18-year-old hacker referred to prosecutors over cryptocurrency theft

An 18-year-old boy was referred to prosecutors Thursday over stealing about 15 million yen worth of cryptocurrency last year by hacking a digital currency storage website, police said.
It is the first case in Japan in which criminal charges have been pursued against a hacker over cryptocurrency losses, the police said.
The boy from the city of Utsunomiya, Tochigi, whose name is being withheld because he is a minor, allegedly hacked Monappy, one of the websites where users can keep the virtual currency monacoin, and stole the amount between Aug 14 and Sept 1 last year.
He used software called Tor that makes it difficult to identify who is accessing the system, but the police identified him by analyzing the communication records left on the website's server.
The police said the boy has admitted to the allegations, quoting him as saying "I felt like I'd found a trick no one knows and did it as if I were playing a video game."
He took advantage of a weakness in a feature of the website that enables a user to transfer the currency to another user, knowing that the system would malfunction if transfers were repeated over a short period of time.
He repeatedly submitted currency transfer requests to himself, overwhelming the system and allowing him to register more money in his account.
About 7,700 users were affected and the operator will compensate them.
He then put the stolen monacoins in an account set up by a different cryptocurrency operator, received dividends in a different cryptocurrency and bought items such as a smartphone handset, the police said.
According to the operator of Monappy, the stolen monacoins were kept under an always-on internet connection and those kept offline were not stolen.
Japan has seen large digital currency heists in recent years amid a boom in people purchasing various currencies.
In 2014, 48 billion yen worth of bitcoin was stolen from the now-defunct cryptocurrency exchange MtGox. Then in January last year, about 58 billion yen worth of the digital currency NEM was taken from customers' accounts at Tokyo-based bourse operator Coincheck Inc.
In June, the Financial Services Agency, which regulates cryptocurrencies in Japan, ordered six virtual currency exchange operators to improve internal controls.

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