Japanese Financial Regulator Suspends Two Crypto Exchanges

According to the order, FSHO and Eternal Link exchanges stop all operations related to virtual currency until June 7 and June 5 respectively
09 April 2018   524

The Kanto Local Finance Bureau of Japan's Ministry of Finance has published a new report on April 6, describing the Administrative Punishment for Financial Institutions and the administrative penalties. The Japanese financial regulator was investigating the activity of the exchanges, from March, and it finally announced its decision to suspend two cryptocurrency exchanges: Eternal Link and FSHO, which did not properly require customers to provide information such as purposes of trades.

According to the order, FSHO exchange stops all operations related to virtual currency from April 8 until June 7. Moreover, during the period from April 6, to June 5, all operations related to the virtual currency exchange business should be stopped by Eternal Link exchange.

There are several measures which are required from the exchanges to unsure that they are reliable:

  • Execution of confirmation at the time of trading on trading and execution of notification of suspicious transactions
  • Effective management system including money laundering and terrorist financing including review of business model
  • Secure management of user information
  • Risk management system
  • Proper implementation of legal book preparation and preservation

Moreover, according to the report, both cryptocurrecny exchanges did not implement procedures around reporting suspicious transactions to the Financial Service Authority.

$60M Stolen From Zaif Exchange

As a result of the attack, which occurred as early as September 14, 4.5 billion yen owned by its users were stolen from the hot wallets of the exchang
20 September 2018   270

Hackers were able to steal almost $ 60 million in cryptocurrencies from the Japanese crypto-exchange Zaif, Cointelegraph reports.

As a result of the attack, which occurred as early as September 14, 4.5 billion yen owned by its users were stolen from the hot wallets of the exchange, as well as 2.2 billion yen, which was the company's assets. Thus, the total loss of Zaif amounted to 6.7 billion yen or about $ 59.7 million.

Tech Bureau Inc, which is the operator of Zaif, in a press release says that it found a server error on September 17, after which the input / output of funds on the exchange was suspended. September 18, the company realized that the error was caused by a hacker attack, and reported the incident to the Financial Services Agency of Japan. Hackers stole 5,966 bitcoins, as well as assets in Bitcoin Cash and MonaCoin.

According to Tech Bureau Inc, Fisco Digital Asset Group will help to partially compensate for the damage caused to users by providing 5 billion yen ($ 44.5 million). Tech Bureau agreed with Fisco to dismiss more than half of its directors and corporate auditors, and Fisco in turn will become its main shareholder.

Earlier this year, Zaif already recognized the existence of a "system malfunction", using which, the clients of the exchange were temporarily able to credit trillions of dollars in their accounts with bitcoins.