Japan-based crypto exchange DMM confirmed a security breach resulting in the theft of 4,502.9 BTC, valued at approximately 48 billion yen ($305 million).

In a statement released on May 31, the exchange disclosed that it detected an unauthorized transfer of Bitcoin from its wallet at 1:26 pm Tokyo time on Friday, May 31, 2024.

According to blockchain analytics firm Elliptic, this theft ranks as the eighth-largest crypto heist in history and marks the largest incident since the collapse of FTX exchange, which lost $477 million in November 2022.

Service Suspension

Immediately after discovering the breach, DMM halted crypto withdrawals and restricted all spot-buying activities to prevent further losses. The exchange also cautioned that fiat Japanese yen withdrawals might experience delays.

DMM assured affected users that stolen funds would be reimbursed, although it did not specify a timeline for repayment. The exchange stated:

“Please be assured that all Bitcoin (BTC) deposits will be fully covered, as we will acquire an equivalent amount of BTC that was stolen with assistance from our group companies.”

DMM did not provide an exact timeline for when its services would resume but indicated that further updates would be provided in a subsequent announcement.

Community Speculation and Regulatory Context

There is speculation within the crypto community that the breach may have compromised all customer BTC holdings, including both hot and cold wallets. However, the full scope of the breach remains unclear at this time. Under local regulations, DMM is mandated to store at least 95% of customer crypto assets in cold wallets.

This incident ranks among the largest crypto exchange hacks in Japan's history. Previously, in 2018, Coincheck suffered a theft amounting to 58 billion yen ($533 million), while the bankrupt Mt. Gox exchange lost over 140,000 BTC belonging to its customers in 2014.