Japan’s Financial Service Regulator Issues Third Business Improvement Order to Hacked Crypto Exchange, Zaif
Japan’s top financial services regulator has for the third time issued a business improvement order to the hacked crypto exchange Zaif. The exchange that lost 42,327 BCH and 5,966 BTC in an apparent hack on September 14th is trying a comeback with support from two firms with upgrades to its security systems as well as help in repaying what it owes to customers.
Within the last few hours, news reports are trickling in that Japan’s Financial Services Agency (FSA) has issued a third business improvement order to Tech Bureau Inc, Zaif’s parent company. Zaif is one of Japan’s 16 regulated crypto exchanges.
According to the order, the FSA has given the firm until September 27th to hand over written responses explaining what happened. The order seeks clarification on three key points that the regulator is interested in.
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 point of interest is about the company’s “Response to customer damage,” including how it plans to compensate customers.
The improvement order also demands the firm to “review and implement concrete and effective improvement plans” relating to security breaches as noted in the last two business improvement orders. The first one was issued on March 8th and the second on June 22nd. Zaif’s security problem was mentioned in the March business improvement order. 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.
The exchange originally announced that only 5,966 BTC were stolen. However, it has now revealed that 42,327 BCH and 6,236,810 MONA were also stolen. The stolen crypto belonging to customers amounted to 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), of which 4.5 billion yen ($40 million) belongs to customers.
The exchange’s parent company, Tech Bureau, has said that since the theft occurred a little over ten days ago, it has reached and assistance agreement with Frisco Digital Asset Group Co. Ltd. The firm says that Fisco will help it with repaying customers in exchange for the majority of its shares.
Tech Bureau has also entered into an agreement with another Jasdaq-listed company, Caica Corporation, to obtain technical support to improve its security system.
