DMM Bitcoin Closes After Hacker Hacked, 4,500 Bitcoins Lost
JAKARTA - A Japanese crypto trading platform, DMM Bitcoin, officially stopped operating after experiencing a massive hack that resulted in the loss of 4,500 Bitcoins, equivalent to more than US$158 million (Rp2.49 trillion). This decision was taken after the failure to restore the platform service due to the huge impact of the attack.
To reduce negative impacts for customers, DMM Bitcoin announced that it will move all assets, including cryptocurrencies and Japanese yen, to SBI VC Trade, its subsidiary SBI Holdings. The asset transfer process is expected to be completed before the end of fiscal year, which ends in March 2025.
However, there are some restrictions imposed, such as unsolvable margin positions cannot be moved to new platforms until customers close their positions and pay related costs.
The hack also revealed a weakness in risk management implemented by DMM Bitcoin. This prompted the Japan Financial Services Agency (FSA) to provide an improvement order in September 2024.
Although Bitcoin DMM received 55 billion yen (Rp 5.9 trillion) from its parent company, DMM.com, to cover customer losses, the decision to close operations was still taken to avoid further losses for users.
The Bitcoin DMM hacking incident shows the importance of regulatory oversight of crypto trading platforms. In recent years, hacking and other security concerns have often overshadowed the industry. In addition, protection against investors and customers should also be a major concern.