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Zaif Exchange Hack in Japan Provokes Security Caution From NEM

Zaif Exchange Hack in Japan Provokes Security Caution From NEM

While the Japanese cryptocurrency exchange Zaif faces backlash following a Sept. 14 hack, the Foundation, known for the NEM blockchain platform and XEM token, has reassured its asset holders that it remains unaffected.

Nem Suspends Zaif Withdrawals

During the hack, holdings in Bitcoin (BTC), Bitcoin Cash (BCH) and MonaCoin (MONA) were subject to stolen funds. The security rupture resulted in a theft of 6.7 billion yen ($60 million USD), requiring the trading company to terminate its deposit and withdrawal platforms until a comprehensive investigation is performed.

In a statement, the company said it is pursuing the hack as a criminal case in cooperation with the Financial Services Agency, investigation authorities and the communications software company Kaichi Corporation.

Abnormalities within the server were detected Sept. 14 and confirmed the following day when a report was filed with the Treasury Department.

Representatives for Zaif said:

“Currently, we are checking and strengthening security, rebuilding the server, etc., in order to restart the system of depositing/withdrawing virtual currency. We are committed to restoration as soon as possible, so please wait for a while. Moreover, I sincerely apologize for any inconveniences that may arise.”

NEM Foundation spokesperson Alexandra Tinsman urged cryptocurrency companies within its community to operate only the proper security measures established, including “multi-factor” authentication and hardware wallets. She added that all withdrawals sought from Zaif have been suspended in light of the investigation.

Related: Introduction to NEM (XEM): The Proof-of-Importance Coin

Registered in Singapore, the NEM blockchain platform is designed for enterprises built on an EigenTrust algorithm, a reputation system for peer-to-peer networks. Because this market allows trade without third-party interruption, NEM practices multi-signature account contracts, encrypted messaging and customizable assets.

For clients operating outdated legacy systems are able to “plug ‘n’ play” blockchain miners into their exchanges. NEM commissions a more mindful approach that deters serial miners by giving users POI tools to dictate who accesses their block for mining. Foundation President Lon Wong said each crypto-community is only as strong as its weakest link, reiterating the recent hack as a cautionary tale, and one which he hopes can be demonstrated as a learning lesson. He stated:

“Come rain or shine, we continue to work on building on the strength of the NEM blockchain, and it can only keep going stronger. The XEM trading exchange has had a wake-up call to double-check security measures and deploy all necessary security mechanisms moving forward. Together, we can continue to create a robust ecosystem for the future.”

Cover Photo by Ismael Abelleira on Unsplash

Posted In: , , Altcoins, Crypto Exchanges, Hacks

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Trevor Ballanger

Trevor Ballanger is a freelance journalist based in Chicago. He graduated from Columbia College with his bachelors degree in journalism in 2018. He is self-educated and well-versed in legitimate entertainment news. As a visual thinker, he utilizes creativity as a basis for inspiring curiosity and integrity within his writing.

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