Bitrabo Editorial
DMM Bitcoin, a major cryptocurrency exchange in Japan, recently experienced a significant setback with a reported loss of 48 billion yen ($305 million) in Bitcoin (BTC) due to a security breach.
The security breach occurred on May 31, 2024, leading to the unauthorized transfer of BTC from a DMM Bitcoin wallet. In response, several services have been temporarily halted to manage the situation and safeguard customer assets.
Security Breach at DMM Bitcoin
On May 31, DMM Bitcoin detected an unauthorized access incident resulting in the illegal transfer of 4,502.9 BTC, valued at about 48.2 billion yen. The exchange took immediate steps to prevent further unauthorized transactions.
Following the breach, DMM Bitcoin suspended new account registrations, cryptocurrency withdrawals, spot trading buying orders, and new leveraged trading positions. Only selling orders and settlement orders are currently being accepted.
To address customer concerns, DMM Bitcoin reassured users by stating that the equivalent amount of leaked BTC will be replenished with the help of its affiliated companies. The exchange guarantees full protection of all BTC holdings, in accordance with Japanese regulations that mandate the segregation of crypto assets from customer assets.
Learning from Past Incidents
DMM Bitcoin’s security measures include managing Japanese yen deposits in a separate account from the exchange’s funds and physically segregating crypto assets from customer holdings. Daily audits of customer assets, along with storing over 95% of customer funds in cold wallets, are part of their security protocols.
In a blog post addressing the incident, DMM Bitcoin affirmed its commitment to compensating affected customers by procuring the equivalent amount of leaked BTC through its group companies.
This hack at DMM Bitcoin echoes the notorious 2018 Coincheck hack, where approximately 58 billion yen worth of NEM was stolen. Such events have spurred Japan’s Financial Services Agency to impose stricter regulations and emphasize enhanced security measures across cryptocurrency exchanges.
Currently, the price of BTC stands at $67,400, witnessing a recent decrease over the past few hours resulting in a 1.5% drop in value within a day.
Image source: Shutterstock, chart from TradingView.com