Bitpoint, a cryptocurrency exchange in Japan that lost $32 million in a recent hack, has now managed to locate $2.3 million of the total sum stolen.
The hack, which occurred on July 12, could have been a one-off occurrence since Bitpoint found that the stolen cryptocurrencies had been used in international exchanges that were using its own trading system.
The exchange has announced that customers affected by the theft will be reimbursed in cryptocurrencies.
Security Breach Leads to $32 Million Stolen
The amount stolen on the July 12 incident stood at $32 million. Of that figure, approximately $2.3 million belonged to customers and $9 million belonged to the exchange.
Interestingly, Bitpoint had recently received a warning from the Japanese regulation body, the Financial Services Agency (or FSA), that the digital exchange did not have the proper systems in place to clearly distinguish the funds that are held on behalf of the customers and those of the exchange itself.
After Bitpoint’s recovery of $2.3 million, the amount lost now stands adjusted to around $28 million. In terms of the currency basket, the theft included Bitcoin, Ethereum, Litecoin and XRP (Ripple).
Exchange Shuts Down Operations
Bitpoint was made aware of the hack and subsequently stopped all activities on the exchange. There was an immediate backlash with the exchange’s parent company, Remixpoint Inc., losing heavily in the stock market. Soon after, Remixpoint released a statement [PDF] notifying users of the issue.
As mentioned, the FSA took a close look at Bitpoint in a recent review of its business practices. Some of the agency’s concerns reportedly included the way the exchange functioned with respect to know your customer (KYC) compliance and anti-money laundering regulations.
The FSA ordered Bitpoint to improve its business. Just months after that, this hack occurs and the Bitpoint cryptocurrency exchange finds itself in a tough spot.
Other Similar Hacks Targeting Crypto Exchanges
Bitpoint is not the first cryptocurrency exchange in Japan to get hacked recently. In fact, this event is only the latest in a series of cyberattacks facing Japan’s crypto industry.
Before Bipoint was hacked on July 12, there have been a couple of other cybersecurity incidents involving cryptocurrency exchanges in Japan. In each case, digital assets kept in customers’ crypto wallets have been stolen.
Coincheck was a cryptocurrency exchange that witnessed a major hack in early 2018 when a whopping $534 million worth of NEM tokens got wiped away in one clean sweep. Zaif, another crypto exchange, also lost $59 million to hackers in 2018. Both Japan and South Korea have taken to the crypto industry in a big way. This may be one reason why hacking incidents targeting Japanese and South Korean firms are reported more often. This recovery of $2.3 million out of the $32 million stolen is a rare incident. In most cases, hackers are untraceable to law enforcement and even cybersecurity investigators.