SBI VC Trade to Acquire Japan’s DMM Bitcoin Following May Hack

In a significant development within the cryptocurrency space, DMM Bitcoin, a Japanese crypto exchange, is ceasing efforts to relaunch its hacked platform and is instead moving forward with a sale of its assets to SBI VC Trade, a trading company owned by the SBI Group. The transaction, which is expected to be completed by March 2025, follows a hacking incident that severely compromised the exchange’s operations earlier this year.

The Hack and DMM Bitcoin’s Recovery Efforts

DMM Bitcoin suffered a major hack on May 30, 2024, when over 4,500 Bitcoin—worth approximately $308 million at the time—was stolen from one of the exchange’s wallets. This incident made it the second-largest hack in Japan’s crypto history, only trailing the infamous Coincheck hack of 2018, which involved the theft of $534 million. The hack sent shockwaves through the cryptocurrency community, drawing attention to the vulnerabilities within some exchanges.

In the aftermath, DMM Bitcoin launched an aggressive recovery plan, securing a 5 billion yen loan to aid in its efforts. The company pledged to raise an additional 50 billion yen through various means, including subordinated loans from its corporate group, with the goal of recovering a total of $320 million to repay affected customers. Despite these efforts, the stolen funds were not recovered, and by July, the exchange confirmed that part of the stolen Bitcoin had been laundered through Huione Guarantee, an online marketplace tied to illicit activities. In August, further stolen funds—500 BTC—were seen moving to other wallets, signaling the ongoing difficulties the platform faced in tracing and retrieving the assets.

Acquisition by SBI VC Trade

In response to the ongoing challenges, DMM Bitcoin decided to cease operations and liquidate its assets. According to a December 2 statement from SBI VC Trade, the two parties have reached an agreement for SBI VC Trade to acquire all of DMM Bitcoin’s assets, including its user base and customer accounts. As part of this acquisition, SBI VC Trade plans to introduce 14 new cryptocurrency trading pairs that were previously available on DMM Bitcoin but not supported by SBI VC Trade. This expansion is expected to be completed prior to the transfer of customer accounts and assets, ensuring a smooth transition for affected users.

The specific timeline for the transfer will be announced at a later date, but the deal is expected to be finalized by March 2025.

Broader Impact on Asian Exchanges

The closure of DMM Bitcoin follows a series of similar shutdowns within the broader Asian cryptocurrency market. In 2024, several exchanges faced operational difficulties and regulatory challenges, leading to suspensions or shutdowns of their services. For instance, WazirX, a prominent exchange originating in India, ceased operations in July after a $235 million hack of its hot wallet. In South Korea, more than a dozen exchanges shut down in response to stringent regulatory compliance issues. Similarly, the Fairdesk exchange, based in Singapore, announced plans to wind down its operations in October, citing regulatory hurdles as a key factor in its decision.

The acquisition of DMM Bitcoin by SBI VC Trade marks the latest in a series of significant developments in the cryptocurrency market. Despite efforts to recover from the May hack, DMM Bitcoin’s failure to retrieve the stolen funds led to its decision to shut down, making it another casualty in the volatile world of cryptocurrency exchanges. With the acquisition, SBI VC Trade will absorb DMM Bitcoin’s customers and expand its offerings, potentially consolidating its position in the competitive Japanese crypto market. However, this situation highlights the risks inherent in the industry, including security vulnerabilities, regulatory challenges, and the difficulty of recovering stolen assets. As the cryptocurrency landscape continues to evolve, such incidents may prompt further regulatory scrutiny and drive exchanges to adopt more robust security measures.