GMO Internet Group Cuts CEO Pay, Prompts Bounty After Cyberattack Breaches

Clients of a major Japanese internet service provider are facing unexpected charges and data leaks after a recent cyberattack. GMO Internet Group, headquartered in Tokyo, confirmed on Monday that unauthorized access to its Onamae.com Desktop Cloud service exposed client information. The breach resulted in transactions that customers did not authorize. The company stated that more than 26,000 cases were affected, including dozens of securities firms and other businesses.

Masatoshi Kumagai, who founded GMO in 1991, led a press conference in Tokyo to address the incident. Kumagai and other executives performed deep, repeated bows, a traditional Japanese gesture of apology. He offered his deepest apologies and acknowledged that internal warnings about a systemic weakness against this type of attack had been ignored. Kumagai admitted that the necessary measures were not taken to address the vulnerability.

The company has outlined specific steps to rectify the situation. GMO promised to compensate for losses and pay all clients 5,000 yen, approximately 30 dollars, as a gesture of goodwill. The firm also plans to switch to a new security system. To account for the failure, Kumagai will reduce his salary by 30% for three months. Other senior executives will receive smaller pay cuts.

Kumagai also apologized for recent social media posts, including a photograph of him smiling. He suggested that the image might have hurt the feelings of victims. The company acknowledged that the attackers used ransomware, software that blocks equipment to demand payment. GMO stated that it refused to pay the ransom.

To identify the perpetrators, GMO is offering a one million dollar bounty for information leading to the arrest of the attackers. The company created a website called GMO Cybercrime Bounty where people can submit tips in English, Japanese, or Chinese. As of last week, the firm received more than 400 contributions.

Japanese media reports indicate that individuals lost large sums of money through the service without initiating the transfers. The incident highlights cybersecurity vulnerabilities in Japan, which some experts say have been minimized for years. Prime Minister Sanae Takaichi has pledged to strengthen the country's cybersecurity measures, though the government declined to comment on the GMO case or possible suspects.

The financial impact on GMO is still unclear. The company’s shares, which have fluctuated over the past year, fell after the news broke. The stock has dropped 17.5% year to date. The press conference began after the Tokyo stock market closed for the day.