Japan-located crypto exchange DMM Bitcoin is set to be Liquidated

DMM Bitcoin, a Japanese cryptocurrency exchange, is set to cease operations following a significant security breach that resulted in the theft of approximately $32 million in Bitcoin. The hack, which occurred in May 2024, involved a personal key compromise that led to the loss of over 4,500 Bitcoins.

Liquidation Plans

DMM Bitcoin has announced its decision to halt efforts to revive the business and will transfer customer assets to SBI VC Trade, a digital currency exchange owned by SBI Group, by March 2025. This agreement was confirmed in a statement released on December 2, which noted that all customer accounts and assets would be moved to SBI. Deposits made in Japanese yen and cryptocurrencies will also be included in this transfer.

Details of the May Hack

The breach was discovered on May 30, 2024, when DMM Bitcoin experienced a server hack described as an “unauthorized leak.” At the time of the theft, the stolen Bitcoins were valued at around $332 million. Following the incident, DMM Bitcoin assured users that their funds would be protected and temporarily suspended account registrations, withdrawals, and trading activities. The exchange committed to reimbursing users for lost funds with support from its affiliated companies.

This incident marks Japan’s second-largest cryptocurrency exchange hack, following the infamous Coincheck breach in 2018, which resulted in losses exceeding $530 million.

Company Background and Other Ventures

Founded in January 2024 and owned by DMM Group, DMM Bitcoin was also involved in various projects, including the Seamoon Protocol, a Web3 gaming platform. However, due to rapid market changes leading to insolvency, Seamoon announced it would cease operations in November. Additionally, DMM Bitcoin had been working with Progmat to develop its stablecoin but faced challenges.

As DMM Bitcoin prepares for liquidation, this situation underscores the ongoing security challenges faced by cryptocurrency exchanges and highlights the importance of robust security measures in protecting digital assets. The transfer of customer assets to SBI VC Trade aims to provide a smoother transition for affected users as DMM Bitcoin winds down its operations.