Japanese cryptocurrency exchange DMM Bitcoin has announced it will shut down its operations following a devastating hack in May 2024 that resulted in the loss of 4,502.9 bitcoins (BTC), valued at approximately $303 million at the time. The exchange has entered into an agreement with SBI VC Trade Co., a subsidiary of SBI Holdings, to transfer all user assets by March 2025.
The Hack and Its Aftermath
On May 31, 2024, hackers breached DMM Bitcoin's systems, making off with one of the largest single losses in crypto history. According to Immunefi, a platform tracking blockchain security incidents, this attack ranked among the top single-entity losses of 2024. In response, DMM Bitcoin immediately halted withdrawals and new spot purchase orders while vowing to reimburse affected users. The exchange announced plans to raise approximately 50 billion yen ($320 million) to cover the losses.
Asset Transfer to SBI VC Trade
On December 2, 2024, SBI VC Trade issued a statement confirming the acquisition of DMM Bitcoin's client accounts and assets. The agreement stipulates that SBI VC Trade will begin handling all 14 cryptocurrency spot trading pairs previously offered by DMM Bitcoin before the actual transfer takes place. Both parties will continue discussions on final terms, including the exact transfer timeline and method, with further announcements expected once finalized.
DMM Bitcoin explained that while investigations into the hack continue, prolonged restrictions on user operations would cause significant inconvenience. Therefore, the decision was made to transfer the entire business to SBI VC Trade, after which DMM Bitcoin will cease to exist. DMM Bitcoin is part of the DMM Group, a Japanese conglomerate with interests in e-commerce, finance, and energy.
Industry Impact and Regulatory Scrutiny
The incident has reignited concerns over the security of Japanese crypto exchanges. Japan's Financial Services Agency (FSA) had previously conducted on-site inspections of DMM Bitcoin and urged stronger security measures. The closure of DMM Bitcoin reduces the number of operating exchanges in Japan, further consolidating the market under larger players like SBI Holdings. SBI VC Trade is a fully regulated exchange, and its takeover is expected to ensure no additional losses for customers.
DMM Bitcoin continues to cooperate with law enforcement in tracing the stolen funds and has pledged to protect user interests throughout the transition process.