DMM Bitcoin, a major cryptocurrency exchange in Japan, has announced it will cease operations following a massive hack that resulted in the loss of over $305 million in assets. The exchange, which had already restricted services like withdrawals and new buy orders for spot crypto assets after the hack, will transfer its customer accounts and remaining assets to SBI VC Trade, a rival trading platform, in March 2025.
The announcement, made on December 2, comes after the exchange suffered a breach in May 2023, when hackers drained more than 4,500 BTC (approximately $305 million at the time). The stolen Bitcoin was transferred through various addresses, making it difficult for authorities to trace the culprits or recover the funds. This hack is now considered the second largest in Japan’s history, after the infamous Coincheck hack in 2018, which saw $534 million stolen.
Difficulties in Recovering Stolen Funds
DMM Bitcoin had faced severe operational challenges since the hack, with the company suspending essential services such as withdrawals and buy orders for spot crypto assets. In a public statement, the exchange acknowledged that allowing the situation to continue would harm its customers and reiterated its apology for the prolonged disruptions.
Although the identity of the hacker remains unknown, some experts speculate that the Lazarus Group, a notorious North Korean hacking group, may be involved. The stolen funds appear to have been laundered through Huione Guarantee, a Cambodian payments firm with a history of facilitating illegal transactions.
SBI VC Trade to Take Over Operations
In response to the hack, DMM Bitcoin has decided to transfer its operations to SBI VC Trade. The acquisition will include the 14 crypto spot trading pairs currently managed by DMM Bitcoin. SBI VC Trade has stated that the transfer will occur before March 2025, with further details to be provided in an upcoming announcement. This move is expected to provide a smoother transition for customers who have been impacted by the hack.
DMM Bitcoin emphasized that the exact date of the asset and account transfer would be disclosed at a later time but reassured customers that the acquisition would ensure a seamless transition of their holdings.
A Turning Point for Japanese Crypto Exchanges
The closure of DMM Bitcoin highlights the growing security risks facing crypto exchanges, particularly in Japan, where regulatory scrutiny has been increasing in the wake of high-profile hacks. The incident also raises questions about the security measures in place at exchanges and the steps that need to be taken to prevent similar breaches in the future.
As DMM Bitcoin prepares to close its doors, the move to transfer assets to SBI VC Trade marks a significant shift in Japan’s cryptocurrency landscape, potentially strengthening SBI VC Trade’s position in the domestic market.
