Bitpoint Crypto Exchange Loses $32 Million in Hacking Incident

Tokyo-based crypto exchange Bitpoint has suspended all its services after losing roughly $32 million USD (¥3.5 billion JPY) worth of crypto assets in a hacking incident last week.

Remixpoint Inc., the parent company of Bitpoint, announced Friday that it had halted all of Bitpoint’s transactions which include trading, sending, and receiving of all virtual currencies.

According to the announcement released by Remixpoint, the crypto exchange’s trading system has detected a suspicious virtual currency remittance error last July 11th. After further investigation, it was confirmed that there had been a fraudulent outflow of digital currency from the company’s hot wallet.

Hot wallets are online storages used by crypto companies which are connected to the Internet. They are them readily accessible to customers but are apparently vulnerable to breaches.

Remixpoint also confirmed that $23 million of the stolen crypto assets or two-thirds of the losses belong to Bitpoint’s customers. The remaining belongs to Remixpoint.

The unknown attackers were able to steal virtual coins in five different cryptocurrencies: Bitcoin, Bitcoin Cash, Litecoin, Ether, and Ripple.

Crypto Exchange Hacking Incidents

According to reports, Japan’s Financial Services Agency has already issued a reporting order to Bitpoint under the country’s Funds Settlement Act.

The news of Bitpoint’s hacking has caused an alarm among other cryptocurrency exchanges in the country. On Friday, the Japan Virtual Currency Exchange Association has asked its affiliate crypto exchange, Diaret, to conduct system inspection. The firm assured its customers that there was no fraudulent outflow on the virtual currencies they are currently managing.

This is not the first time that cybercriminals have targeted a Japanese crypto exchange.

Last year, one of Japan’s largest crypto exchanges, Coincheck, was also hit by cyber attackers. The incident resulted in a $520 million USD worth of crypto asset losses for Coincheck. Another Japanese exchange, Zaif, was also hacked for $60 million worth of virtual currencies May last year.

Aside from Japan, hackers have also targeted crypto exchanges based on South Korea, Singapore, Hong Kong, and some parts of Europe. Unfortunately, despite the security features allegedly implemented by crypto companies, there seems to be no way to stop hackers from infiltrating their hot wallets.

At the moment, the best protection some of the largest cryptocurrency exchanges offer their customers is insurance. These companies have back-up security teams monitoring their systems constantly and back-up reserves to ensure that customers won’t be affected in the event of a security breach.

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