Massive crypto thefts in Japan prompt tighter rules on asset holdings

This year alone, nearly $600 million in cryptocurrencies has been stolen from two crypto exchanges, prompting a self-regulatory body to put a limit on the amount of customers' assets that can be held online

The self-regulatory Japan Virtual Exchange Association has announced new, tighter measures on the management of customer assets in a bid to reduce the vulnerability of crypto exchanges to hackers.

These include setting a ceiling on the amount of cryptocurrency that exchanges manage online, the Japan Times reports. The cap is reportedly going to be around 10 to 20% of customers’ deposits.

FSA certification

Sources from the association say the new rules, which were drawn up in July, will be implemented once the country’s Financial Services Agency certifies them. The push for tighter regulations come after a couple of hacks against cryptocurrency exchanges in Japan.

Under attack

The most recent cyber attack was carried out mid-September against Zaif. The licenced crypto exchange lost to hackers about $60 million in crypto, including nearly 6,000 Bitcoins.

In January, meanwhile, Coincheck, was hacked and robbed of over $520 million in NEM (New Economy Movement) tokens.

In both cases, the assets stolen were being managed online. Crypto exchanges usually hold large portions of their customers’ cryptocurrencies offline for security reasons. However, some portions are kept online so that they can be readily accessed for transactions.

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