Unauthorized stock trading occurred due to cyberattack estimated to use AI at Japanese securities company

Fraudulent transactions in 5 accounts... Kyodo "Presumes a system takeover, not an account theft"

(Tokyo = Yonhap News) Correspondent Cho Sung-mi = It was reported on the 21st that the online trading system of a Japanese securities company suffered a cyber attack that appears to have exploited artificial intelligence (AI), resulting in stock transactions that were not intended by customers.

According to Kyodo News and Tokyo Shimbun, Iwai Cosmo Securities announced that the Tradeworks server, which was entrusted with operating the online trading system, suffered a cyber attack, resulting in illegal stock trading in five accounts.

The securities company detected a cyber attack on the 14th and took emergency measures such as restricting illegal access, but before the blocking took place, stock trading orders were received from 7 accounts, and transactions were completed in 5 of these accounts.

The securities company stated that it had completed the process of returning the transaction to its pre-transaction state and that no actual financial damage occurred to customers.

The company also confirmed that the names and email addresses of 4,975 people were leaked along with fraudulent transactions.

In Japan, crimes were rampant last year as well, with the online securities accounts of many securities company users being hijacked and fraudulent trading attempts being attempted.

At the time, the method used was for criminals to steal accounts by sending emails to victims to download malicious code.

Kyodo News reported that the fraudulent transaction that occurred this time appears to be the first case in which a financial institution has been confirmed to have suffered damage among a series of recent fraudulent access cases that have occurred in Japan.

The media explained that it does not appear to be an account theft-type crime where personal information is stolen through methods such as phishing, but rather a serious situation in which the system itself has been taken over.

Tradeworks, which suffered a cyber attack, claimed that it could not be concluded that AI was used in the cyber attack, but local media analyzed that there was a possibility that the attack was caused by AI, given that an indiscriminate attack was carried out on the online trading system.

Chief Cabinet Secretary Minoru Kihara, a Japanese government spokesperson, said that the government is investigating the actual situation and that the Financial Services Agency has requested Iwai Cosmo to analyze the cause and prepare measures to prevent recurrence.

The Japan Securities Dealers Association announced that it will cooperate with the Financial Services Agency to inspect the trading systems of each securities company, including small and medium-sized or local securities companies that are judged to have insufficient safety measures, and support the preparation of countermeasures.