DMM announced it has launched an investigation to identify the perpetrators of the hack, which resulted in thousands of bitcoins being siphoned from the exchange’s wallet.
By Chimamanda U. Martha
Edited by Julia Sakovich
Updated
3 mins read
Japanese cryptocurrency exchange DMM Bitcoin is planning to raise 50 billion yen, approximately $320 million, to purchase Bitcoin (BTC) after experiencing a security breach over the weekend.
The fundraising effort aims to compensate victims affected by the cyberattack, which exploited a vulnerability on DMM’s platform. On Friday, May 31, hackers managed to steal over 4,503 BTC, valued at around $320 million at the current market price of $71,000.
The Japanese exchange has assured that it will proceed cautiously with the planned bitcoin purchase to avoid impacting the market.
In a statement on Wednesday, DMM announced it has launched an investigation to identify the perpetrators of the hack, which resulted in thousands of bitcoins being siphoned from the exchange’s wallet.
The company noticed the unauthorized transfer of 4,503 BTC at around 1:30 PM local time last week. According to blockchain analytics firm Chainalysis, this incident ranks as the seventh-largest crypto hack since the inception of the market in 2009.
To prevent further attacks, the company suspended all activities on the platform, including deposits and withdrawals. Once the coast was clear, DMM released a statement assuring users that it would repay all the affected victims.
“Please be assured that we will procure the equivalent amount of BTC equivalent to the outflow with the support of the group companies and guarantee the full amount,” said DMM.
Due to the severity of the breach, Japan’s Financial Services Agency (FSA) has intervened. The FSA has requested DMM to provide a detailed report on the origins of the hack and outline compensation plans for affected customers.
Additionally, the country’s Finance Minister Shunichi Suzuki has promised that the Japanese government will work on providing stringent measures to prevent such attacks on any crypto exchange operating in the country.
Meanwhile, with the crypto industry headed towards mainstream adoption, the market has become a favorite playground for hackers looking to enrich themselves at the expense of investors.
The industry has experienced a series of high-profile attacks in the past, starting with the 2014 hack of Mt. Gox exchange, another Japanese digital asset trading platform, which lost around $470 million worth of bitcoins to hackers.
Four years after what seemed like the highest breach at the time, another Japanese exchange Coincheck suffered a massive exploit which resulted in the loss of more than $533 million worth of different cryptocurrencies, primarily consisting of NEM tokens.
The exchange was blamed for the hack due to its perceived weak security measures. According to reports, the company stored most of its clients’ NEM in a single online wallet protected by only one private key instead of using safer offline wallets or multi-signature wallets.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
Chimamanda is a crypto enthusiast and experienced writer focusing on the dynamic world of cryptocurrencies. She joined the industry in 2019 and has since developed an interest in the emerging economy. She combines her passion for blockchain technology with her love for travel and food, bringing a fresh and engaging perspective to her work.
