Forced Deal and FSA Scrutiny: What Do We Know About Japan’s Latest Hack
How hackers stole $59 million from Zaif.
This week, yet another major hack occurred in Japan: Hackers stole around $59 million worth of cryptocurrencies from local cryptocurrency exchange Zaif. It took several days for the platform to notice the breach, and now it has fallen under the tight scrutiny of the country’s regulator. The company that owns Zaif has already agreed to sell its majority stake to cover the losses.
Zaif was already under the FSA’s scope
Zaif was founded in May 2014 by Osaka-based startup Tech Bureau Inc. It is one of the 16 crypto exchanges in Japan which have received approval from Financial Services Agency (FSA) — since the amendment of Payment Services Act in April 2017, all crypto exchanges in the country are required to register with the regulator.
Zaif has received “punishment notices” — or business improvement orders — from the FSA at least twice this year: the first one on March 8 and the second on June 22. Specifically, in March, Zaif was one of the seven exchanges criticized for a lack of “the proper and required internal control systems” by the watchdog. The FSA has been keeping a tight grip on local exchanges, firmly reacting to security breaches after two high-profile scandals: January’s unprecedented $532 million Coincheck hack (the exchange was not registered with the FSA at the tim