Closure of Japan’s DMM Bitcoin Exchange Announced

Due to a security incident resulting in a loss valued at $320 million from a private key intrusion in May, DMM Bitcoin, a cryptocurrency exchange out of Japan, is poised for closure as reported by Nikkei Asia. The substantial loss of more than 4,500 Bitcoin has left the exchange unable to recuperate, citing statements from local news sources.

According to coverage, plans are afoot for DMM Bitcoin to transition its clients’ funds to SBI VC Trade, a trading platform under the SBI Group, around the month of March. Such measures appear to confirm that the exchange is ceasing attempts to reform its operations.

The Hack Precipitating DMM Bitcoin’s Closure

The fateful hack unfolded on May 30, with perpetrators breaching DMM Bitcoin’s system defenses and illicitly extracting Bitcoins from one of the wallets. In the wake of the incident, the exchange reassured its clientele about the full guarantee of their deposits, at the same time freezing withdrawals and new registrations as it sought to secure alternative funds from affiliated entities. The gravity of the loss, however, has since made a recovery unfeasible.

This heist ranks as the second most substantial in Japan’s cryptocurrency annals, trailing only the $530 million raid on Coincheck in 2018. Blockchain sleuth ZachXBT observed in July that $35 million of the purloined assets had been moved through the digital trading post Huione Guarantee. ZachXBT suspects that the Lazarus Group from North Korea might be the culprits, given the laundering strategies and additional associated evidence at play.

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

ZachXBT further detailed the money laundering trail for the capital extracted from DMM Bitcoin as follows: 1) Deposit BTC from the hack to a mixer. 2) Withdraw BTC post-mixing. 3) Convert the funds from Bitcoin to Ethereum or Avalanche using services like THORChain, Threshold, or the Avalanche bridge. 4) Change into USDT, then send it through Tron with the help of SWFT. 5) Finally, transfer the USDT to Huione.

Also Read: Report Claims Satoshi Nakamoto’s Genesis Wallet With 1.1M BTC Partially Breached