Japanese DMM exchange suspends withdrawals after $305 million Bitcoin theft

Japan-based crypto exchange DMM confirmed a hack in which 4,502.9 BTC worth approximately 48 billion yen ($305 million) were stolen.

In a statement on May 31, the exchange reported that it had detected an “unauthorized Bitcoin leak” from its wallet on Friday, May 31, 2024, at around 1:26 p.m. Tokyo time.

Blockchain analytics firm Elliptic said the theft was the eighth-largest crypto heist of all time and the largest since the November 2022 hack of collapsed FTX exchange, which involved $477 million.

Suspension of service

Following the discovery, DMM immediately suspended crypto withdrawals and restricted all spot buying activities to prevent further losses. The company also warned that fiat withdrawals in Japanese yen may face delays.

The exchange assured affected users that they would be reimbursed for the stolen funds, but did not provide a specific repayment timeline. DMM stated:

“Rest assured that all your Bitcoin (BTC) deposits are fully secured as we will procure the equivalent amount of leaked BTC with the assistance of our group companies.”

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

Speculation within the crypto community suggests that the breach may have compromised all of customers’ BTC holdings and affected both hot and cold wallets. However, the full extent of the breach was unclear at press time. According to local regulations, DMM is required to keep at least 95% of customers’ cryptocurrencies in cold wallets.

This incident is now one of the largest hacker attacks on crypto exchanges in Japan. In 2018, 58 billion yen (533 million dollars) worth of cryptocurrencies were stolen from Coincheck. In 2014, the bankrupt exchange Mt. Gox lost over 140,000 BTC from its customers.

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Liam “Akiba” Wright

Senior Editor at CryptoSlate

Liam, also known as “Akiba,” is a reporter, editor, and podcast producer at CryptoSlate. He believes that decentralized technology has the potential to bring about widespread positive change.