Cryptocurrency exchange operator Bitpoint Japan Co. said Friday roughly 3.5 billion yen ($32 million) worth of digital currencies has been stolen from its online system, leading the company to suspend all transactions and services.
The Tokyo-based company, established in 2016, said it will compensate the holders of the stolen assets totaling about 2.5 billion yen. The remaining 1 billion yen was lost from the company's deposits.
The incident came as Japan's Financial Services Agency has been tightening regulations for cryptocurrency exchange operators after digital money worth around 58 billion yen was stolen from Tokyo-based cryptocurrency exchange Coincheck Inc. in 2018.
Bitpoint Japan stores five cryptocurrencies -- bitcoin, bitcoin cash, ethereum, litecoin and ripple -- in its so-called hot wallet system that is connected to the internet, according to a press release issued by its parent firm Remixpoint Inc.
"We are working hard to get to the bottom of the incident, specify the exact amount that has been lost and take measures to keep the damage to a minimum," Remixpoint said.
The currency exchange operator initially detected a ripple transaction error at around 10:12 p.m. Thursday and confirmed a theft about 30 minutes later. At around 2 a.m. the following day, it found assets other than ripple were also lost.
Bitpoint Japan has been managing some cryptocurrency in its hot wallet system to facilitate transactions, according to the press release. The company suspended all transactions and services involving digital currencies in the morning.
The company has notified police of the situation, investigative sources said.
Bitpoint Japan was among six cryptocurrency exchange operators ordered by the financial watchdog last year to improve internal controls, including management of customers' assets.