DMM Bitcoin, a popular Japanese exchange, ceased operations in October 2024 following a hack that resulted in the theft of $320 million in digital currency. What are the next steps and what does this mean for clients?
Operations of DMM Bitcoin Halted
DMM Bitcoin, one of the most popular Bitcoin exchanges in Japan, halted its operations in October after a hack in May 2024, resulting in the theft of $320 million in digital currency.
Asset Transfer to SBI VC Trade
According to local news, DMM Bitcoin is set to transfer all assets, including Japanese yen and cryptocurrencies, to SBI VC Trade by the end of the financial year in March 2025. Customers will be able to retain their unfiltered margin trading positions, though these will not be transferred to the new platform until closed and paid for. SBI VC Trade, a subsidiary of SBI Holdings, will continue to maintain confidentiality for DMM Bitcoin clients.
Reasons for Closure and Implications
The hack exposed issues in DMM Bitcoin's risk management, resulting in an improvement order from Japan’s Financial Services Agency (FSA) in September 2024. Despite securing ¥55 billion from its parent company DMM.com to offset customer losses, continued service restrictions led to the decision to close the business.
This incident underscores the importance of security in the cryptocurrency business, highlighting the need for authoritative oversight to prevent such breaches in the future.