DMM Bitcoin, a Japanese cryptocurrency exchange, will shut down operations due to a security compromise that caused a $320 million loss in Bitcoin. The event, which occurred in May, resulted in the theft of over 4,500 Bitcoin owing to a private key compromise.
The exchange has chosen to discontinue all attempts to improve its operations. Instead, it plans to transfer client assets to SBI VC Trade, an SBI Group affiliate, by March 2025. A recently signed deal will transfer all accounts, including Japanese yen and cryptocurrency holdings, to SBI VC Trade.
DMM Bitcoin initially guaranteed clients that their deposits were secure and promised to compensate users by obtaining an equivalent quantity of Bitcoin with the assistance of its group firms. However, the exchange eventually concluded that a full recovery was not possible.
The hack was the second-largest in the region, coming after the $530 million Coincheck incident in 2018. Investigators discovered that the notorious Lazarus Group may have laundered a portion of the stolen assets, estimated at $35 million, through online marketplaces.
The Japanese e-commerce behemoth DMM Group, which founded DMM Bitcoin in 2018, has announced the end of its Seamoon Protocol, a Web3 gaming and content effort. Rapid developments in the bitcoin sector halted the project.
The decision to shut down follows a year of increased security vulnerabilities on centralized exchanges. Notable occurrences in 2024 include a $235 million hack of India’s WazirX exchange, a $52 million breach of Singapore’s BingX platform, and a $55 million exploit on Turkey’s BtcTurk hot wallet.
As DMM Bitcoin prepares to cease operations, it provides yet another illustration of centralized exchanges’ fragility in the ever-changing cryptocurrency world.
