Crypto Exchange DMM Bitcoin to Raise $320 Million After Exploit

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Key Takeaways

  • DMM Bitcoin assured users that they will be fully reimbursed for their stolen funds.
  • A capital increase of $308 million is scheduled for June 7th

DMM Bitcoin, a leading Japanese cryptocurrency exchange, announced its plan to compensate customers for a recent loss of bitcoin. The company will raise 55 billion yen ($320 million) to replenish funds stolen in an unauthorized outflow detected on May 31st. The outflow amounted to approximately 48.2 billion yen ($300 million) worth of bitcoin.

DMM Bitcoin assured users that they will be fully reimbursed for their stolen funds. The exchange plans to procure an equivalent amount of bitcoin from its parent company, DMM.com, to recover the lost cryptocurrency. DMM Bitcoin said it will minimize the impact of these purchases on the overall cryptocurrency market.

The cause of the unauthorized outflow remains under investigation. In response to the hack, Japan’s Financial Services Agency has mandated the company investigate the breach and take measures to safeguard customers from potential damages

DMM Bitcoin deeply apologized for the inconvenience caused to its customers. They pledged to continue investigating the incident and will promptly share any new information with the public.

To finance customer compensation, DMM Bitcoin has secured funding through a series of transactions. The exchange acquired a loan of 5 billion yen ($32 million) on June 3rd. A capital increase of 48 billion yen ($308 million) is scheduled for June 7th.

An additional 2 billion yen ($12.8 million) will be secured through subordinated debt financing on June 10th. This financial support from DMM.com ensures DMM Bitcoin has the necessary funds to “guarantee customers’ Bitcoin holdings.” DMM exchange launched in January 2018  is owned by the e-commerce conglomerate DMM Group.

DMM Bitcoin hack is one of the biggest hacks witnessed in recent years. The latest development comes amid the crypto space which has been increasingly plagued with hacks and exploits in recent years. In November 2023, the Poloniex crypto exchange lost over $100 million when an attacker gained control of its private key.

According to a web3 security firm called DeFi, hackers made approximately $2 billion in crypto through various scam thefts in 2023.

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Saniya Raahath
Saniya Raahath

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