◇ Massive Leakage of Cryptocurrencies Occurs Again

■ Massive Leakage of Cryptocurrencies Occurs Again
On July 12,  cryptocurrency exchange service provider BITPoint Japan Co. Ltd. (BPJ) had to cease providing all of its services to conduct urgent maintenance due to leakage of JPY 3.5 billion worth of cryptocurrencies. Just last year, in the cryptocurrency industry, Coincheck experienced coin leakage of JPY 58 billion. This time the leakage amount is not as huge as the case of Coincheck, however, not only did it make users think “not again!” making them worried, but it also caused the FSA which has been giving administrative guidance to thoroughly improve security to lose face. The FSA is most likely furious. Furthermore, the cryptocurrencies which leaked out this time were stored and managed by BPJ on-line, and the incident has again exposed the weakness of the current network. Another recent financial incident on the network is the illegal login of “7 pay” where JPY 55 million of damages were incurred. Since the release of “7 pay” on July 1, registered users rushed to use “7 pay” (1.5 million registered users) and difficulty in access continued, and meanwhile, a third-party user who hacked the login IDs and passwords were able to charge the hacked accounts and use them for payment at Seven Eleven stores. As a result, around 900 people suffered damages due to illegal access. Almost all of the illegal access was from overseas IP, and it took time to cut-off the transmissions from overseas, resulting in delay in dealing with the situation. Maybe there is a problem in the procedures for re-setting passwords in the first place. If a third party knows the date of birth, telephone number, and member ID (i.e. e-mail address) of a user, as the URL screen for re-setting the password can be sent to the e-mail address of the third party, which is obviously weak from a security standpoint, and for example a two-step certification should first be considered. In order to deal with the weaknesses of blockchain and networks and to resolve this type of situation, it is urgently necessary to spread various technologies such as “Crypto Cash” and “Complete Cypher” which is expected to be adopted by “Liberty Ecosystem” which issues the cryptocurrency “Liberty” coins. “Crypto Cash” is a card-less service which transfers cryptocurrencies to cash. For example, it will make it possible to take out crypto-assets directly from ATM machines, send cryptocurrencies to bank accounts, and even charge one’s credit cards with crypto-assets. As a matter of fact, the cryptocurrencies which leaked out from BPJ were administered in hot wallets on-line, however, there have been no confirmed incidents where cryptocurrencies or legal currencies administered in cold wallets segregated from the internet have leaked out. In other words, third parties are not able to get their hands on assets which have been completely encrypted without having to once decode, and the “Crypto Cash” and “Complete Cypher” which is expected to be adopted by the “Liberty Ecosystem” will provide the best service and comfort to users, and at the same time, respond fully to the expectations of the FSA which supervises crypto currencies.