Hacking of Trading Accounts in Japan Spreads to Midsized Firms

Criminal hackers have taken their hacking spree to midsized brokerages in Japan, targeting online trading accounts after the country's largest securities firms implemented additional security measures. Okasan Securities and Iwai Cosmo Securities, two mid-sized brokerages, have both fallen victim to fraudulent trades.

At Okasan Securities, a third party gained unauthorized access to client accounts and conducted illicit trades in Japanese equities. However, the brokerage did not provide further details about the incident.

The hacking of online trading accounts has seen an explosion in Japan, with malicious transactions surging more than 10-fold in April from March. The Financial Services Agency reported that from January through April, fraudulent trades stemming from account takeovers totaled ¥304.9 billion ($2.1 billion) across 3,505 transactions.

This highlights the growing scale of the threat as criminals initially targeted 10 of Japan's largest brokerages. However, these firms have responded with new safeguards to protect their clients' accounts. Rakuten Securities has not suffered any unauthorized logins since May 2 after upgrading its online trading tools and enhancing security features.

The sector is increasingly turning to multi-factor authentication (MFA) as a defense measure. As of May 14, 74 brokerages had adopted mandatory MFA, according to the Japan Securities Dealers Association. This move aims to add an extra layer of security for clients' online trading accounts.

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