Hackers hijacked Japanese investors' accounts, manipulating the stock market to defraud over 100 billion yen!

According to a report by Bloomberg, criminals are hijacking Japanese online brokerage accounts and using them to inflate the prices of cheap global stocks. Since February, the amount of fraudulent trading has reached 100 billion yen (approximately 710 million dollars). These eyewash schemes typically use hacked accounts to purchase illiquid stocks both domestically and internationally, allowing anyone who previously built a position to cash out at inflated prices.

How do hackers infiltrate your securities trading account?

Nobuhiro Tsuji, a cybersecurity expert from SB Technology, stated that the criminals behind these scams likely used man-in-the-middle attacks and information theft techniques to gain access to accounts. The first method utilizes fake and legitimate websites to steal cookies, which are small text files stored in web browsers to save session data.

Attacks typically lure users to fake websites through phishing emails or malicious advertisements. The fake website then redirects users to a legitimate site, where their login credentials are intercepted. In some cases, attackers build extremely complex interfaces, for example, displaying the real website on one side of the browser and the fake website on the other side to deceive users.

In contrast, information stealing programs are a type of malware specifically designed to steal sensitive information such as IDs and passwords. These programs hide in emails, malicious ads, or phishing websites, infecting users' devices and quietly stealing all stored personal data—usually without the users even being aware that they have been compromised. According to research by Macnica Security Research Center, there have been at least 105,000 credential leakage incidents in Japan.

How do hackers manipulate the market to gain huge profits?

An anonymous investor stated that his account was hacked and used to purchase Japanese and Chinese stocks, resulting in a loss of approximately 50 million yen. The Tokyo resident in his 50s reported that on the morning of April 16, a notification about his account suddenly popped up on his iPhone. He felt panicked and immediately called the brokerage firm, but the firm stated that they could not freeze the account.

The investor stated that although he has only purchased index funds that track the S&P 500 index and has never bought individual stocks, his account was used to purchase stocks on margin. Faced with the plummeting prices, he chose to sell the stock to avoid further losses. Since the stocks were purchased through leverage, the brokerage firm stated it would liquidate his holdings of S&P stocks to cover the losses.

The investor claimed that one of the stocks purchased with his account was DesignOne Japan Inc. On April 16, the trading volume of the stock was 5.8 million shares, while the average daily trading volume over the past six months was only 194,000 shares.

The hackers profit by first buying into the stock, as such stocks have very low trading volume and are easy to manipulate in price. The hackers use the victims' accounts to leverage large purchases, driving up the price, and then cash out their profits, leaving the innocent victims facing the tragic fate of liquidation.

In response, some Japanese securities firms have stopped processing buy orders for certain Chinese, American, and Japanese stocks. Major Japanese brokers, such as Rakuten Securities and SBI Securities, report unauthorized trading on their platforms. These intrusion incidents expose potential weaknesses in Japan's ability to protect the market from hacking attacks. They may also undermine government efforts to encourage more people to invest for retirement, especially since some victims have stated they do not understand how their accounts were compromised, and the securities firms have yet to compensate the victims for their losses.

Why are hackers targeting Japan for market manipulation?

In recent years, the Japanese government has actively promoted a small investment tax exemption plan ( NISA ) to encourage the public to engage in long-term investments, resulting in a significant influx of funds into the stock market, which has also contributed to the prevalence of such hacking activities.

The Financial Services Agency of Japan stated that the number of fraudulent trading cases in the first half of April surged from 33 in February to 736, but it did not disclose the amount of losses suffered by victims. This puts the government's strategy to attract more investors at risk.

Japan's Finance Minister Katsunobu Kato stated on April 22 that the Japanese government has requested brokerage firms to engage in "good faith" negotiations with clients regarding compensation for losses.

The Japan Securities Dealers Association is an umbrella organization for Japanese securities companies, and the association also urges its members to upgrade their systems and enforce multi-factor authentication.

Yutaka Sejiyama, the deputy director of the Macnica Security Research Center, stated that one vulnerability in Japan is that people tend to place orders through browsers rather than using more secure mobile applications. Currently, similar cases have not surged in other countries.

In this article, hackers hijacked Japanese investors' accounts, manipulating the stock market and causing fraud amounts to exceed 100 billion yen! First appeared in Chain News ABMedia.