Key Points
- DMM Bitcoin suffered one of Japan’s largest crypto breaches in May 2023, losing over 4,500 Bitcoin (approximately $300-320 million) through a server breach and private key hack
- The exchange has reached an agreement to transfer all customer assets and accounts to SBI VC Trade, a subsidiary of SBI Group, with the transition expected to complete by March 2025
Hack Impact and Initial Response
In May 2023, DMM Bitcoin experienced a devastating security breach when attackers compromised its servers and accessed private keys, resulting in the unauthorized transfer of more than 4,500 Bitcoin from a single wallet. The incident ranks as Japan’s second-largest crypto exchange hack, trailing only behind the $530 million Coincheck breach of 2018. Following the attack, DMM Bitcoin immediately suspended withdrawals, new account registrations, and trading activities, while assuring customers that their deposits would be “fully guaranteed” through support from DMM Group companies.
Transfer Agreement Details
The exchange announced on Monday that it has reached a basic agreement with SBI VC Trade, the cryptocurrency arm of Japanese financial giant SBI Group, to transfer all customer accounts and custodial assets. According to the agreement, SBI VC Trade will take over both Japanese yen and crypto asset deposits from DMM Bitcoin accounts. However, the transfer excludes open positions in leveraged trading, which must be settled before the transition can proceed.
Business Wind-Down and Related Developments
The shutdown of DMM Bitcoin marks a significant shift for the company, which launched in January 2018 under the ownership of Japanese e-commerce conglomerate DMM Group. The exchange’s struggles have extended beyond the May hack, as evidenced by recent business decisions. In November, the company discontinued its Seamoon Protocol, a Web3 gaming and content platform that featured games and anime from its parent company. The company had also been working on a stablecoin project with platform Progmat, which was abandoned due to cited challenges in the business environment.
