Japan’s DMM Bitcoin Exchange Liquidated and Acquired

Tags: hack

Japan’s DMM Bitcoin exchange was liquidated and subsequently acquired by SBI VC Trade (a subsidiary of SBI Holdings) following a previous hack resulting in a $320 million loss.

This article analyzes the incident where the Japanese cryptocurrency exchange, DMM Bitcoin, was attacked, resulting in a $320 million loss and ultimately leading to its liquidation. We will examine the causes, consequences, and lessons learned from this event, and assess its impact on the global crypto market and particularly Japan.

1. THE SHOCKING HACK: $320 MILLION VANISHES

In May 2024, the global crypto community was stunned by news of a large-scale cyberattack on Japan’s DMM Bitcoin exchange. The hack resulted in the theft of 4,500 Bitcoin (BTC), equivalent to $320 million USD at the time. This is the second-largest hack in Japanese history, surpassed only by the 2018 Coincheck exchange incident, which resulted in a $530 million loss.

2. CONSEQUENCES OF THE HACK

The hack caused significant damage, including:

• Massive Financial Loss: $320 million USD is a substantial sum for an exchange, putting DMM Bitcoin in severe financial distress.
• Loss of Customer Trust: Approximately 450,000 customer accounts were affected, causing a significant loss of trust in the exchange. As of March 2025, the total estimated customer losses amounted to 96.2 billion Yen.
• Negative Impact on Japan’s Crypto Market Reputation: The hack raised concerns about the security and reliability of cryptocurrency exchanges in Japan.

3. LIQUIDATION PROCESS AND ASSET TRANSFER

Following the hack, DMM Bitcoin attempted remediation but was unsuccessful. Ultimately, the exchange decided to liquidate and transfer its assets to SBI VC Trade, a subsidiary of SBI Holdings.

SBI VC Trade Acquires DMM Bitcoin

The transfer was expected to be completed around March 2025. SBI VC Trade, with 700,000 accounts, was expected to pay approximately 3-5 billion Japanese Yen to acquire DMM Bitcoin’s assets, thereby increasing its customer base.

This event highlights the ongoing challenges in Japan’s crypto industry, particularly following government crackdowns on fraud in previous years. The acquisition price reflects the high-risk assessment and difficulty in valuing assets after such a significant hack.

4. CAUSES AND SECURITY ISSUES

Although DMM Bitcoin claimed to use a “cold wallet” system, authorities discovered security vulnerabilities within the exchange’s system. The hack is believed to have resulted from server compromise and the loss of private keys.

According to blockchain researcher ZachXBT, approximately $35 million of the stolen cryptocurrency was transferred to Huione Guarantee, an online marketplace and hotspot for cryptocurrency scams. ZachXBT also suspects the Lazarus Group was behind the attack, based on similarities in money laundering techniques and off-chain indicators.

This incident demonstrates:

• The use of a “cold wallet” system is not sufficient to guarantee absolute security. Comprehensive security measures are still necessary.
• The security systems of many cryptocurrency exchanges still have numerous vulnerabilities that are easily exploitable.

5. IMPACT ON THE GLOBAL AND JAPANESE CRYPTO MARKET

The DMM Bitcoin hack not only damaged the exchange itself but also negatively impacted the entire cryptocurrency market, particularly in Japan.

The event further increased concerns about the security and reputation of cryptocurrency exchanges. Many investors may lose faith in the market and withdraw their funds.

Besides DMM Bitcoin, 2024 witnessed several other cryptocurrency exchange hacks globally, such as WazirX (India), BingX (Singapore), and BtcTurk (Turkey). These hacks demonstrate that the crypto market still faces significant cybersecurity challenges.

6. LESSONS LEARNED AND CONCLUSIONS

The DMM Bitcoin hack is a costly lesson for both crypto exchanges and investors. Exchanges need to invest more heavily in cybersecurity, upgrade their security systems, and regularly audit to detect and patch vulnerabilities.

Investors should also be more cautious when choosing an exchange, thoroughly researching the exchange’s security system before depositing funds. Diversification of investments is also a measure to mitigate risk.

Conclusion: The DMM Bitcoin incident demonstrates that the rapid growth of the crypto market will also bring significant security risks. Cooperation between exchanges, regulators, and the community is essential to enhance security and protect users. Transparency and responsibility from exchanges are also crucial in maintaining customer trust.

Exchange	Incident	Loss (USD)
DMM Bitcoin (Japan)	Hack	$320 million
WazirX (India)	Hack	$235 million
BingX (Singapore)	Hack	$52 million
BtcTurk (Turkey)	Hack	$55 million

In summary, the DMM Bitcoin hack was an unfortunate event with severe consequences. However, valuable lessons on cybersecurity in the crypto market have been learned, and better preparation is needed to face future challenges. This incident underscores the need for a more robust regulatory system for crypto exchanges to protect user rights and market stability.