Bug at Japanese Government-Approved Zaif Exchange Let Users Get Free Bitcoin

Bug at Japanese Government-Approved Exchange Zaif Let Users Get Free Bitcoin

Have you ever dreamed about buying bitcoin for only $1,000, $100 or even just $10? What about a round at $0? Some fast and sharp eyed customers of the Japanese exchange Zaif had this opportunity just last week thanks to a bug in the system. The company isn’t going to let them get away with it however.

Also Read: 66% of Funding to Stop the AI Apocalypse Comes from Crypto Donors

$20 Trillion Glitch

Bug at Japanese Government-Approved Exchange Zaif Let Users Get Free BitcoinZaif, a Japanese bitcoin exchange run by Tech Bureau Corp, has revealed that it had a brief system glitch which allowed clients to trade cryptocurrency for the very affordable price of 0 yen. The glitch, which affected Zaif’s price calculation system, lasted for 18 minutes from 5:40 p.m. to 5:58 p.m. local time on February 16.

The company announced on Tuesday that seven users obtained quantities of cryptocurrencies. One particularity ambitious trader apparently even tried buying bitcoin valued at 2,200 trillion yen (about $20 trillion USD) during the glitch and then quickly attempted to cash it out, according to a report by the second most popular national newspaper in Japan Asahi Shimbun.

The problem was reportedly fixed by 7:34 p.m. that same day. A Tech Bureau official also apologized to investors for the trouble and pledged to take measures to prevent further glitches.

Oops, No Deal!

Bug at Japanese Government-Approved Exchange Zaif Let Users Get Free BitcoinAfter the bug was discovered in the system and the colossal mistake was made clear, Tech Bureau subsequently invalidated the zero cost transactions and returned the users’ balances to their previous states on the platform. However, it was still trying to resolve the issue with one customer who tried to transfer the bitcoins out of the exchange, a company spokesman told Reuters.

Tech Bureau Corp. is now subject to a Financial Services Agency (FSA) investigation into the safety of the system and other business practices. Its Zaif platform is one of only sixteen exchanges that were already fully licensed to offer services in the country by the government and was one of the original eleven venues that the FSA first approved in September of last year. The regulator recently announced that it is inspecting 32 cryptocurrency exchanges, including 16 that have not yet obtained a license but are currently under review.

Should we expect bitcoin exchanges and wallets to be bug-free or are such glitches inevitable? Share your thoughts in the comments section below!


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Bad Code Has Lost $500 Million of Cryptocurrency in Under a Year

Bad Code Has Lost $500 Million of Cryptocurrency in Under a Year

Cryptocurrency can be lost in a variety of ways, from hacking to forgotten passwords and failed flash drives. But in dollar terms, one of the biggest causes of crypto losses is bad code, and it’s not usually the fault of the coin’s developers. Instead, third parties, including shoddy smart contract developers and shady exchanges, are to blame for losses that have reached half a billion dollars in the last seven months.

Also read: Cryptocurrency Exchange Bitgrail Suspends Operations After ‘Losing’ $170 Million of Nano

Bitgrail Gets Railed for Dodgy Code

Last week, news.Bitcoin.com reported on the demise of Bitgrail, which contrived to lose $170 million of nano cryptocurrency. While the precise sequence of events that caused the catastrophic collapse of the exchange with the assets of thousands of customers is still being confirmed, poor code is being blamed. As reported at the time:

There are rumors that Bitgrail became insolvent following a withdrawal bug that was discovered by some users and then shared in Discord and other chat groups, causing the wallet balance to gradually diminish. One user explained: “There was a bug on Bitgrail where if you placed two orders you got double balance added to your account. You could then withdraw while the orders were up and steal the coins. You had negative balance in the end but you could just make a new account.”

Bad Code Has Lost $500 Million of Cryptocurrency in Under a Year

In the aftermath of the incident, this theory has been bolstered by allegations that a bug was indeed responsible, and not in nano’s code, but in Bitgrail’s. One source asserted: “There was a bug, on the withdraw page. But this check was only on java-script client side, you find the js which is sending the request, then you inspect element – console, and run the java-script manually, to send a request for withdrawal of a higher amount than in your balance. Bitgrail delivered this withdrawal. How many people did this? Who knows.”

There was another bug, you could request a withdrawal to your address – from another user-id, from another user-account. That would cause the other users balance to have “missing funds” or “negative balance”. Bitgrail bomber solved this bug by manually entering the “correct” numbers in his database. This is what you get for using a PHP website coded by same skill-level as CfB of IDIOTA.

Even the Best Cryptocurrencies Aren’t Immune to Poor Code

The cryptocurrency most commonly associated with catastrophic bugs is ethereum. That’s not due to its underlying code, but on account of the smart contracts that can be built on top of the ethereum framework. First there was the DAO, which led to ethereum being forked right out the gate, and then there was the Parity bug that caused 150,000 ETH to be stolen, followed by the other Parity bug that caused $168 million of ETH to be locked up.

In the past couple of weeks, ethereum bugs have surfaced once more, albeit on a smaller scale. Proof of Weak Hands (PoWH) was a joke scamcoin which turned into an actual scamcoin after a bug led to the loss of 900 ether worth $1 million that had been sent to the contract address. The developer then disappeared after receiving death threats from investors aggrieved to discover that the joke Ponzi they were buying into was even less legitimate than it had seemed.

Bad Code Has Lost $500 Million of Cryptocurrency in Under a Year
After a smart contract bug led to the loss of 900 ETH, the PoWH website looked like this in the days afterwards

PoWH has since spawned a new scamcoin called ethpyramid which is for “strong hands only”. To the question “Is Ethpyramid secure?” the site responds “Yes. Our dev team put a lot of time into refining and testing this contract to make sure your tokens are safe. Internal functions of the contract are not accessible to the end user.” There’s also PoWH420, “the world’s dank autonomous and self-sustaining 420 pyramid scheme”.

Bad Code Has Lost $500 Million of Cryptocurrency in Under a Year
PoWH 420

Even if joke coins and their joke developers are taken out of the equation, it’s evident that cryptocurrencies are only as strong as their weakest link. While altcoins such as ethereum and nano have undoubted potential, like every other crypto they’re hostage to bugs lurking in wallets, smart contracts, and exchanges. One bad line of code is all it takes.

Do you think Bitgrail was brought down by a withdrawal bug or is there more to this story? Let us know in the comments section below.


Images courtesy of Shutterstock, and PoWH420. Katie Webster assisted with this article. 


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