DMM Bitcoin, one of the country's largest exchanges, has suffered a staggering loss of 48 billion yen ($305 million) in Bitcoin due to a security breach. The incident, discovered on May 31, 2024, revealed the unauthorized leakage of 4,502.9 BTC from a DMM Bitcoin wallet, prompting the exchange to temporarily suspend several services to address the situation and protect customer assets.

According to local media reports, DMM Bitcoin detected an unauthorized access incident on May 31, resulting in the illegal leakage of BTC, equivalent to approximately 48.2 billion yen. To prevent further unauthorized outflows, the exchange took swift measures. In response to the security breach, DMM Bitcoin suspended screening for new account openings, processing cryptocurrency withdrawals, spot trading buying orders (with only selling orders accepted), and new open positions for leveraged trading (with only settlement orders accepted).

To reassure affected customers, DMM Bitcoin issued a statement emphasizing its commitment to addressing the loss. The exchange intends to procure the equivalent amount of leaked BTC with support from its group companies. Japanese law mandates the separation of crypto assets held by exchanges from customer assets, ensuring additional protection for users. This measure provides a safety net, guaranteeing that customers' entire BTC holdings will be fully protected.

DMM Bitcoin's security page highlights the precautions taken to safeguard customer assets. Japanese yen deposited by customers is managed separately from the exchange's funds in a designated account. In terms of crypto assets, the exchange physically segregates its holdings from customer holdings. The exchange conducts daily audits of customer assets to increase security and uses cold wallets to store over 95% of customer funds. However, it is suspected that the leaked BTC may have originated from hot wallets and isolated cold wallets.

In a blog post addressing the incident, DMM Bitcoin assured affected customers that it would procure the equivalent amount of leaked BTC and guarantee full compensation with the assistance of its group companies. This incident serves as a stark reminder of the importance of security measures in the cryptocurrency exchange industry. The DMM Bitcoin hacking incident follows the high-profile 2018 hack of Coincheck, in which approximately 58 billion yen worth of NEM was stolen. Such incidents have prompted stricter regulations by Japan's Financial Services Agency and increased focus on security measures within the industry.

As of the current writing, the BTC price is $67,400, displaying a recent downward movement in the past few hours. This decline has led to a 1.5% decrease in its value within 24 hours. The incident has raised concerns about the security of cryptocurrency exchanges and the need for robust measures to protect customer assets. DMM Bitcoin's commitment to procuring the leaked BTC and guaranteeing full compensation to affected customers is a positive step towards restoring trust in the industry. The incident serves as a reminder of the importance of prioritizing security and taking proactive measures to prevent such breaches in the future.