Japanese cryptocurrency exchange DMM Bitcoin is reportedly preparing to liquidate after a devastating hack in May led to the loss of $320 million worth of Bitcoin. The company has struggled to recover from the breach and is now reportedly winding down its operations.
Plans to Transfer Customer Assets
According to Nikkei Asia, DMM Bitcoin plans to transfer its customer assets to SBI VC Trade, a cryptocurrency exchange owned by SBI Group, by March 2024. The report suggests the exchange has abandoned efforts to revamp its operations, although the publication did not cite specific sources for the information.
Details of the May Hack
The May 30 breach, described as an “unauthorized leak,” resulted in the theft of over 4,500 Bitcoin from a single wallet. DMM Bitcoin immediately froze withdrawals, new account openings, and trading activities to contain the situation. At the time, the exchange assured customers that all user deposits would be fully guaranteed, promising to procure equivalent Bitcoin to compensate users, with support from its parent company, DMM Group.
The hack marked one of the largest crypto heists in Japan, second only to the infamous $530 million Coincheck hack in 2018. Blockchain investigator ZachXBT reported in July that $35 million of the stolen Bitcoin had been laundered through platforms like Huione Guarantee. The attack is suspected to have ties to the Lazarus Group, a North Korean state-backed hacking organization, due to similarities in laundering techniques.
Challenges Beyond the Hack
DMM Bitcoin’s troubles extended beyond the breach. In November, the exchange announced the discontinuation of its Seamoon Protocol, a Web3 gaming and content platform linked to its parent company, DMM.com. The project faced sustainability challenges due to “recent rapid changes in the business environment.” The exchange had also been collaborating with Progmat to launch its own stablecoin, but this initiative has seemingly stalled.
2024: A Year of Crypto Exchange Hacks
DMM Bitcoin’s shutdown adds to the string of centralized exchange hacks in 2024. High-profile incidents include:
- WazirX (India): Hacked in July for $235 million.
- BingX (Singapore): Lost $52 million in September.
- BtcTurk (Turkey): Suffered $55 million in losses from a hot wallet breach in June.
These incidents highlight ongoing security challenges in the crypto sector, particularly for centralized exchanges.
Launched in January 2018 by Japanese e-commerce giant DMM Group, DMM Bitcoin once sought to carve a significant presence in the cryptocurrency market. However, the combination of the devastating hack, stalled projects, and shifting market conditions has brought its operations to a halt.
