Japanese cryptocurrency exchange DMM Bitcoin is preparing to wind down its operations following a massive $320 million loss in Bitcoin due to a private key hack in May.
The breach left the company struggling to recover, forcing it to halt efforts to restructure and seek alternative solutions for its customers.
According to a Nikkei Asia report on December 2, DMM Bitcoin plans to transfer all customer accounts and assets to SBI VC Trade, a crypto exchange operated by the financial giant SBI Group.
The transfer is expected to take place by March 2025.
DMM Bitcoin Confirms the Arrangement
In a statement, DMM Bitcoin confirmed the arrangement, ensuring that customer assets, including Japanese yen and cryptocurrencies, would be safeguarded during the transition.
The security breach, described by the company as an “unauthorized leak,” occurred on May 30, compromising a private key linked to a wallet containing over 4,500 Bitcoin.
Despite assurances at the time that customer deposits would be fully protected, the exchange was forced to halt withdrawals, new account registrations, and trading.
DMM Bitcoin also pledged to procure the equivalent amount of Bitcoin to compensate affected users, with financial backing from its group companies.
The incident marks one of the largest crypto hacks in Japan’s history, second only to the infamous $530 million Coincheck hack in 2018.
In July, blockchain analyst ZachXBT suggested that the Lazarus Group, a North Korean-linked cybercrime organization, was likely behind the DMM Bitcoin hack.
He noted similarities in laundering techniques and off-chain activity, with approximately $35 million of the stolen funds traced to shady platforms like Huione Guarantee.
DMM Bitcoin was launched in 2018 by the e-commerce conglomerate DMM Group.
The company recently discontinued its Seamoon Protocol, a Web3 gaming and anime content project, citing rapid changes in the business environment.
It had also been working with Progmat to launch a stablecoin but shelved the initiative due to similar challenges.
Attacks on Major Centralized Exchanges
The DMM Bitcoin hack is part of a broader trend of increasing attacks on centralized exchanges in 2024.
Other major incidents this year include the $235 million breach of India’s WazirX exchange in July, a $52 million hack on Singapore's BingX in September, and a $55 million exploit of Turkey’s BtcTurk in June.
More recently, XT.com, a Seychelles-based cryptocurrency exchange, paused withdrawals following reports of a suspected $1.7 million hack.
Last week, U.S. federal prosecutors charged five individuals in connection with a sophisticated hacking operation that allegedly stole $11 million in crypto and sensitive data from individuals and companies across multiple countries.
According to court filings, the alleged hackers targeted at least 29 individuals, with one victim losing over $6.3 million in cryptocurrency after their email and digital wallets were compromised.
Prosecutors claim the group also targeted 45 companies in the U.S., Canada, India, and the United Kingdom.
Among their targets was a U.S.-based cryptocurrency exchange whose employees were tricked by fake text messages into divulging sensitive credentials.
The post Japanese Crypto Exchange DMM Bitcoin to Liquidate After $320M Hack appeared first on Cryptonews.
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