A Japanese cryptocurrency exchange, which is being probed by regulators over security concerns, said it allowed trades for zero yen or free, due to a glitch in its price calculating system.
Zaif, a cryptocurrency exchange run by the Osaka-based Tech Bureau Corp, is among the 16 registered exchanges with the Financial Services Authority.
Japanese cryptocurrency exchanges are under the scanner after the massive theft at Coincheck, which is unregistered, in January. The exchange lost $530 million in digital money when hackers stole NEM coins from its wallet.
The incident at Zaif occurred on February 16 and lasted for nearly 20 minutes from 17:40 to 17: 58 local time.
In an apology statement on its website, Zaif said a problem in its price calculation system led to the situation in simple trading where one could buy and sell a virtual currency at zero yen, or no fee.
“An abnormal value was displayed on BTC/JPY transaction board,” Zaif said, “…because the virtual currency purchased by some customers at zero yen were issued for sale, the exchange said.
The exchange did not disclose the volume of trades. Seven customers purchased the virtual currency at zero yen, Zaif said.
Remedial measures were taken immediately and the system is operating normally now, the exchange said. Customers’ balance data have been corrected, it added.
Zaif also said that it corresponded with six of the seven clients involved, while support is ongoing for the remaining one and there will be no impact on other customers.
One of the users purchased Bitcoin worth 2,200 trillion yen or $20 trillion and attempted to cash in on it, the Asahi Shimbun newspaper reported on its website.
Japan is among the first countries in the world to implement a registration system for cryptocurrency exchanges.
The government had implemented a rule in April 2017 that required cryptocurrency exchanges to register with the government. While there are 16 registered as of now, roughly the same number is waiting for approval.
Following the Coincheck hack in January, the FSA reportedly asked cryptocurrency exchanges to report on systems including asset management, corporate governance and security. Authorities also raided several exchanges.
The registered cryptocurrency exchanges are set to establish a self-regulatory body in April to win back public trust, Reuters reported.
The proposed watchdog would be independent of the two cryptocurrency industry groups – the Japan Blockchain Association and the Japan Cryptocurrency Business Association, the Nikkei said.