GMO Internet Stock Falls 11% After Announcing Compensation for Cyberattack Victims

GMO Internet's shares tumbled after the company announced it would compensate customers following a significant cyberattack on its foreign exchange trading service. The move, along with a similar payment plan from car-sharing operator Park24, highlights the growing financial repercussions for Japanese corporations amid a wave of digital security breaches.

Market Reacts to Compensation Plan

Shares in GMO Internet slumped 11% in Tokyo's morning session, sharply underperforming the flat benchmark index, according to a Reuters report. The sell-off followed the company's weekend announcement that it would cover losses from unauthorized access and provide all affected customers with 5,000 yen (approximately $32) as an "initial gesture of good faith."

In a Sunday blog post, CEO Masatoshi Kumagai detailed the compensation plan. The company also confirmed it had received a ransom demand, which it said it would not comply with, and is now coordinating its response with police and other authorities.

Broader Threat from Software Flaws

The attack on GMO is linked to a wider series of security incidents stemming from critical vulnerabilities discovered in the PHP programming language, which underpins a large portion of the internet. The disclosure of these flaws last week prompted millions of hacking attempts globally, disrupting services for numerous government and corporate websites.

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Experts cited in the report noted that artificial intelligence is making cybercrime faster and more difficult to detect by automating tasks like scanning for vulnerabilities and crafting phishing campaigns. In response, the Japanese government said on Friday it will create a specialized team to simulate AI-driven cyberattacks to identify and fortify weaknesses in the country's technology systems.

Other Firms Announce Payouts

The trend of compensating customers for security failures extends to other industries. Key details include:

• Park24, which operates the Times car-sharing service, said on Friday it would make payments of 3,000 yen to its customers.
• The payment follows a personal data breach at the company, demonstrating the direct financial costs businesses are facing beyond operational disruption.