Japan companies compensate users as cyberattacks buffet economy
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Japanese companies have come under a wave of cyberattacks in October.
PHOTO: REUTERS
- Japanese firms are paying users after cyberattacks disrupt services and expose data risks. GMO Internet will give customers 5,000 yen and free service for six months after an attack on its forex trading service.
- GMO said it rejected a ransom demand and will work with police and authorities. CEO Masatoshi Kumagai warned, “The internet itself is now starting to break down,” and called for stronger public-private cyberdefence.
- The attacks show weak data protection and rising costs for Japanese companies. Park24 also paid 3,000 yen to users after a breach, while TrendAI said Japan had 723 cybersecurity incidents by Oct 20.
AI generated
TOKYO – Japanese companies are moving to pay compensation to users following waves of cyberattacks that have disrupted internet services and raised concerns about economic stability.
GMO Internet, a leading provider of online financial services, said customers would be compensated for losses stemming from unauthorised access following a cyberattack on its foreign exchange trading service, and all customers would receive 5,000 yen (S$41) as “an initial gesture of good faith”, chief executive officer Masatoshi Kumagai said in a blog post on Oct 25.
“The internet itself is now starting to break down,” said Kumagai, whose sprawling group includes internet infrastructure and cryptocurrency trading.
On the evening of Oct 26, Japanese Prime Minister Sanae Takaichi said the government plans to compile an emergency package of cybersecurity measures against cyberattacks by some time next week.
Japan said on Oct 23 it would set up a team to simulate cyberattacks using artificial intelligence to identify weaknesses in technology systems as organisations scrambled to curtail risks from flaws in the PHP programming language that underpins much of the internet.
More broadly, Japanese companies are being roiled by attacks, with experts saying AI is helping automate tasks from scanning for software vulnerabilities to crafting phishing campaigns, making cybercrime faster, cheaper and harder to detect.
“The internet is increasingly being transformed into a tool that malicious actors use to threaten and rob people,” said Kumagai.
Shares of GMO, which had a market value of US$2.6 billion (S$3.3 billion) as at closure on Oct 23, slumped almost 16% to a four-month low against a 0.2% rise in Tokyo’s benchmark index.
Government and company websites in Japan, Europe and elsewhere went offline last week after the disclosure of critical vulnerabilities in the PHP programming language prompted millions of hacking attempts.
Call on Japan to step up cyberdefence
Kumagai has urged the Japanese government to apply cyberdefence measures in response to the cyberattack, after the introduction of a cyberdefence system in October.
The system could involve steps such as attacking hostile servers to neutralise threats.
“Now is the time for the public and private sectors to work together to protect Japan,” wrote Kumagai.
GMO said it had received a demand for money from a party believed to be behind the attack, along with a threat to disclose company and customer information if it did not comply.
In an update on Oct 26 to his blog post, Kumagai said the party had demanded US$50 million in cryptocurrency.
GMO said it would not comply with the demand and would respond to the incident in coordination with police and the other authorities. It did not mention any connection to PHP flaws.
The company, which will provide a free alternative service to its customers for six months, said it could not currently calculate the impact on earnings from the goodwill payments and compensation for losses.
White-hat hackers working for the company had identified security issues, but the depth and speed of the response were insufficient, Kumagai wrote.
Customer data protection weaknesses
The scale of recent cyberattacks has exposed weaknesses in Japanese companies’ ability to protect their wealth of customer data and raised the prospect of surging costs to beef up defences.
“Companies already have standard security measures in place, so if they want to strengthen them further, there is a possibility that the additional cost burden could be quite substantial,” said Shoichi Arisawa, an analyst at IwaiCosmo Securities.
There have been 723 cybersecurity incidents in the year to Oct 20, according to data from TrendAI, exceeding the annual totals in 2025 and 2024.
“Reports may reflect both the threats organisations face and greater visibility into incidents that would previously have gone undetected, been under-investigated, or remained undisclosed,” said Satoshi Nagano, president of cybersecurity firm ESET Japan.
Park24, which operates the Times car-sharing service, said on Oct 23 it would make 3,000 yen payments to customers following a personal data breach. It said it would no longer retain identity document images after completing registration verification and expects to book an extraordinary loss of 5.5 billion yen due to responses to the attack and compensation payments. REUTERS