DMM Bitcoin To Shut Down After Suffering $320M In Losses Due To Hack

Japanese cryptocurrency exchange DMM Bitcoin has announced its closure following a massive security breach in May that resulted in losses of over $300 million.

The exchange confirmed on Monday that its assets will be acquired by SBI VC Trade, the crypto arm of Japan’s SBI Group, as part of a planned transition.

DMM Bitcoin revealed on 2 December 2024, that customer accounts and custodial assets will be transferred to SBI VC Trade by March 2025. However, leveraged trading positions will not be included, and all such positions must be closed before the transfer.

“Under this agreement, customer deposit assets (in Japanese yen and crypto assets) in accounts opened on DMM Bitcoin will be transferred to us as soon as March 2025,” the firm wrote.

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DMM Bitcoin Loses 4.5K BTC In Hack

DMM Bitcoin decision to shut down its platform comes after the theft of 4,502 Price Volume in 24h Price 7d Buy Now! , valued at approximately $306 million at the time of the attack.

In response to the breach, DMM Bitcoin raised 55 billion yen (around $365 million) in June through various financial measures, including loans and a capital increase. Despite these efforts, the exchange decided to cease operations after transferring its assets.

SBI VC Trade stated that it would begin offering spot trading for 14 cryptocurrencies currently available on DMM Bitcoin before the asset handover is completed.

In July, blockchain investigator ZachXBT revealed that approximately $35 million of the stolen cryptocurrency had been funneled through Huione Guarantee, an online marketplace notorious for crypto scams.

“It is suspected that Lazarus Group is behind the hack due to similarities in laundering techniques and offchain indicators,” the researcher said at the time. 

1/4 So far in July 2024 more than $35M from the $305M DMM Bitcoin hack has been laundered to the online marketplace Huione Guarantee

It is suspected that Lazarus Group is behind the hack due to similarities in laundering techniques and off chain indicators. pic.twitter.com/g1ndlttBll

— ZachXBT (@zachxbt) July 14, 2024

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Japan’s FSA Prposes Flat 20% Tax Rate On Crypto Gains

In September, Japan’s FSA proposed a flat 20% tax rate on crypto gains, aligning digital assets with traditional financial assets like stocks.

The proposal came as part of the FSA’s tax reform request submitted on 30 August 2024. It aims to simplify the treatment of crypto investments by categorizing them similarly to traditional financial (TradFi) assets.

Japan’s crypto industry has long advocated for reforms to reduce the tax burden on digital assets. In 2023, the Japan Blockchain Association (JBA) pushed for a flat 20% tax rate and a loss carryover provision to stimulate growth in the sector.

However, previous efforts have not led to significant policy changes.

Currently, Japanese crypto holders face steep tax rates, with individuals earning more than 40 million yen ($268,000) paying up to 55% on their crypto profits.

Corporate crypto holders also face a flat 30% tax on their holdings at the end of the financial year, regardless of whether they have sold any assets for profit.

EXPLORE: Crypto Tax Guide 2024

Disclaimer

Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
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