Local prosecutors in Japan have charged an 18-year old male with cryptocurrency theft. Per a report published in a local news outlet, the Metropolitan Police Department (MPD) of Japan are accusing the young adult of stealing 15 million Yen ($134,310) worth of stealing MonaCoin (MONA)—a Litecoin hard fork.
According to the report, this is the first time local authorities have charged a hacker for crypto theft in Japan. The young hacker is accused of breaching Monappy, an online wallet service used by crypto investors to store their digital assets last year.
The teenager reportedly took advantage of the website’s vulnerability, thanks to glitches related to access overloads. Primarily, he sent repeated transfers requests to himself over a short period and overwhelmed the system into overloading.
Once he overwhelmed the servers, his balance increased rapidly due to the consistency of his actions. On realizing that his account had been bumped up to the amount he desired, he transferred the cryptocurrency to a third party wallet service, exchanged them for popular cryptocurrencies like Bitcoin and cashed them into fiat.
The suspect was eventually arrested, and during his questioning, he was quoted saying, “I felt as if I’d found a secret trick and thought I would take out all of the MonaCoin.”
TOR: THE PERFECT TOOL FOR CRYPTO HACKERS
The Tor browser was developed as a security tool for the United States military for secure and confidential communication. It encrypts communicated content from its origin and routes it through multiple servers before sending to the appropriate destination.
Tor helps individuals protect their identity online, but for criminals, it can do so much more. Tor has become a popular tool used by hackers to steal cryptocurrencies. It’s such a hot property that some hackers build a Tor proxy website to steal ransomware crypto from other cybercriminals.
The hacker was able to gain access into Monappy’s system with the use of his smartphone and the Tor browser. According to the police report, the wallet’s operator realized on September 1 that its general balance of MonaCoin was drastically reducing. Fearing a security breach, the operator immediately launched an investigation into the matter.
Still, while the suspect was able to cover his tracks using the Tor software, Japanese law enforcement officials were able to effectively trace his actions thanks to data and communication records that he left on the wallet’s (Monappy’s) native servers. Over 7,000 users of the crypto wallet service were affected, but the platform has agreed to compensate them for their losses.
CRYPTO WALLETS NEED TO ADHERE TO STRONGER SECURITY MEASURES
The theft goes on to show the ease of breaching crypto firms in Japan, despite increased adoption of cryptocurrencies and robust regulatory framework. It also shows the need for stronger security measures and practices by digital asset platforms and wallet operators.
While this might be the first time a crypto wallet service is breached in Japan, crypto exchanges in the country have suffered many high profile hacks in the past. Coincheck lost over $530 million in NEM tokens last year. Following the hack, the exchange was acquired by an online brokerage firm Monex, reshuffled its management team and delisted privacy firms such as ZCash which prevents it from complying with Anti-Money Laundering regulations.