GMO Internet: 26,000 victims of cloud breach

More than 26,000 cases of unauthorized access have been confirmed by GMO Internet Group, the Tokyo-based provider of online services. These incidents stem from recent cyberattacks that compromised the company’s cloud infrastructure. The breaches resulted in the leakage of client information and the execution of financial transactions that account holders did not initiate.

The company’s Chief Executive Officer, Masatoshi Kumagai, addressed the public on Monday during a press conference in Tokyo. He and other senior executives performed repeated deep bows, a traditional Japanese gesture of apology. Kumagai stated, “I offer my deepest apologies,” while emphasizing the firm’s serious response to the crisis. He acknowledged that internal warnings about systemic vulnerabilities to such attacks had been raised but that adequate measures were not taken in time.

Kumagai, who founded the company in 1991, also apologized for recent social media posts. These included a photograph of him smiling, which he said may have hurt the feelings of victims. As part of the compensation package, Kumagai will reduce his own salary by 30% for the next three months. Other senior executives will face smaller pay cuts. GMO has promised to reimburse all client losses and pay 5,000 yen, approximately $30, to every customer as a gesture of goodwill.

The security failure affected the Onamae.com Desktop Cloud service. Decisions were made to switch to a new security system. Japanese media reports included interviews with individuals who discovered large sums of money missing from their accounts. These users stated they did not authorize the transactions. The attackers used ransomware, a type of software that locks organizational equipment to demand payment. GMO confirmed it refused to pay the ransom.

To identify the perpetrators, GMO established a website called “GMO Cybercrime Bounty.” The company offers a $1 million reward for information leading to the identification and arrest of the attackers. Submissions can be made in English, Japanese, or Chinese. As of last week, the firm had received more than 400 submissions from the public.

The incident occurs against a backdrop of heightened concern regarding cybersecurity. Last Friday, Binance, the world’s largest cryptocurrency exchange, reported that hackers stole over $6 billion. This appears to be the largest recorded cryptocurrency theft. Blockchain companies indicated the attack originated from a North Korean hacker unit. Prime Minister Sanae Takaichi has promised to strengthen Japan’s cybersecurity measures. The government has declined to comment on the specific GMO case or name potential suspects.

Expert opinions suggest that Japan’s cybersecurity vulnerabilities have been minimized for years and lack a sense of urgency. The GMO incident has brought these concerns into sharp focus. The financial impact on GMO’s results is not yet fully clear. The company’s stock price fell following the news of the attacks. Shares have dropped 17.5% in the year to date. The press conference took place after the Tokyo stock market had closed for the day.

GMO provides various internet services related to cybersecurity, online marketing, infrastructure systems, robotics, and artificial intelligence support. Kumagai spoke passionately and with tears during the conference. He described how he and his employees work to bring the benefits of internet technologies to clients. This was the company’s first public briefing since the security issues became public knowledge.