Zaif Exchange Let Users Buy Bitcoins For Free
A temporary glitch in Zaif, a government-registered Japanese cryptocurrency exchange, allowed customers to buy Bitcoins for free. However, nobody was able to take advantage of this mishap. Zaif, which is owned and operated by Japan’s financial information service Tech Bureau Corp, stated on Tuesday that seven users were able to buy Bitcoin that had no Japanese Yen value (JPY). This occurred within a 20-minute timeframe last week, but the exchange was quickly able to void the transactions when it became aware of the technical fault. However, it is still working on settling the issue with one particular investor.
Japan’s regulatory authorities have been increasingly cracking down on cryptocurrency exchanges due to malicious hacks. Notably, last month, the country’s Coincheck crypto-exchange was hacked , and $534 million worth of digital currency was reported stolen. Now, regulators have been investigating not only the security measures that Coincheck has in place, but also the overall security of other local exchanges, which also happens to include Zaif.
Crypto-Exchanges Operated While Registration Was Pending
Although this particular incident, which can be attributed to a system glitch, might not have been nearly as damaging, it could still be a matter of concern for the nation’s financial watchdog. Primarily due to the Coincheck hack, Japan’s overall monitoring of its digital asset exchanges has been called into question. Moreover, crypto-exchanges had been allowed to operate even though their registration process was still in pending status. It is only fairly recently that Zaif and 15 other crypto-exchanges became fully registered business entities.
According to recent reports, these sixteen registered exchanges will establish a self-regulatory framework by April, 2018. Initially, the plan was to bring together two existing entities that had been overseeing both the country’s registered and unregistered crypto-exchanges. Now, the decision has been taken to develop new guidelines to ensure that adequate security measures are in place, and that all related advertisements are following set rules. Failure to abide by these policies will result in penalties, as noted by Nikkei Asian Review.
Japan Was First To Launch Crypto-Exchange Oversight System
Despite the serious problems that Japan’s crypto-exchanges have been experiencing, it was still the first country to launch a regulatory system intended to ensure consumer safety. As part of this effort, authorities also attempted to crack down on illicit activities involving cryptocurrencies. The objective of the government-led oversight system was to stop criminal elements from abusing Japan’s crypto-market, while also making sure not to hamper the growth of this promising new sector of their economy.
Compared to the very strict crypto-regulations laid down by certain countries, Japan has chosen to take a more balanced approach. This is intended to help provide its crypto-related startups with an environment conducive to their growth.
The glitch experienced by customers of the Zaif exchange probably has nothing to with any illegal or malicious activity. However, it’s a strong indication that crypto-related platforms and technologies must be improved. Therefore, as regulators work to prevent the unlawful use of cryptocurrencies, the developers of this emerging new technology should continue to focus on enhancing its usability and accessibility.