Investors were able to briefly buy bitcoin for free at a Japanese cryptocurrency exchange after it suffered from a system glitch; however, none were able to profit from it.
Japanese digital currency exchanges are once again in the spotlight and not for the right reasons.
Zaif, a government-registered exchange run by Osaka-based Tech Bureau Corp, is reported to have let seven traders purchase bitcoin over a 20-minute period last week, reports Reuters. It’s reported that the error took place on the 16 February; however, once the exchange noticed the system glitch it voided the trades. One customer even attempted to transfer the free coins.
Zaif is one of 16 exchanges in Japan that are registered with the country’s government. However, given the hack at Coincheck, which resulted in the theft of $530 million worth of NEM at the end of January, this won’t do anything to enthuse confidence with regulators.
Following the hack, Japan’s Financial Services Agency (FSA) ordered Coincheck to submit a report on how the hack had happened and the measures it would put into place to avoid future hacks. The FSA also ordered all of the cryptocurrency exchanges in Japan to report on their safety measures and their hack preventive steps. The agency has since deemed it necessary for on-site inspections to be conducted at the 15 unlicensed exchanges.
Now, though, questions may be raised as to whether further checks should be conducted at registered exchanges as well.
According to Reuters, the registered cryptocurrency exchanges will form a self-regulatory body from April. It had previously been reported that two existing registering bodies would merge together to represent the licensed and unlicensed exchanges.
The self-regulatory body is expected to set guidelines focused on exchange advertising and security, in addition to penalties should members fail to comply with the rules.
The Coincheck hack raised concerns among regulators about Japan’s move to regulate the industry compared to the likes of China. This latest issue won’t do anything to stem those feelings.