- DMM Bitcoin shuts down after a $320M hack in May 2024.
- Customer assets will transfer to SBI VC Trade by March 2025.
- Hack tied to North Korea’s Lazarus Group highlights security risks.
- Closure ends DMM’s Web3 projects amid rising crypto cyberattacks.
In a significant development for the Japanese cryptocurrency market, Digital Media Mart (DMM) Bitcoin, one of the major exchanges, has announced plans to wind down its operations following a devastating $320 million Bitcoin hack in May 2024. The breach, which compromised private keys and led to the loss of 4,500 BTC, has proven to be an insurmountable hurdle for the platform.
On May 30, DMM Bitcoin suffered a major security breach described as an “unauthorized leak,” where a single wallet containing more than 4,500 Bitcoin was compromised. Though the company at the time said it would fully guarantee all deposits from users, it has never managed to recover the lost coins. Actions taken immediately included a pause on withdrawals, freezing account openings, and putting a hold on trading.
To reassure users, DMM promised to procure equivalent BTC with the support of its parent firm at DMM Group; the efforts to obtain the funds and revive the operations again eventually fell short, forcing it to change ways that were leading the company initially.
DMM Bitcoin Shifts Assets to SBI VC Trade
In a translated statement released on Dec. 2, DMM Bitcoin confirmed a basic agreement with SBI VC Trade, a cryptocurrency exchange operated by the financial giant SBI Group. Nikkei Asia reported on Dec. 2 that under the deal, DMM Bitcoin will transfer all customer assets—including deposits in Japanese yen and cryptocurrencies—to SBI VC Trade by March 2025.
“SBI VC Trade will also handle the transfer of crypto stocks held on DMM Bitcoin,” the statement elaborated, ensuring that user holdings remain intact during the transition.
The DMM Bitcoin hack ranks one of Japan’s largest crypto losses since the infamous $530 million Coincheck breach in 2018. Adding to the intrigue, blockchain investigator ZachXBT reported $35 million of the stolen Bitcoin to laundering activities on Huione Guarantee, a known marketplace for crypto scams. Speculation also ties the attack to the North Korean Lazarus Group, known for its sophisticated laundering techniques and high-profile cyberattacks.
Web3 Ventures Halt Amid Industry Shifts
The exchange’s closure brings several ambitious initiatives to a close. DMM Crypto, its Web3 division, had only just announced the termination of Seamoon Protocol, an online gaming and anime-centered community. Despite working with Progmat on creating a stablecoin, “recent rapid changes in the business environment” eventually made it difficult to maintain these projects.
DMM Bitcoin’s collapse comes during an alarming year for the world of CEX. This year’s significant hacks include $235 million from Indian WazirX, $52 million from Singapore-based BingX, and $55 million from Turkey-based BtcTurk. This has outlined the capabilities of centralized platforms to face cyber-attacks continuously.
The transfer of assets to SBI VC Trade gives a silver lining to DMM Bitcoin users, considering the SBI Group’s robust infrastructure, promising continuity and security. In this event, further cybersecurity measures and regulatory oversight to protect both users and institutions against an increasingly hostile digital landscape emerge as urgent needs for the cryptocurrency ecosystem in Japan.
As the crypto community grapples with these challenges, DMM Bitcoin’s story is a stark reminder of the risks inherent in centralized platforms, prompting calls for innovation in secure, decentralized alternatives.
Related | Grayscale’s Crypto Holdings Surge 85% with Triple-Digit Altcoin Growth
