Zaif Suspends New Registration After $60 Million Loss

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Zaif

Zaif Exchange has discontinued new registrations after suffering a major security breach. A hacking incident last month resulted in more than $60 million in damages. Tech Bureau, which is the parent company, says it will resume registration upon finding a way of compensating affected persons.

?Zaif Compensation Plans

The company has already reached out to Fisco, an investment company based in Japan. Tech Bureau hopes to secure a $44 billion bailout that will allow it to settle the damages caused by the hacking incident. Suspension of new registration will not in any way affect existing customers.

Zaif is one of the smallest cryptocurrency exchange in the world, ranked at about 108th when it comes to daily volume. Hackers reportedly remitted stolen funds from the exchange to offshore exchanges. The fact that recipient wallets had not undergone KYC/AML guidelines means it will be tough to recover the stolen funds from Zaif.

?After concluding the basic agreement, we are advancing consultation and negotiations for concluding a formal contract, there is no change in the policy to ensure thorough compensation for customer assets, and we are continuing to consider the details of specific response,? Tech Bureau in a statement.

Regulatory Pressure

Even as the company moves to settle the damages, regulatory pressure is another hurdle it will have to bypass. Japan Financial Services Agency has already started looking into the exchange security practices. The agency is focusing on the cryptocurrency exchange protection system.

Early in the year, the FSA ramped up scrutiny of exchanges, following a hacking incidence at Coincheck. Consequently, the watchdog orders all entities handling crypto products to ramp up security measures. Despite the crackdown, exchanges have remained as a vulnerable as ever.

In the aftermath of the Coincheck?s $509 million hack incidence, more than 160 cryptocurrency thefts have taken place. The hack incidence has led to the loss of more than $532 million. Massive thefts to receive a lot of attention even though smaller hacks take place on a daily basis.

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