The Japanese Exchange DMM Bitcoin Has Been Hacked. With 4,500 Bitcoins, It Is by Far the Largest Hack This Year.
With distressing regularity, a major exchange hack targets crypto exchanges, and like Godzilla and other monsters from the sea, hackers have a particular affinity for Japan.
This time, it hit the exchange DMM Bitcoin. Approximately 4,500 Bitcoins, equivalent to nearly 300 million euros, were stolen. The exchange reported on its website a few days ago that the Bitcoins had been siphoned off, and measures had been taken to prevent further outflows.
The data from a blockchain analyst shows that the Bitcoins were systematically divided into portions of 500 BTC and distributed to different addresses. The hacker is presumably initiating the money laundering process, which will involve numerous transactions and take months. During this period, the Bitcoins remain entirely off the market, and they will likely trickle back in gradually afterward.
In a press release, DMM Bitcoin promises that the damage will be fully compensated from the funds of the DMM Group. Trading will initially be limited, and withdrawals of Japanese yen are delayed.
The exchange DMM Bitcoin is a subsidiary of the DMM Group, a large Japanese internet company that operates the site DMM.com, among others. Here, it offers digital goods to more than 35 million customers. With DMM Bitcoin, it launched a crypto exchange under its brand in early 2018 that initially started with seven cryptocurrencies and 14 trading pairs. As one of the few exchanges that received a license from the Japanese Financial Services Agency (FSA), DMM likely enjoys a particularly reputable status.
With a loss of nearly 300 million euros, the DMM Group’s foray into the crypto world turns out to be a costly excursion. The amount makes the hack the largest so far this year. Although there is the usual plethora of crypto hacks, hitting an exchange, a dApp, or a wallet week after week, the losses typically remain in the single or double-digit million range.
Only the PlayDapp hack, with 290 million dollars, is of a similar magnitude to DMM. However, in that case, no Bitcoins or other real currencies were stolen; illegal PLA tokens were created through an exploit. The value only existed on paper, and the hacker was probably unable to realize even a fraction of it.
The DMM hack, on the other hand, resulted in a loss of 300 million dollars in hard Bitcoins. It almost doubled the cumulative damage from hacks this year, which analysts have estimated at 473 million dollars. The year is still long, and the path to a billion-dollar total is not far off.
Among the top 10 crypto hacks of all time, DMM also secures a ranking. Although the lists vary slightly, they usually lead with Ronin (Axie Infinity) and PolyNetwork, followed by a bridge to the BNB Chain. Fourth and fifth places are usually held by Coincheck (540 million dollars) and Mt. Gox (450 million) – both exchanges from Japan. DMM is likely to place somewhere between seventh and ninth, making the Land of the Rising Sun home to three of the top 10 exchange hacks.