Zaif cryptocurrency exchange responds to business improvement order from Japan’s FSA

Following the recent $62 million hack suffered by Zaif cryptocurrency exchange, Japan’s Financial Services Agency (FSA) has issued the third business improvement order to Tech Bureau, the operator of Zaif, Reuters reported.

In an official statement, the regulator said that Tech Bureau has failed to provide the details on the latest hack. The FSA ordered the company to provide details on how the hack occurred and how it plans to compensate clients.

“We have not received enough explanation on what exactly happened. What they told us is an employee’s PC was hacked,” a senior FSA official said, adding that further action could be taken against the company if needed.

“It is extremely regrettable that such an incident happened when (Tech Bureau) was given two business improvement orders,” the official said.

Zaif Responds

In response to the business improvement order, Zaif has issued an official statement on September 25.

Referring to its initial press release issued after the hack, Zaif reiterated its agreement with Fisco Digital Asset Group, a group company of Japan-listed firm Fiscal, to receive a ¥5 billion (or $44.5 million) investment in exchange for a major share of ownership.

“We have concluded a basic agreement for considering capital alliance etc. On the premise that the offer will be executed at the end of this month, we are currently pushing forward with preparations and negotiations with full power. In addition, we will procure the lost virtual currency by the funds provided, and we will take full responses so as not to damage the customer's assets,” it said (loosely translated).

The FSA made efforts to increase oversight of domestic cryptocurrency exchanges following the major hack at Coincheck earlier this year. According to the latest reports, it has upgraded its screening process for crypto exchanges. The FSA would not stop the screening process of new entrants in the wake of the Tech Bureau incident, the official said.