The well-known cryptocurrency exchange DMM Bitcoin in Japan plans to liquidate following a hack in May, resulting in the loss of $320 million.
DMM Bitcoin Faces Major Losses
In late May, DMM Bitcoin experienced a significant security breach, resulting in the theft of over 4,500 Bitcoins. The vulnerability in private keys led to this theft, valued at approx. ¥48.2 billion (around $320 million), making it Japan's largest crypto theft in 2024. The incident forced the company to restrict several services, and although a similar amount of Bitcoin was secured in June through its parent company's support, operations remained challenging.
Regulatory Scrutiny and Systemic Failures
Following the hack, Japan's Financial Services Agency (FSA) issued a business improvement order to DMM Bitcoin in September, highlighting managerial issues such as the concentration of authority within a single team responsible for both system operations and security. The private key information leak was termed 'unauthorized,' with promises to recover the stolen Bitcoin using resources from the parent company.
Transfer of Customer Assets to SBI VC Trade
As part of its restructuring, DMM Bitcoin has agreed to transfer all customer assets to SBI VC Trade. This process is expected to be completed by March 2025. SBI VC Trade, part of the SBI Holdings, has the infrastructure to handle transactions for both fiat and crypto assets.
The unfortunate event underscores the importance of security within the cryptocurrency industry. The hack had severe implications for the company and its customers. The final transfer of assets to SBI VC Trade aims to enhance customer asset security.
