The exchange reported that 4,502.9 BTC, valued at $306 million, was stolen in an unauthorized outflow of funds. In an effort to reassure users, DMM Bitcoin committed to guaranteeing the full amount of their deposits by procuring an equivalent amount of bitcoin.
According to an English translation of a statement posted on the company’s website on Wednesday, DMM Bitcoin detailed a plan to secure funds for the bitcoin procurement, supported by its parent company.
While cryptocurrency companies often face hacks and cyberattacks, losses of this magnitude are rare. DMM Bitcoin has assured customers that it will replace the lost bitcoin deposits with the assistance of other group companies.
As of June 3, DMM Bitcoin had secured 5 billion yen ($32 million) through borrowing. The company plans a further capital increase of 48 billion yen ($307.6 million) on June 7, followed by subordinated borrowing of 2 billion yen ($12.8 million) on June 10. This brings the total funds to $352.4 million.
The exchange stated it will proceed with procuring the equivalent amount of bitcoin while ensuring minimal market impact. DMM Bitcoin also apologized for the inconvenience and concern caused to its customers and confirmed that an investigation into the hack is ongoing.
The company did not provide details on how the incident occurred or if an external party was involved, but stated it is investigating and has restricted some services in response.
Japan’s Financial Services Agency has demanded that the company conduct a thorough investigation into the incident, according to public broadcaster NHK.
Tom Robinson, chief scientist and co-founder of the crypto research firm Elliptic, commented that if DMM’s loss is confirmed to be theft, it would rank as the eighth largest crypto theft ever, based on exchange rates at the time of the incident. This would also be the largest crypto theft since the $477 million hack suffered by FTX in November 2022.
DMM’s loss is the second largest in the region, following the $530 million theft from the Japanese crypto exchange Coincheck in 2018. Last year, around $1.7 billion was stolen from various cryptocurrency platforms, as reported by crypto research firm Chainalysis.
The 2018 Coincheck hack, one of the biggest in the industry’s history, resulted in the loss of about $534 million worth of NEM (XEM) from its hot wallet. The incident had significant repercussions, damaging Coincheck’s reputation and exposing its inadequate security measures. The company, a subsidiary of Monex Group, spent several weeks attempting to identify the attackers and understand the breach.
