Japan Crypto Monthly News by Hero’s Studio #5 – Hero’s Studio
Hero’s Studio is a marketing agency for Crypto/Blockchain businesses. We provide a wide range of marketing solutions, especially for overseas businesses looking to conduct marketing campaigns targeted to Japanese users.
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Despite the positive developments in the crypto space with the recovery in Bitcoin’s price over the past three months, another cryptocurrency exchange in Japan was hacked, sending shockwaves through the industry. BITPoint, a licensed Japanese exchange, has suffered a major hack, losing 3.5 billion Yen (~US28 million) worth of crypto assets from its hot wallet. The company has promised to fully reimburse users who have lost funds. Users will be reimbursed in cryptocurrency on a 1:1 basis.
・An Overview of the Incident
According to the press release from Remixpoint, Inc., the hackers have stolen US28 million worth of cryptocurrencies including Bitcoin, Bitcoin Cash, Ethereum, Litecoin, and Ripple.
Remixpoint, Inc. is the parent company of the BITPoint Exchange. It engages in the system sales and development business, and it operates through the following segments: Energy, Automobile, Finance, and Travel.
The breach was first identified by BITPoint on July 11th at 10:12 p.m. The system detected unusual activity in Ripple remittances, which alerting internal members. At 22:39, the data breach was confirmed and BITPoint immediately responded to the attacks by suspending all services including withdrawal, deposit, and trading.
Here is a brief timeline of the incident:
The investigation report from Remixpoint indicated that the hackers breached wallet servers and compromised the private keys for every hot wallet. The damage has also affected its affiliated companies of BITPoint abroad that uses the same trading system.
Hackers have stolen US$2.3 million of crypto assets from international users according to the report, damaging the companies’ reputation and led to the suspensions of the services.
・Compensation Policy
In the press conference, BITPoint disclosed that roughly 50,000 members (out of 110,000) have lost their funds in its recent hack. Although, the company has already prepared the exact amount of crypto assets that was stolen for its reimbursement action. The company has promised to fully refund the users in cryptocurrency on a 1:1 basis.
Under the current taxation system in Japan, the reimbursement in fiat currency may raise a legal concern for the users. Paying out in cash could be considered a realized profit that is subject to taxation.
While the hackers have caused billions of Yen in damage, BITPoint has announced that roughly 3 billion Yen in cash reserves will be retained after the reimbursements and that it has no effect on the continuation of its exchange business.
・Service Resumption
A month after the incident, BITPoint is still working on restoring normal operations as soon as possible. Based on the announcements on the website, some services — deposit/withdrawal for fiat currency, margin trading, and spot trading — have already resumed:
This is the fourth case of a licensed Japanese crypto exchange being hacked.
❒ Mt.GOX (2014) — US$475 billion
❒ Coincheck (2018) — US$550 billion
❒ Zaif (2018) — US$66 billion
❒ BITPoint (2019) — US$28 billion
Published at Thu, 15 Aug 2019 05:58:22 +0000
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