SBI VC Trade to Acquire DMM Bitcoin Following Devastating Hack

The Japanese cryptocurrency exchange DMM Bitcoin has decided to cease recovery efforts following a major hack earlier this year, opting instead to shut down operations and transfer its assets to SBI VC Trade, a trading company owned by SBI Group.

According to Nikkei Asia, the sale is set to finalize by March 2025. SBI VC Trade confirmed the agreement in a statement on December 2, highlighting plans to acquire all assets of DMM Bitcoin as part of its liquidation process.

Expanded Trading Pairs and Seamless Transition

As part of the acquisition, SBI VC Trade aims to enhance its cryptocurrency offerings by integrating 14 trading pairs currently exclusive to DMM Bitcoin.

The expansion is expected to be completed before transferring customer accounts and assets, ensuring a smooth transition for affected users.

Fallout from the May Hack

The decision to shut down marks a surprising turn of events for DMM Bitcoin, which had initially pledged to recover from the May 30 hack. The breach resulted in the loss of over 4,500 Bitcoin, valued at approximately $308 million at the time, making it Japan’s second-largest crypto theft after the $534 million Coincheck hack in 2018.

Despite securing a 5 billion yen loan and committing to raise an additional 50 billion yen through group companies and subordinated loans, the exchange struggled to recover the stolen assets. These efforts were intended to reimburse affected customers, but the inability to recoup funds has ultimately led to its closure.

Suspected Involvement of Lazarus Group

The stolen funds have reportedly been linked to the notorious Lazarus Group, a hacking entity believed to be based in North Korea. In July, the attackers were observed laundering portions of the stolen cryptocurrency through Huione Guarantee, an online platform known for illicit activities. Further movement of 500 BTC across multiple wallets was detected in August, adding to the challenges of asset recovery.

Broader Impact on Asian Crypto Exchanges

DMM Bitcoin’s closure follows a troubling trend for cryptocurrency exchanges in Asia. Earlier in 2024, Indian-origin exchange WazirX shut down after a $235 million hack targeting its hot wallet. Similarly, over a dozen South Korean exchanges ceased operations due to regulatory non-compliance, while Singapore-based Fairdesk cited regulatory hurdles before announcing its closure in October.

With DMM Bitcoin set to wind down, the industry faces mounting pressure to bolster security measures and regulatory compliance to prevent further setbacks.

Stay tuned for updates on the transition to SBI VC Trade and its expanded cryptocurrency offerings.