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Japan: DMM Bitcoin to Raise $320 Million to Buy BTC

June 5, 2024

Last week, Japanese crypto exchange DMM Bitcoin, fell victim to a hack - likely instigated by the compromise of its private key - that drained more than $300 million worth BTC from its wallet. After confirming the hack, the exchange assured that all user deposits “will be fully guaranteed.”

Now, in what is the latest development, DMM Bitcoin is looking to raise 50 billion yen [approx. $320 million]. The proceeds will be used to buy BTC to compensate the customers.

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According to the official statement, the DMM team asserted that they will “take care” of ensuring that the Bitcoin market does not get affected with its planned purchase. In fact, BTC held by users will be guaranteed by looping in "group companies." Here, it is worth noting that DMM Bitcoin is a subsidiary of DMM Financial. The latter, on its part, is associated with the conglomerate DMM Group.

Earlier this week, DMM Bitcoin secured a 5 billion yen loan. It is set to raise 48 billion yen on Friday, June 7, via a "capital increase," the statement pointed. By Monday, June 10, it will add 2 billion yen via subordinated loans.

The aforementioned hack that took place last week was one of the largest in crypto history. In fact, Chainalysis pointed out that this hack was the biggest since December 2022, and the seventh heftiest in history.

Japan’s regulatory body, the Financial Services Agency, has asked DMM Bitcoin to report on the reasons and compensation policies for customers. A probe into the cause of the “unauthorized outflow” is being undertaken by the exchange to demystify and confirm what actually caused hack. Meanwhile, Japan’s Finance Minister, Shunichi Suzuki, has assured citizens that the government will work towards preventing similar crypto exchange security breaches in the future.

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