In the first of its kind case in Japan, an 18-year old boy has been referred to prosecutors on Thursday over stealing about 15 million yen worth of digital currency last year by hacking a cryptocurrency storage website. This has been the first time that criminal charges have been pursued against a hacker over crypto losses, said the police.
The boy whose name is withheld due to being a miner is from the city of Utsunomiya, Tochigi. He allegedly hacked, Monappy, one of the websites where the users can keep their digital currency Monacoin, and stole ¥15 Million worth of crypto last year between August 14 and September 1.
“I felt like I'd found a trick no one knows and did it as if I were playing a video game,”
the police quoted the boy admitting to the allegations.
The boy used software called Tor that makes it difficult to identify the person accessing the system. But the police identified him by analyzing the communication records found on the server of the website.
7,700 Users Affected
While knowing that the system would malfunction if the transfers were repeated over a period of time, he took advantage of a weakness on a website that basically enables a user to transfer the cryptocurrency to another user.
He made the cryptocurrency transfer requests to himself repeatedly that resulted in overwhelming the system and further allowing him to get more money in his account. The stolen Monacoins were then stored in an account set up by a different cryptocurrency operator.
On these stolen digital currencies, he received dividends in a different cryptocurrency and the police said, he further bought items like a smartphone headset from them.
This theft affected approximately 7,700 users and now the operator will be compensating them.
According to the operator of Monappy, the stolen Monacoins were kept under an always online while those kept offline weren’t stolen.
In recent years, Japan has seen some of the largest digital currency heists amidst the boom in the demand for these cryptocurrencies. Back in 2014, 48 billion yen worth of Bitcoin were stolen from the now-defunct cryptocurrency exchange MtGox. Today only, the creator of the exchange, Mark Karpeles has been found guilty of data manipulation charges by a Japanese court. The Tokyo District Court has suspended his sentence for four years.
Just last year in January, about 58 billion yen worth of NEM digital currency has been taken from Coincheck exchange. In response, the Financial Services Agency (FSA) that regulates cryptos in Japan, ordered six virtual currency exchange operators to improve their internal controls.