Wednesday, October 27, 2021

$20 Trillion Bitcoin Withdrawal Attempt After Zaif Crypto Exchange Glitch

$20 Trillion Bitcoin Withdrawal Attempt After Zaif Crypto Exchange Glitch

A handful of users bought cryptocurrency for free during a brief glitch on Japanese cryptocurrency exchange Zaif, with one user attempting an impossible withdrawal of bitcoin equivalent to $20 trillion. The incident is yet another reminder that the cryptoverse — and its infrastructure — is still premature.

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Now That’s a Lot of Bitcoin …

During a 20 minute glitch on February 16th, cryptocurrency prices on Zaif were automatically locked in at $0. Unsurprisingly, a few users — seven to be exact — tried to take advantage of the eye-popping error.

One wide-eyed trader went further than the rest, however, in attempting to withdraw bitcoin equivalent to 2,200 trillion Japanese yen — not that there’s even that much bitcoin in existence to withdraw in the first place.

Bitcoin

Zaif employees quickly discovered the problem and promptly voided the transactions. In a new blog announcing the glitch, the Zaif team promised customers of the exchange wouldn’t be adversely affected. Reuters reported that Zaif is still resolving the incident with one of the traders that attempted a withdrawal during the glitch.

Atmosphere of Intensified Regulation

Along with Japan’s cryptocurrency liberalization efforts come new regulatory demands. Zaif was one of the 16 cryptocurrency exchanges that recently registered with the Japanese government in order to bring its operations into the mainstream.

A crucial aspect of Japan’s new regulations is the demand that domestic cryptocurrency exchanges maintain best-practice security protocols. So, while Zaif’s new lapse seems to have been minor relative to other incidents in the cryptoverse, it does portend the kind of infrastructure flaws that Japanese authorities are trying to avert hitherto.

The challenge of balancing hypergrowth with maintaining security will certainly be a dynamic to watch when it comes to cryptocurrency exchanges in general in the months ahead.

What’s your take? Does this incident make you a little bit more weary about centralized exchanges, or do you trust your trading flow? Sound off in the comments below. 


Images via Forbes, Wired

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