Glitch hands traders illicit Bitcoin windfall

Posted: 21 February 2018 12:26 pm
Japanese Yen and bitcoin small

Digital exchange Zaif discovered the systems error quickly and reversed all illicit transactions.

A price calculation error at a Japanese cryptocurrency exchange late last week allowed a few traders to buy bitcoin at a value of zero yen. However, all illegitimate transactions were reversed soon after.

On the afternoon of February 16, 2018, government-registered crypto exchange Zaif suffered a systems “problem” on its “simple trading” service for 20 minutes, in which seven users bought bitcoin for free.

In an online apology, Zaif revealed that some of the users that made the illicit bitcoin purchases attempted to sell the coins, which drew attention when abnormal figures appeared on the exchange’s transaction board.

Zaif said that it responded immediately to the system malfunction and affected user balances were corrected. The exchange reports that all systems have returned to normal operations. However, the exchange is carrying out “ongoing support” with one of the seven users who bought bitcoin for zero yen.

“We apologize for any inconvenience and inconvenience caused to you by our customers,” Zaif said. “We will strive to prevent recurrence and we will continue to work on improving our services.”

Zaif is one of 16 digital exchanges registered with the Japanese government.

Japanese exchange Coincheck, whose registration is still pending, fell victim to an enormous heist in January. Hackers made away with more than US$400 million in NEM tokens, stolen from users’ digital wallets.

The Coincheck hack exceeds the value of the US$390 million theft that caused the collapse of leading Japanese bitcoin exchange Mt. Gox in February 2014. Since then Japan has tightened its crypto regulations. From April 2017, crypto exchanges must register with the Financial Services Agency (FSA) and manage user accounts separately from the exchange operator’s own funds. Coincheck applied to register but remains under review.

Japanese exchange bitFlyer was recently issued a Payment Institution (PI) license to operate in the European Union. The exchange is the only approved platform allowing trade with bitcoin’s largest trading market, Japan.

You can learn all about different exchanges, understand exactly how to buy and sell cryptocurrencies, calculate your taxes, discover digital wallets to hold assets and explore a list of all the alternative coins on the market.

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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