Japanese DMM exchange suspends withdrawals after $305 million Bitcoin theft

Japan-based crypto exchange DMM confirmed a hack resulting in the theft of 4,502.9 BTC, valued at approximately 48 billion yen ($305 million).

In a May 31 statement, the exchange reported detecting an “unauthorized leak of Bitcoin” from its wallet around 1:26 pm Tokyo time on Friday, May 31, 2024.

Blockchain analytical firm Elliptic said the theft would be the eighth-largest crypto heist of all time and the largest since the $477 million hack suffered by the collapsed FTX exchange in November 2022.

Service suspension

Following the discovery, DMM promptly suspended crypto withdrawals and restricted all spot-buying activities to prevent further losses. The firm also warned that fiat Japanese yen withdrawals might face delays.

The exchange assured affected users that stolen funds would be reimbursed, although it did not provide a specific repayment timeline. DMM stated:

“Please rest assured that all of your Bitcoin (BTC) deposits will be fully guaranteed, as we will procure the equivalent amount of BTC that was leaked with support from our group companies.”

Additionally, DMM did not specify when its services would resume but indicated that further information would be provided in a separate announcement.

Speculation within the crypto community suggests that the breach may have compromised all customer BTC holdings, affecting hot and cold wallets. However, the full extent of the breach remains unclear as of press time. Under local regulations, DMM is required to store at least 95% of customer crypto in cold wallets.

Meanwhile, this incident ranks among the largest crypto exchange hacks in Japan. In 2018, Coincheck suffered a theft of 58 billion yen ($533 million) in crypto. In 2014, the bankrupt Mt. Gox exchange lost over 140,000 BTC belonging to its customers.

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