Japanese cryptocurrency exchange briefly trips up trade

Asian Stock Markets

A Japanese cryptocurrency exchange undergoing checks by regulators has said a system failure let investors briefly trade a digital currency for zero yen, highlighting security concerns about such assets after last month’s cyber heist at Coincheck Inc.

Zaif, an exchange run by Osaka-based Tech Bureau Corp, said on Tuesday a problem in its price calculation system allowed seven customers to trade a cryptocurrency with no yen value for around 20 minutes on Feb. 16. 

It was unclear if the customers realised they were trading the digital asset for zero yen, or were somehow blindsided for a brief moment. 

The exchange said it had corrected the customers’ balances to account for any trades of the cryptocurrency made at zero yen. It added that it had resolved the issue with six of the customers and was still doing so with the remaining one. 

Zaif did not give further details, or identify the cryptocurrency affected by the system error. Tech Bureau officials were not immediately available for further comment. 

The incident comes after hackers stole $530 million in digital money from Coincheck last month, sparking checks by regulators of Japan’s other exchange operators, including Tech Bureau. 

The Financial Services Agency launched on-site checks at Tech Bureau because it saw the exchange as potentially vulnerable to cyber-attacks, a person with direct knowledge of the matter told Reuters on Feb. 9. 

Japan last year rolled out the world’s first system to oversee cryptocurrency exchanges, in a bid to protect customers, stamp out illegal uses of cryptocurrencies as it sought to nurture a young and promising sector. 

Zaif is one of 16 cryptocurrency exchanges registered with the government. Regulators have allowed a further 16, including Coincheck, to continue operating pending full registration.