DMM Bitcoin to Raise $320 Million for Hack Victim Compensation

DMM Bitcoin to Raise $320 Million for Hack Victim Compensation

Japanese crypto exchange DMM Bitcoin has announced plans to raise $320 million to purchase Bitcoin and compensate victims of a recent hack. Details posted on the exchange’s website outline a comprehensive strategy to refund clients who lost Bitcoin (BTC) during the security breach.

DMM Bitcoin assured clients of full compensation, leveraging support from affiliated companies to restore the lost Bitcoin. “As initially reported, we will guarantee all of the Bitcoin (BTC) held by customers by obtaining support from group companies to replace the amount of Bitcoin (BTC) that was leaked,” the statement on their website read.

To fund this reimbursement, DMM Bitcoin secured a 5 billion yen loan on June 3. Additionally, the exchange plans to raise another 48 billion yen on June 7 through a “capital increase,” though specific details of this increase were not disclosed. Further financial bolstering includes 2 billion yen from subordinated loans scheduled for June 10.

The exchange emphasized that these financial maneuvers will not impact the overall pricing of the BTC market. While specifics of the hack were sparse, DMM Bitcoin promised a thorough investigation and future updates. “We are currently continuing our investigation into the cause of the unauthorized disclosure. We will provide a follow-up update as soon as details are known,” the website stated.

Hack Details

The hack occurred on May 31, resulting in the loss of over 4,500 Bitcoin, valued at approximately $308 million at the time and now worth around $319 million. DMM Bitcoin reported that all the Bitcoin was “leaked” from customers’ wallets. The hacker dispersed the stolen Bitcoin across 10 wallets, each containing batches of 500 BTC.

Initially, DMM Bitcoin claimed the ability to issue full refunds due to Japanese regulations, which mandate that virtual asset service providers maintain corporate liquidity separately from user funds. This compliance facilitated the company’s prompt assurance of complete restitution for affected customers.

In summary, DMM Bitcoin’s extensive fundraising efforts highlight its commitment to compensating victims of the hack and restoring client trust through regulatory compliance and financial transparency. The exchange’s proactive approach underscores the importance of robust security measures and swift, transparent responses to cyber threats in the cryptocurrency industry.

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