Japanese crypto exchange DMM Bitcoin to halt operations

Japanese cryptocurrency exchange DMM Bitcoin will cease trading by March 2025 following a hack that resulted in losses exceeding $300 million.

This decision follows months of recovery efforts which ultimately failed to restore the viability of the platform.

DMM Bitcoin to transfer all assets to SBI VC Trade

According to a Nikkei Asia report, the exchange is also considering selling all its assets to SBI VC Trade, a trading company owned by the SBI Group.

SBI VC Trade confirmed in a December 2 statement that an agreement had been reached to acquire all of DMM Bitcoin’s assets as part of its liquidation process. The transfer, which is expected to be completed by the end of the first quarter of 2025, will include customer accounts and assets held by the exchange. Details on specific transfer methods and dates will be disclosed in future announcements.

As part of the transition, the company plans to expand its services by offering 14 crypto spot trading options currently available on the DMM Bitcoin platform. The two companies will continue to discuss the process of transferring assets and accounts.

DMM Bitcoin was hacked on May 31, 2024, resulting in the theft of 4,502.9 BTC, worth approximately $305 million at the time. The exchange confirmed the breach, announcing that it had taken steps to prevent further unauthorized withdrawals by suspending all spot purchase transactions.

Furthermore, it assured its customers that it would reimburse the lost funds by acquiring an equivalent amount of Bitcoin with the support of its associated companies. To this end, DMM Bitcoin secured a 5 billion yen loan in June and outlined plans to raise an additional 50 billion yen to fulfill its obligations.

Failed recovery efforts

Despite recovery efforts, continued service restrictions and growing challenges forced the exchange to abandon its plans and ultimately decide to close its operations.

In July, the attackers, likely the infamous Lazarus Group, were tracked laundering more than $35 million in stolen funds through Huione Garantie, an online marketplace that reportedly became a hub of illicit activity.

PeckShieldAlert also reported that an additional 500 BTC was transferred across multiple wallets in August. However, all attempts to recover the stolen funds have failed.

The DMM Bitcoin hack is the second largest digital asset breach in Japan, after the $534 million Coincheck attack in 2018.

The Coincheck incident was primarily attributed to the exchange’s inadequate security practices. Most of the stolen tokens were stored in a single online hot wallet secured by a single private key rather than in offline cold storage or secure multi-signature wallets as recommended by their issuer.