• 04 December, 2024
News

DMM Bitcoin Announces Shutdown, Plans Asset Transfer: Report

DMM Bitcoin Announces Shutdown, Plans Asset Transfer: Report

Japanese crypto exchange DMM Bitcoin has announced the closure of operations and plans for liquidation. The decision follows a security breach in May that resulted in a $320 million loss. As part of the liquidation, it will transfer all customer deposits to SBI VC Trade by March 2025.

The DMM Bitcoin exchange is part of the prominent DMM.com Group. According to a report by Nikkei Asia, DMM Bitcoin and SBI VC have reached a fundamental agreement for the comprehensive transfer of customer accounts and deposit assets. The transition plan includes the transfer of both Japanese yen and crypto held in DMM Bitcoin accounts to SBI VC Trade’s platform.

During the reported hack, attackers successfully infiltrated the exchange’s servers and accessed wallet private keys. The hackers made off with more than 4,500 Bitcoin from a single wallet. Security analysts have suggested possible involvement of the North Korea-affiliated Lazarus Group in the attack.

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The incident ranks as Japan’s second-largest cryptocurrency exchange hack, surpassed only by the $532 million Coincheck breach. In the aftermath of the attack, DMM Bitcoin committed to fully guaranteeing user deposits. The exchange even pledged to acquire equivalent Bitcoin amounts to compensate affected users.

The Japanese cryptocurrency market has faced numerous challenges in recent years. This has prompted increased regulatory oversight. The Financial Services Agency (FSA) has taken an active role in strengthening the country’s crypto regulatory framework.

In November 2024, the FSA proposed new legislation aimed at preventing domestic crypto asset transfers to foreign entities. This was in response to concerns about international exchange vulnerabilities. DMM.com will, however, continue its other operations. The company’s cryptocurrency exchange division maintained large trading volumes before the security breach. This development occurs against the backdrop of persistent security challenges. This is evidenced by recent incidents such as India’s WazirX losing $225 million to hackers earlier this year. There has been an evident rise in the number of hacks as crypto gains mainstream adoption.

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