese cryptocurrency exchange Zaif had been hacked and slightly less than US$60 million stolen, the National Police Agency (NPA) of Japan has released a report highlighting the vulnerability of Japan’s crypto space. According to the NPA, the number of incidents involving the theft of funds

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Licensed Crypto Exchange Zaif Plans Compensation after 6,000 Bitcoins, $60 Million Crypto Theft

In the second major hack of a Japanese cryptocurrency exchange this year, some 6.7 billion yen ($60 million) in cryptocurrencies were stolen from the wallets of Zaif of which 4.5 billion yen ($40 million) belonged to customers. Tech Bureau, operator of cryptocurrency exchange Zaif, confirmed the hack occurred between 1700 and 1900 local time on … Continued

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Japanese Regulated Exchange Zaif Hacked – Nearly 6000 BTC Stolen

Japanese Regulated Exchange Zaif Hacked – Nearly 6000 BTC Stolen

Japanese government-approved cryptocurrency exchange Zaif has confirmed that it has been hacked. After a preliminary investigation, the exchange says at least 5,966 BTC have been stolen, with an estimated total damage of $60 million. Some of the stolen coins belong to the exchange but the majority belong to customers.

Also read: 160 Crypto Exchanges Seek to Enter Japanese Market, Regulator Reveals

Zaif Hacked

Japanese Regulated Exchange Zaif Hacked – Nearly 6000 BTC StolenJapanese crypto exchange Zaif has been hacked, its operator announced on Wednesday, Sept. 19. Tech Bureau Inc., which operates Zaif, explained that the exchange “detected server abnormality” on Monday and immediately suspended several services, including deposit, withdrawal, and merchant payment services.

The company revealed that unauthorized access to its hot wallet was detected between 17:00 and 19:00 on Sept. 14, elaborating:

Some of the deposit and withdrawal hot wallets were hacked by unauthorized access from the outside, and part of the virtual currencies managed by us was illegally discharged to the outside.

Japanese Regulated Exchange Zaif Hacked – Nearly 6000 BTC StolenThe exchange believes that three cryptocurrencies may have been stolen: BTC, BCH, and MONA. While it has confirmed that 5,966 BTC were stolen, the theft of the other two cryptocurrencies is still being investigated. Tech Bureau explained that the extent of the damage is currently unknown because the exchange’s server will not be restarted until it is confirmed to be secured in order to prevent further damage. Nonetheless, the company clarified:

It is estimated that the total loss due to the damage…is equivalent to about 6.7 billion yen [~US$60 million] (including MONA and BCH) in Japanese yen.

Out of the total damage, the company says 2.2 billion yen (~$19.6 million) belong to the exchange and 4.5 billion yen (~$40 million) belong to customers. Tech Bureau said it has asked for 5 billion yen (~$44.6 million) in assistance from a subsidiary of Fisco Ltd. to help repay affected customers, Kyodo News described.

Investigating and Rebuilding

In its announcement, Tech Bureau stated that it reported the breach to the Treasury Department on Sept. 18. “This case is a criminal case,” the company wrote, adding that it has requested an investigation into the breach. The company detailed:

Currently, we are checking and strengthening security, rebuilding the server, etc., in order to restart the system of depositing / withdrawing virtual currency.

The Osaka-based exchange, established in 2014, is one of the 16 government-approved crypto exchanges in Japan. The country’s Financial Services Agency (FSA) issued the company two business improvement orders: the first was on March 8 and the second on June 22. The agency ramped up its oversight of crypto exchanges after hackers stole 58 billion yen (~$534 million) worth of the cryptocurrency NEM from Coincheck in January.

What do you think of Zaif’s hack? Let us know in the comments section below.


Images courtesy of Shutterstock and Zaif.


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Newsflash: Japanese Cryptocurrency Exchange Zaif Hacked, $59 Million in Losses

Japanese cryptocurrency exchange Zaif was the victim of a major hack last week, local media sources have reported and the company has now confirmed. The hack, which occurred on Sept. 14 but was not discovered until Sept. 17, saw the hacker steal various amounts of bitcoin, bitcoin cash, and monacoin from the exchange’s hot wallet, … Continued

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Japanese Crypto Exchanges Working on Lowering Margin Trading Limits

Japanese Crypto Exchanges Working on Lowering Margin Trading Limits

Japanese cryptocurrency exchanges may soon set a strict limit on the leverage they offer for margin trading in order to better protect investors. The association comprised of 16 government-approved crypto exchanges is reportedly imposing a leverage limit as part of its self-regulatory rules. There will be a grace period and exceptions.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Leverage Limit on Margin Trading

The Japan Virtual Currency Exchange Association (JVCEA) is reportedly planning to impose a leverage limit for crypto margin trading in order to protect investors, local media reported Wednesday.

Japanese Crypto Exchanges Working on Lowering Margin Trading LimitsThe association’s members are all of Japan’s 16 government-approved crypto exchanges. It was set up in response to the hack of Coincheck in January in order to rebuild public trust in the crypto space.

The JVCEA has been working on self-regulatory measures. Nikkei reported Wednesday that the proposed rules include “an across-the-board cap on the extent to which traders can use borrowed funds to magnify gains and losses,” adding:

The self-regulatory body for Japan’s cryptocurrency exchanges is firming up plans to set a 4-to-1 leverage limit on margin trading, aiming to reduce the risk of massive losses given the volatility of these assets.

“The measure would take effect after a one-year grace period. The organization is considering allowing exceptions if exchanges meet certain conditions, such as implementing automatic stop-loss mechanisms,” the publication detailed. With the volatility of crypto trading, “some highly leveraged cryptocurrency investors in Japan have suffered heavy losses, spurring criticism from consumer protection groups.”

Japanese Crypto Exchanges Working on Lowering Margin Trading LimitsWhile the association itself has not confirmed its plans, the news outlet wrote that the “draft rules also include bans on insider trading and dealing in cryptocurrencies suspected to be used in money laundering.”

Last month, six of the association’s members received business improvement orders from Japan’s top financial regulator, the Financial Services Agency (FSA). Subsequently, Yuzo Kano and Hiroyuki Noriyuki, representative directors of Bitflyer and Bitbank Corporation, who were serving as vice presidents of the association, resigned to focus on their exchange businesses.

Exchanges Set Their Own Limits

Each cryptocurrency exchange in Japan sets its own limit for margin trading. DMM Bitcoin, the crypto exchange of Japanese e-commerce and entertainment giant DMM Group, for example, offers 5 times leverage.

Japanese Crypto Exchanges Working on Lowering Margin Trading LimitsZaif, operated by Tech Bureau, offers up to 7.77 times leverage. “You can choose leverage from 1x to 7.77x, according to your trading style,” the exchange wrote on its website.

GMO Coin, the exchange subsidiary of Japanese internet giant GMO, offers 5 times and 10 times leverage for BTC/JPY. However, only 5 times leverage is offered for the margin trading of ETH, BCH, LTC, and XRP against the JPY.

Bitpoint offers leverage of 2x, 5x, 10x, and 25x for BTC/JPY, BTC/USD, BTC/EUR, and BTC/HKD. Bitflyer’s Lightning platform allows leverage of up to 15 times.

Nikkei further elaborated:

Japan currently lacks limits on cryptocurrency margin trading…Some exchanges permit leverage of up to 25 times the deposit, citing regulations, setting that as the ceiling for foreign exchange trading.

Do you think Japanese exchanges should have a lower leverage limit? Let us know in the comments section below.


Images courtesy of Shutterstock and the FSA.


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Japanese Crypto Exchanges Submit Business Improvement Plans

Japanese Crypto Exchanges Submit Business Improvement Plans

Six government-approved cryptocurrency exchanges in Japan have submitted their business improvement plans to the country’s top financial regulator. While improving their internal systems, most have also engaged in different areas of business expansion.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Six Business Improvement Plans Submitted

Japanese Crypto Exchanges Submit Business Improvement PlansSix of Japan’s 16 government-approved cryptocurrency exchanges have submitted their business improvement plans to the country’s top financial regulator, the Financial Services Agency (FSA). On June 22, the FSA issued business improvement orders to Bitflyer, Bitpoint Japan, Bitbank, Btc Box, Quoine and Tech Bureau.

Complying with the orders, each of the six companies confirmed that they have submitted a written business improvement plan to the agency on Monday, July 23.

Bitflyer was ordered to improve in ten areas, Btc Box nine, Bitbank eight, and Quoine seven. Both Bitpoint and Tech Bureau were ordered to improve in six areas. The June 22 order was the second for Tech Bureau, the operator of the Zaif exchange.

Japanese Crypto Exchanges Submit Business Improvement PlansThe only company to receive an order for a “drastic review of [its] management system” was Bitflyer. The exchange, along with Quoine and Btc Box, also received an order to construct “a management system related to the exclusion of antisocial forces.”

Other improvement items the FSA ordered include “Building a legal compliance system,” “Establish a risk management system for money laundering and terrorist financing,” “Construction of a separation control system for user property,” “Establishment of a control system related to user protection measures,” and “Construction of the risk management system in accordance with the new handling or the like of the virtual currency.”

New Trading and Payment Tools

Japanese Crypto Exchanges Submit Business Improvement PlansSince receiving a business improvement order, Bitpoint has launched a couple of new services. A trading tool called Bitpoint Advance was launched on June 29. It is “designed to quickly deal with price information such as charts and board information…on one screen, without changing the screen,” the exchange described. The tool supports “both in-kind trading and leveraged transactions.”

Earlier this month, Bitpoint upgraded its crypto payment system for merchants called Bitpointpay, which now supports BCH, BTC, and ETH. The company detailed:

We have upgraded the version to correspond to bitcoin cash (BCH) with the aim of expanding the means of settlement for users … As a result of this upgrade, customers (payers) can choose to pay franchisees from the three types of virtual currencies.

Japanese Crypto Exchanges Submit Business Improvement Plans

Personnel Recruitment

After apologizing to its customers again on Monday, Bitbank wrote that they have “fundamentally reviewed the internal control system and management system.” The measures, according to the company, were made “in order to ensure proper and reliable operation of the business towards customers’ recovery of trust.”

Japanese Crypto Exchanges Submit Business Improvement PlansTo avoid future problems, Bitbank also indicated that they will “continue to review the management strategy and others.”

Last week, the company launched a career site to “strengthen its recruitment.” The site currently lists a number of vacancies to be filled such as various positions in engineering, design, marketing, PR, HR, internal audit and compliance. The company says:

We are currently growing rapidly, but we are looking for someone who can work together to grow more.

App Replacement

Japanese Crypto Exchanges Submit Business Improvement PlansZaif announced last week that its existing iOS and Android smartphone applications will be terminated on October 15. “Support will [also] be terminated on Tuesday, October 16, 2018,” the exchange wrote.

The company emphasized that deposits, withdrawals, and trading on the Zaif exchange will be unaffected, clarifying that “Currently we are developing dedicated new applications. We will make every effort to provide you with better service with a new official application.”

New Account Signups Still Suspended

Japanese Crypto Exchanges Submit Business Improvement PlansMeanwhile, Japan’s largest crypto exchange by trading volume, Bitflyer, issued a notice Monday stating that it “strictly observes the relevant laws and regulations and further strengthens the management system throughout the company.”

“We will make every effort to prevent recurrence and restore customer’s trust,” the company emphasized.

The exchange stopped accepting new customers immediately after receiving the improvement order on June 22. At the time of this writing, its website still shows:

We are currently pausing the account creation by new customers voluntarily in order to do our utmost to build a proper service management system and to improve our suggestions.

What do you think of how the Japanese crypto industry is evolving? Let us know in the comments section below.


Images courtesy of Shutterstock, Nikkei, Bitflyer, Bitbank, Bitpoint, Btc Box, and Zaif.


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