DMM Bitcoin announces it will raise approximately 55 billion yen to fully guarantee the amount of illegally leaked bitcoins

DMM Bitcoin , a Japanese virtual currency exchange, announced on May 31, 2024 that 4,502.9 BTC (approximately 48.2 billion yen) worth of Bitcoin had been illegally leaked. As the Financial Services Agency issued a report request order to DMM Bitcoin under the Payment Services Act, requesting an investigation into the cause and protection of customers, DMM Bitcoin revealed plans to raise approximately 55 billion yen to guarantee the full amount owed to customers.

[IMPORTANT] Report on the illegal leakage of crypto assets (Second report) - DMM Bitcoin (2024/06/05)
https://bitcoin.dmm.com/news/20240605_01

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DMM Bitcoin is a subsidiary of the DMM Group, which operates a diversified business centered on video distribution services, and at the time of writing, handles 38 types of virtual currencies. At around 13:26 on May 31, DMM Bitcoin detected a large amount of Bitcoin being illegally leaked from its wallet. In a statement, it was reported that the total amount leaked reached 4,502.9 BTC. According to blockchain analysis company Chainalysis, this is the seventh largest virtual currency hack to date.

In response to this unauthorized leak, DMM Bitcoin has restricted the use of some of its services, such as 'screening new account openings,' 'processing cryptocurrency withdrawals,' 'buying orders for spot trading,' and 'new open positions for leveraged trading.' At the same time, the company has pledged in a statement to procure the equivalent amount of BTC leaked with support from group companies and to fully guarantee the amount.

In a second report on June 5th, DMM Bitcoin reiterated its promise that 'As stated in the first report, we will guarantee the entire amount of Bitcoin (BTC) held by customers by procuring the amount of Bitcoin (BTC) that was leaked with support from group companies,' and announced plans to secure the financial foundation to guarantee the entire amount.

DMM Bitcoin announced that the funding support from group companies will be implemented according to the following schedule. They have already raised 5 billion yen through borrowing on June 3rd, and plan to raise 48 billion yen through a capital increase on June 7th, and 2 billion yen through subordinated borrowing on June 10th. The total amount to be raised will be 55 billion yen.

DMM Bitcoin says it will proceed with the purchase of the Bitcoin equivalent to the amount leaked, while taking care not to affect the market.

Tomoya Hasegawa , an analyst at cryptocurrency exchange Bitbank , said it would be difficult for outsiders to evaluate DMM Bitcoin's fundraising efforts because they involve a wide range of companies belonging to the DMM Group.

The investigation into the cause of the unauthorized leak is still ongoing at the time of writing.