Cryptocurrency exchange DMM Bitcoin is preparing to close down after a major hack
Date: 2024-12-02 Author: Gabriel Deangelo Categories: BUSINESS
Following a major hack that resulted in the loss of more than 4,500 bitcoins, cryptocurrency exchange DMM Bitcoin has decided to wind up its operations. According to Nikkei Asia on December 2, the company plans to transfer customer assets to SBI VC Trade, an exchange owned by the SBI Group, by March next year.
According to a statement released on December 2, the two companies have entered into a basic agreement to transfer all customer accounts and assets. “As part of the agreement, customer deposit assets (in Japanese yen and cryptocurrencies) held in DMM Bitcoin accounts will be transferred to us no later than March 2025,” the document says. SBI VC Trade will also handle the transfer of crypto assets held in DMM Bitcoin accounts.
$320 Million Hack
On May 30, DMM Bitcoin suffered a server hack in what the company called an “unauthorized leak,” which resulted in the loss of access to a single wallet containing over 4,500 bitcoins. At the time, the exchange said it would guarantee users a full refund by suspending withdrawals, new account registrations, and transactions on the platform.
The company has secured financial assistance from a group of its subsidiaries to compensate for the losses. Despite the efforts, the incident was the second-largest in Japan after the 2018 Coincheck hack, which resulted in the theft of $530 million.
In July, renowned blockchain data analyst ZachXBT reported that about $35 million of the stolen funds were laundered through the Huione Guarantee platform. He also noted that the hacker group Lazarus was likely behind the hack, given the similar money laundering methods and external signs.
Exchange History and Termination of Other Projects
DMM Bitcoin was founded in January 2018 and is a subsidiary of Japanese e-commerce conglomerate DMM Group. In November, the company announced the closure of its Seamoon Protocol project, a platform for Web3 games and content related to anime production DMM.com.
In addition, the exchange was working on issuing its own stablecoin through the Progmat platform to expand the ecosystem. However, the project faced difficulties due to “rapid changes in the business environment,” making its development unsustainable.
Rise in Centralized Exchange Hacks in 2024
In 2024, hacker attacks on centralized exchanges have increased significantly. In July, the Indian exchange WazirX lost $235 million, in September, Singapore's BingX had $52 million stolen, and in June, Turkey's BtcTurk lost up to $55 million due to the compromise of hot wallets.
The DMM Bitcoin exchange is ending its history, having become a victim of one of the largest incidents in the world of cryptocurrencies.
