Bitcoin Exchange DMM Shut Down Following $320M Hack, Transfers Assets to SBI VC Trade
DMM Bitcoin, one of Japan’s most popular Bitcoin exchanges, ceased operations in October. hacked In May 2024, $320 million worth of digital currency was stolen.
The loss was attributed to the theft of private keys, with an actual loss of 4,500 Bitcoins. Nonetheless, attempts to bring services back to normal failed due to the severity of the damage to the platform.
SBI VC Trade Asset Transfer
According to a local report Asian Sources say that in order to target customers, DMM Bitcoin will be transferred to SBI VC Trade along with all assets including Japanese yen and cryptocurrencies. The transfer is expected to be completed by the end of the fiscal year in March 2025.
However, there are some restrictions, including for example unfiltered margin trading positions, which customers will be allowed to continue to hold but will not be added to the new platform until the position is closed and paid for, and all fees on the current platform will be cancelled. Cannot be transferred to a new platform.
It is speculated that SBI VC Trade, a subsidiary of SBI Holdings, will continue to maintain confidentiality for DMM Bitcoin clients. Coordination between the two companies is still ongoing and additional details regarding the transfer are expected to be announced in the near future.
Reason for closure
The hack also uncovered issues in DMM Bitcoin’s risk management and came shortly after the company received an improvement order from Japan’s Financial Services Agency (FSA) in September 2024. Although the exchange was able to secure 55 billion yen in funding from its parent company DMM.com, to help offset customer losses, the exchange said continuing to limit services would cause significant inconvenience to customers and result in the closure of its operations.
wider impact
This incident goes a long way in explaining why cryptocurrency businesses face significant cybersecurity risks. The FSA’s intervention proves that only authoritative supervision can prevent similar violations from happening again. Now that DMM Bitcoin is about to exit the market, its story is a lesson for exchanges around the world.
