Glitch on Japanese crytocurrency drops Bitcoin price to zero

A blunder at a Japanese cryptocurrency exchange would have allowed investors to buy bitcoins for free for a brief period of time but none could take advantage of the opportunity.

According to Zaif, a government-registered exchange run by Osaka-based Tech Bureau Corp, a system glitch had let seven customers buy bitcoin with no yen value during a 20-minute window last week.

The trades were cancelled by the exchange, after it discovered the error, which happened on 16 February - though it was still trying to resolve the issue with one customer who tried to transfer the knock-down bitcoins from the exchange, a spokesman told Reuters.

Zaif's operator had gone through checks following the theft last month, of $530 million in digital money from Coincheck Inc, as regulators feared its systems were at risk from cyber-attacks.

According to commentators, the incident could see more attention given to security and systems at cryptocurrency exchanges, which were already under scrutiny in the wake of the Coincheck heist. The theft also raised questions about Japan's system of overseeing exchanges.

Zaif is among 16 exchanges registered with the government, which last year allowed 16 more - including Coincheck to continue operations pending full registration.

Reuters reports, citing sources, that the registered exchanges will form a self-regulatory body from April.

Japan has been a crypto-currency friendly country but has also been trying to regulate the exchanges in order to protect consumers.

In 2014, Japan had the largest bitcoin exchange based in Tokyo Mt Gox, which filed for bankruptcy after it lost 750,000 user bitcoins, and 100,000 of its own bitcoins. At the time the crypto-currency was valued less than $1,000. The total loss was $480 million.

Bitcoin shot 1,300 per cent last year but lost around half its value at one point this year, with more governments and central banks hinting regulatory crackdowns.