Bitcoin firm hacked

A cryptocurrency exchange in Tokyo has halted services after it lost $32m (£25m) in the latest apparent hack on volatile virtual monies.

Remixpoint, which runs the Bitpoint Japan exchange, discovered that about ¥3.5bn in various digital currencies had gone missing from under its management.

The apparent hack emerged after an error appeared in the firm’s outgoing funds transfer system on Thursday night. It said the cryptocurrency went missing from a so-called hot wallet, which is connected to the internet, but that currency held in cold wallets that are offline was not affected.

The exchange handles various virtual currencies, including bitcoin, ethereum and ripple. Remixpoint said it was analysing the loss and gave no further details on the incident.

This is the latest hack involving cryptocurrencies, which have become synonymous with vast fluctuations in value, being used in criminality and frequent theft through hacks.

Last year, Japan’s Coincheck was hacked and more than $500m-worth of digital currency stolen. In 2017 the South Korean exchange Youbit shut down and filed for bankruptcy after being hacked twice. The Tokyo-based MtGox exchange, which at one time handled almost 80% of all global bitcoin transactions, was shut down in 2014 after 850,000 bitcoins (worth half a billion US dollars at the time) disappeared from its virtual vaults.

The Financial Conduct Authority has proposed a ban on financial instruments linked to cryptocurrencies such as bitcoin, warning that such products could cause huge losses for retail consumers unlikely to understand their risks or value.

Remixpoint said it would compensate customers for the losses. About ¥2.5bn-worth of the missing currency was customer funds, with the rest owned by the firm. Shares in Remixpoint plunged almost 20% after the announcement.

Japan has been relatively open to cryptocurrencies, which use a technology called blockchain, despite the high-profile heists. It has set up a licensing system to oversee their use.

Bitcoin has been a legal form of payment in Japan since April 2017.