Japanese Cryptocurrency Exchange Hacked, $59 Million in Losses Reported

Japanese cryptocurrency exchange Zaif has discovered that a security breach on September 14 led to the loss of $59 million worth of cryptocurrency.

Hackers have reportedly stolen $59 million worth of cryptocurrencies from Japanese cryptocurrency exchange Zaif, Cointelegraph Japan reports September 19.

According to a local report, as a result of a security breach on September 14, hackers managed to steal 4.5 billion yen from users hot wallets, as well as 2.2 billion yen from the assets of the company, with total losses amounting to 6.7 billion yen or around $59.7 million.

Tech Bureau Inc, which operated Zaif, stated in press release that the exchange detected a server error on September 17, after which Zaif suspended deposits and withdrawals. On September 18, the exchange realized that the error was a hack, and reported the incident to the Japanese financial regulator, the Financial Services Agency (FSA). Hackers stole 5,966 bitcoins (BTC) in addition to some Bitcoin Cash (BCH) and MonaCoin (MONA).

According to Tech Bureau Inc, the firm Fisco Digital Asset Group will help Zaif cover lost customer assets by providing 5 billion yen ($44.5 million). Tech Bureau made an agreement with Fisco to dismiss more than half of its directors and corporate auditors in addition to Fisco becoming a majority shareholder in the company.

Zaif exchange is the 101st largest cryptocurrency exchange in terms of trade volume, according to CoinMarketCap.

Earlier this year, Zaif admitted to a “system glitch” that allowed users to temporarily acquire trillions of dollars worth of Bitcoin (BTC) for free in February. 16 customers were accidentally able to “trade” yen for cryptocurrency at a rate of 0 yen per coin.

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Japan’s Financial Regulator Expands to Handle Influx of Crypto Exchange License Demand

Japan’s Financial Services Agency (FSA) plans to bolster its dedicated workforce by 12 personnel to better handle the growing influx of applications for crypto exchange licenses.

Japan’s Financial Services Agency (FSA) plans to bolster its workforce by 12 personnel to better handle the growing influx of applications for crypto exchange licenses, Reuters Japan reported September 12.

At a crypto exchange study group meeting Wednesday, the FSA’s vice commissioner for policy coordination, Kiyotaka Sasaki, said that the agency is currently conducting its oversight of crypto exchanges with a team of around 30 people, whose work includes the review of license applications.

Yet Sasaki reportedly stressed that with over 160 firms currently awaiting review, the dedicated number of personnel is insufficient, saying the agency would need to add 12 further persons in 2019 to handle its “biggest problem” – the burgeoning number of license applications.

According to a document released after the meeting, the FSA has to date been reviewing sixteen cases, twelve of which withdrew their application at the FSA’s request and one of which has been rejected. Three, including Coincheck — which notoriously suffered the largest hack in crypto industry history this January — await a final decision.

The document further states that the agency plans to refine its risk profiling mechanisms as part of its “ongoing in-depth monitoring” of the exchange space, and to work increasingly closely with related ministries and agencies vis-a-vis non-registered firms, both domestic and overseas.

The document highlights concerns over insufficient anti-money laundering (AML) and terrorism financing prevention measures among exchanges, and points to other concerns regarding business models, risk management and compliance, internal audits, and corporate governance.

As previously reported, the FSA published the results of its on-site inspections of crypto exchange operators last month, finding that  the total digital assets of domestic exchanges have surged to 792.8 billion yen ($7.1 billion) — an over six-fold increase within the space of one year.

Meanwhile, as today’s document reiterates, most exchanges’ system personnel are fewer than 20 people, meaning that one employee on average was found to be managing digital assets worth 3.3 billion yen ($29.6 million).

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Mt. Gox Opens Online Rehabilitation Claim Filing System for Corporate Users

Defunct Japanese Bitcoin exchange Mt. Gox has extended its online rehabilitation claim filing system to corporate users.

Now-defunct Japanese Bitcoin (BTC) exchange Mt. Gox has extended its online rehabilitation claim filing system to corporate users, according to an official announcement posted on the exchange’s site today, September 12.

Today’s announcement follows upon an online system for individual (non-corporate) users that was released August 23, allowing them to file proofs of bankruptcy claims. The deadline for filing the rehabilitation claims is October 22, 2018, and the claims can also alternatively be filed offline.

The announcement has been signed by Tokyo attorney Nobuaki Kobayashi, who has been appointed to act as civil rehabilitation trustee to manage Mt. Gox’s bankruptcy estate funds.

Beginning Q4 last year, Kobayashi’s oversight of the selling off of vast reserves of BTC in order to reimburse affected Mt. Gox users had earned him the moniker of Tokyo’s Bitcoin Whale amid allegations the sell-offs had a conspicuously adverse effect on markets.

As previously reported, Kobayashi has since pledged to cease the sell-offs as the proceedings for civil rehabilitation began, with users now set to receive compensation in crypto instead of fiat currency. In early August, lawyers representing a group of Mt Gox creditors issued an update confirming that repayments would be made in Bitcoin and Bitcoin Cash (BCH).

As a Cointelegraph analysis has outlined, roughly 24,000 creditors are thought to have been affected by Mt. Gox’s hack and subsequent collapse in early 2014, which resulted in the loss of 850,00 BTC valued at roughly $460 million at the time. The incident remained the most infamous and titanic scandal in industry history until this year’s $534 million Coincheck hack.

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Huobi Buys Majority Stake in Japanese-licensed Crypto Exchange BitTrade

Huobi’s subsidiary in Japan now owns a major percent of shares in Japanese BitTrade — one of only 16 regulated crypto exchanges in the country.

Huobi Global’s wholly owned subsidiary, Huobi Japan Holding Ltd, has recently acquired a majority stake in Japan’s BitTrade — one of only 16 regulated crypto exchanges in the country, Cointelegraph Japan reports Wednesday, September 12.

As Cointelegraph has learned, Huobi Japan will get 100 percent of the shares from True Joyful Limited, BVI, which holds holds all of the beneficiary interest in the company.  FXTF Asset Investment Private Ltd. reportedly had 75 percent of the shares, with FX Trade Financial with 25 percent.

BitTrade acquisition breakdown

Haiteng Chen, the acting president of Huobi Japan, was named as a chairman of BitTrade while Chris Lee, who left his roles as CEO of OKEx and CFO of parent operator OkCoin in May to join the Huobi team, was appointed as its independent director. Huo Li, Huobi Capital Inc. CEO, will take on the role of an outside director as well.

Both Huobi and BitTrade officials are determined to develop the platform to expand its global reach. According to a press-release published by Business Insider, Huobi Japan will “aggressively scale up the platform” to provide more professional and user-friendly services.

Lee, new BitTrade director, CEO for Huobi Japan Holdings, and CFO for Huobi Universal Inc., further clarified the goals of BitTrade’s coming strategy. As cited by Business Insider, Lee said:

“Looking ahead, we will leverage on Mr. Cheng’s international network and passion for blockchain technology as we continue to expand geographically […] Leveraging on BitTrade’s leadership team and its Japanese government-approved license, this is just the beginning as we look to grow BitTrade into the most dominant player in the Japanese cryptocurrency market.”

Huobi is one of the world’s largest crypto exchanges, ranked the fourth largest in the world by daily trade volumes, seeing around $573.2 million in trades over the 24 hours before press time. The company has accumulated over US $1 trillion since it was founded back in 2013, and has teams in Singapore, Korea, Hong Kong, Australia, the UAE, Luxembourg, along with other locations.

BitTrade is one of only 16 regulated and Japanese government-approved crypto currency trading platforms and also the only one fully acquired by international investor — Singaporean multi-millionaire and entrepreneur Eric Cheng. As Cointelegraph reported earlier, the company received its license in Japan in June 2018.

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Uber’s Largest Shareholder to Launch Cross-Carrier Mobile Payments Service Based on Blockchain and RCS

SoftBank will enable global users to conduct international money transfers via RCS, SMS, or mobile email with a blockchain payment system.

Japanese tech giant SoftBank is developing a blockchain-powered cross-carrier mobile payments service, the company reported in an official press release published September 12.

SoftBank’s new proof-of-concept (PoC) development was announced in partnership with telecoms-focused blockchain firm TBCASoft and Synchronoss Technologies, provider of cloud, messaging, digital, and Internet of Things (IoT) services and platforms.

The upcoming mobile payment service will be based on the Rich Communication Services (RCS) global messaging standard and TBCASoft’s cross-carrier blockchain platform. The service will will enable users to conduct peer-to-peer money transfers globally, as well as to carry out internal purchases directly from their device via the RCS wallet application or a legacy messaging service like SMS or email.

According to the statement, Uber’s largest shareholder SoftBank teamed up with TBCASoft in order to develop a cross-carrier blockchain platform Cross-Carrier Payment Service (CCPS), which aims to boost mobile payment services among global telecoms carriers. In turn, Synchronoss has provided a multi-channel communications platform that combines text messages (SMS), email, and RCS. The platform was launched earlier in 2018, the statement says.

Softbank’s vice president Takeshi Fukuizumi noted that the upcoming cross-carrier payment service will allow merchants to operate “at a scale that was previously only available to big brands.”

According to Synchronoss CEO and president Glenn Lurie, the upcoming blockchain-powered RCS mobile service will “disrupt the current messaging and payments market,” stating that SoftBank is “at the forefront in bringing to market new cutting edge technology.”

On August 10, Cointelegraph reported that blockchain startup Zulu Republic has launched a platform for Litecoin (LTC) transactions via encrypted messenger Telegram, also planning to introduce LTC transactions via SMS to support users with poor Internet connection.

Earlier in August, U.S. software firm Intuit was granted a patent for processing Bitcoin (BTC) payments via SMS. The patent was reportedly filed in the same year that Intuit’s DIY tax solution QuickBooks partnered with BitPay to enable business clients to pay their invoices in Bitcoin.

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DRAM Sales Decline Amidst Crypto Market Stutter

Sales of DRAM chips in Japan and the rest of the world have declined. The lull in cryptocurrency prices and the decline in smartphone sales are likely responsible for the decrease in sales. Lower Prices Cool Crypto Enthusiasm According to a recent Morgan Stanley report, the decline in cryptocurrency prices has negatively impacted the semiconductor market. With crypto prices falling, miners can end up operating at a loss. Morgan Stanley previously stated that Bitcoin mining

The post DRAM Sales Decline Amidst Crypto Market Stutter appeared first on Bitcoinist.com.

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Post-Hack, Coincheck Reveals Plans to Expand to U.S. Market

Monex Inc, parent company of Japanese crypto exchange Coincheck, has revealed plans to expand the crypto exchange to U.S. markets.

Monex Inc, the company that recently acquired hacked Japanese crypto exchange Coincheck, has revealed plans to expand the exchange to the U.S. in an interview with Bloomberg today, May 18.

Monex CEO Oki Matsumoto said he expects Coincheck will receive an official license from Japanese authorities next month, but – without specifying a timeframe – he revealed the company now has its sights beyond Asia:

“Japan may seem like it’s one step ahead in crypto, but in terms of deciding what’s a security or a token and attracting institutional investors, the U.S. and Europe are moving ahead.”

Japan has long been at the vanguard of crypto adoption – the country was the first to recognize Bitcoin as a form of legal tender back in 2016 – but Matsumoto considers that the U.S. and Europe have now taken the edge in terms of crypto-specific regulatory momentum. He compared Japan’s hefty 55 percent levy tax on crypto with France’s recent initiative to tax crypto at a favorable capital gains rate of 19 percent, telling Bloomberg that:

“At [Japan’s] level, it’s hard to even think of crypto as something you’d put in your portfolio. That means it’ll just remain a plaything for speculators.”

More crucially still, the CEO argued that U.S. federal regulators now wield the biggest influence on deciding the future status of crypto in the world economy, referring to the ongoing debate as to whether digital assets should be regulated as securities or commodities. An eventual decision would provide much-needed clarity for the emerging industry, and ultimately foster growth and institutional investor confidence, he told Bloomberg.

Monex’s decision to target overseas markets is the latest in a series of upheavals in Coincheck’s checkered history since its unprecedented $532 mln hack in Jan. 2018. Coincheck was subsequently acquired by Monex in April, with the latter’s shares surging 98 percent since the acquisition, according to Bloomberg.

Recent figures released by Monex showed that notwithstanding the mammoth post-hack writedown that Coincheck issued as a refund to affected customers, the exchange still closed the fiscal year in the green, netting ¥6.3 bln (about $56.7 mln) revenue on sales of ¥62.6 bln.

Earlier this month, Japan’s Financial Services Agency (FSA), laid out yet further stipulations for the already stringent regulatory measures that have been imposed on the country’s crypto exchanges. An FSA source nonetheless judged that the crypto regulatory process in Japan has been unfolding “without the necessary know-how – we been feeling our way through the dark.”

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Subsidiary of Korean Search Giant Naver Launches Blockchain Venture For Decentralized Apps

Line Plus has announced a partnership with crypto, blockchain platform ICON to develop dApps and Line’s blockchain mainnet.

Line Plus, the mobile platform subsidiary of Japan’s most popular messaging app Line, has launched a joint blockchain initiative – Unchain – with crypto platform ICON, Cointelegraph Japan reports today, May 16.

In the beginning of April, Line Plus had also released its blockchain affiliate Unblock in South Korea, in order to integrate blockchain tech into Line’s cross-market system. Line is itself a subsidiary of South Korean search engine giant Naver, but is based in Tokyo to avoid competition from Kakao.

Line’s press release notes that Unchain will work with Unblock to bring Line’s blockchain mainnet and its DApps closer together by using ICON’s blockchain technology. ICON’s Hong-kyu Lee, who will be Unchain’s CEO, said in in the press release that they “expect to promote an array of blockchain-based dApp services for daily use”:

“The rise of these services is expected to catalyze the growth of LINE and the ICON blockchain ecosystem.”

ICON is currently ranked 19th on Coinmarketcap, trading for around $3.87 and down about 10 percent by press time.

At the end of March, Line competitor Kakao officially announced their own blockchain subsidiary as part of their Kakao 3.0 business plan.

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Japan: Nomura Bank Announces Crypto Custody Solution For Institutional Investors

Japan-based global investment bank Nomura has announced a joint venture to establish a custody offering for digital assets.

Japan-based global investment bank Nomura has announced a venture to establish a custody offering for digital assets, Cointelegraph Japan reports today, May 16. The new project aims at removing barriers to institutional investment in the crypto space.

Nomura’s joint venture will be conducted in partnership with digital asset security company Ledger and investment house Global Advisors, according to reports.

The partners allege that a shortage of robust and legally regulated “safekeeping solutions” is currently preventing traditional asset managers from building investment vehicles in the crypto ecosystem, emphasizing that overcoming custody and security obstacles is crucial given that “one in five finance firms are [allegedly] considering launching digital asset trading and investment businesses in the coming year.”

The new digital asset custody venture is dubbed “Komainu,” and will provide infrastructure and an operational framework for institutional investors to integrate their traditional investment vehicles into the “frontier” crypto industry.

Just yesterday, major US crypto wallet provider and exchange service Coinbase announced its own custodian solution to address security and regulatory compliance concerns, with Coinbase VP Adam White saying that the product could “unlock $10 bln of institutional investor money sitting on the sideline.”

Earlier this month, New York Stock Exchange owner ICE revealed its own plans to offer crypto swap contracts that would be settled in BTC, suggesting it too has come up with an SEC-compliant custody solution for institutional holders.

The narrative that custody and regulatory obstacles are the last remaining obstacle for the crypto market to “mature” and draw major institutional investment is widely shared, and led CNBC’s Robert Kelly to suggest recently that cryptocurrencies now “look to be becoming an emergent asset class,” with custody solutions a significant milestone that could soon herald widespread crypto adoption in the traditional financial sector.

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World’s Fifth Largest Bank To Trial Own Cryptocurrency In 2019, Report Says

Mitsubishi UFJ Financial Group is planning a 100,000-user trial of its new cryptocurrency, local sources report.

The banking unit of Japan’s Mitsubishi UFJ Financial Group (MUFG) plans to trial its own cryptocurrency as early as 2019, Cointelegraph Japan reports today, May 15.

Cointelegraph Japan quotes local news media outlet NHK saying that a test phase of the cryptocurrency, known as MUFG Coin, could involve around 100,000 account holders.

Currently the fifth largest bank in the world by assets, MUFG originally signalled its intention to launch a token in January this year, in so doing becoming the first Japanese bank to issue one. Plans for the move stretch back further to 2016, Cointelegraph reported at the time.

MUFG Coin is designed to offer currency functionality first and foremost, with test customers to download an app that will automatically convert their deposits. According to NHK’s report, one MUFG will be equal in value to one yen.

According to NHK, users “will be able to use the currency to make payments at places like restaurants, convenience stores and other shops,” as well as “transfer the currency to the accounts of other participants.”

The bank joins a steadily increasing swathe of major Japanese entities preparing inroads into the cryptocurrency industry. The exchange sector has dominated the headlines in 2018, with names such as DMM and Yahoo! at various stages of involvement.

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