I find it amazing that cryptocurrency exchanges can be allowed function without similar controls to banks and other currency exchanges…:
At the heart of this campaign will be the newly established Group Information Security Audit Office, a unit dedicated to strengthening information security management and audit function of GMO Internet and its subsidiaries including GMO Coin.
A Step in the Right Direction
Cybersecurity is a burning issue facing the still-nascent cryptocurrency industry worldwide. Over the past couple of years, we have seen many crypto exchanges coming under devastating cyber attacks and losing fortunes in the process. Worse still, some of those exchanges to have been breached are never able to recover fully.
Case in point;Youbit (among many others).
The once-second largest digital currency exchange in South Korea now finds itself in ruins after suffering two cyber heists in eight months in 2017. Once in April, and then in December – the latter being absolutely devastating with the exchange losing nearly 17 percent of its total assets.
And now adding more to its woes, the insurer that Youbit signed up with shortly before the December heist, has flat-out rejected the exchange’s $2.8 million insurance claim citing policy violations.
GMO’s move to bolster its cyber defenses is meant to avoid precisely this kind of scenarios while simultaneously weeding out the scope for any trust deficit among its customers.
A Nudge from Regulators
GMO Internet decided to launch the Group Information Security Audit Office following an inspection of GMO Coin by the Japanese Financial Services Agency (FSA). In its report, the regulatory body asked the exchange to improve its cybersecurity.
It is worth noting here that the FSA has been keeping a close eye on crypto exchanges all over the country following the infamous Coincheck hack of January 2018 that saw the perpetrators getting away with 526 million XEM tokens. The fiat equivalence of the stolen XEM at that time was nearly half-a-billion dollars.
Through its new, supposedly robust cyber defense mechanism, GMO Internet aims to keep its customer information fully protected even against the worst of cyber attacks. Additionally, the company also plans on taking various steps to improve information security literacy and fostering security personnel.
The company stated:
“Our aim is to protect important customer information from the increasing cases of cyber-attacks. We are coming up with highly secured countermeasures which will help us improve group information security literacy while fostering security personnel.”
In other important steps to improve security, GMO has promised to appoint a knowledgeable security expert to oversee cybers defense. Apart from that, the company will also invite an external security expert to play the role of an adviser.
Just a week prior to the March 30 announcement, GMO Coin posted an update on its website saying that the exchange had submitted an FSA-requested business improvement plan to the Kanto Local Finance Bureau. The exchange also apologized to its customers and stakeholders for the “inconvenience and worry” they may have been put through.