Japanese crypto exchange DMM Bitcoin will be liquidated after a $320 million hack

What’s new? Japanese crypto exchange DMM Bitcoin has decided to abandon efforts to resume operations after a hacking attack in May and announced liquidation. The hacking of the server and the private key of one of the wallets resulted in the company losing 4500 bitcoins, which at the time was valued at $320 million. DMM then stopped withdrawals, trading, and opening new accounts.

Material by Nikkei

What else is known? DMM informed customers that it would purchase an equivalent amount in bitcoins to pay compensation. Japanese e-commerce conglomerate DMM Group, of which it is a member, will help the exchange with this.

DMM Bitcoin has entered into an agreement under which customer deposits in fiat and cryptocurrencies for further distribution will be transferred to the SBI VC Trade exchange within the SBI Group tentatively in March 2025.

In July, a blockchain analyst known by the nickname ZachXBT reported that about $35 million stolen from DMM Bitcoin was laundered through the Huione Guarantee marketplace. At the time, he speculated that the Lazarus hacker group from the DPRK was behind the exchange hack, as indicated by similar money laundering methods.

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DMM’s losses were the second largest in the country after the $530 million hack of crypto exchange Coincheck in 2018.

Hacks of centralized crypto exchanges (CEXs) have increased in 2024. In September, Singapore’s BingX was hacked for $52 million, in July India’s WazirX lost $235 million, and a hot wallet exploit of Turkey’s BtcTurk in June resulted in losses of $55 million.

At the moment, the bitcoin exchange Mt.Gox continues to refund users. It was the largest and one of the first crypto exchanges, but in 2014 it stopped working due to hacking. Payouts to users did not start until 10 years later. Last month, it transferred 30 371 BTC to two new addresses.

Also in November, a court ordered the liquidation of Korean lending platform Delio, which ceased operations last year due to the seizure of assets.

In October, former senior executive of the bankrupt crypto exchange FTX Caroline Ellison agreed to transfer almost all of her assets to the new managers to pay compensation to clients. Earlier, she pleaded guilty to stealing billions of dollars from users.