Cryptocurrencies such as Bitcoin may have the inherent volatility that urges investors to take on great opportunities. However, exchange bugs are not one of them. In the case of the Zaif exchange of Japan, it accidentally set the prices of Bitcoin to $0. An enterprising investor tried to pull out 2,200 trillion yen from the service, or about $20 trillion.
The bug in question implied that last week, the government registered that Zaif exchange had a 20-minute window whereby the prices of Bitcoin were locked at $0 for all purchases. Unsurprisingly, numerous customers took advantage of the said flaw and attempted to buy up loads of the scarce digital commodity, only to try and resell it for a huge profit later. However, nobody was as ambitious as one customer though who tried to profit over 100 times that of the entire global market value of Bitcoin.
Reuters reported that once the bug in its system was uncovered, Zaif immediately voided all transactions that happened during that window. However, that has not stopped the potential Bitcoin trillionaire from attempting to hold on to their impossible returns.
The said exchange bug and its related fallout came at an interesting time for the relations of cryptocurrencies in Japan, which announced that it as an accepted means of payment recently. That is a move that is uncommon in all economies, let alone the first world ones, and is likely to be utilised as a case study by others in the effectiveness of such a tactic.
Although people are not particularly concerned regarding global attempts to regulate or ban cryptocurrencies, countries such as China have taken extreme measures to do so, and there is a confusion of which precedent will have the most significant impact moving forward.
Zaif and 15 other exchanges have been able to register in Japan so far, with plans for all of them to be a part of a regulatory body for the industry of cryptocurrency this coming April. Together they will set out the rules and regulations to help sustain a healthy industry while helping to prevent the illegal practices that cryptocurrencies are occasionally used for, such as purchasing online of money laundering and illicit substances.
It is not clear yet what such a regulatory body would do to exchanges that were discovered to have a breach of its rules. However, penalties of some sort would likely be implemented.