Japanese crypto exchange raises $320M to recover funds after major hack

DMM Bitcoin aims to compensate users for a $320 million loss following a major hack by raising equivalent funds.

DMM Bitcoin, a Japanese crypto exchange recently hacked for $320 million worth of Bitcoin (BTC), plans to raise 50 billion yen ($320 million) to compensate users for their losses. 

In a statement issued on June 5, DMM Bitcoin explained that it would recover stolen customer funds by procuring an equivalent amount of Bitcoin (BTC) from its group company, DMM.com. 

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Ongoing investigation

In the statement, DMM Bitcoin assured users it would “take care” to minimize market impact with the planned purchases.

The company also explained that its investigation is ongoing following the “unauthorized outflow” equivalent of 4,503 BTC on May 31. 

DMM Bitcoin “deeply” apologized for the situation and its effect on its customers and stated that it would “continue to investigate the cause of the unauthorized outflow.”

The firm also stated that it will “promptly inform” the public of any new details as they become available. 

Related: Bitcoin just had its best May since 2019 despite ‘predatory’ 3% BTC price dip

Securing recovery funds

In efforts to finance the compensation required to reimburse customers, DMM Bitcoin borrowed five billion yen ($32 million) on June 3. 

A further capital increase of 48 billion yen ($308 million) is scheduled for June 7, and an additional 2 billion yen ($12.8 million) through subordinated debt financing on June 10.

This financial support and recovery fund accumulation comes from DMM.com and will ensure the necessary funds to “guarantee customers’ Bitcoin holdings.”

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Hacked to “bits”

Ranked as the eighth-largest cryptocurrency hack in history, the DMM Bitcoin incident is among the top 10 biggest crypto exchange hacks of all time.

In first place, the March 2022 Ronin Network hack exploited the network’s validator nodes, resulting in the theft of $620 million.

This prompted Ronin to significantly upgrade their security measures, introduce $1 million bug bounties and double their validator nodes to ensure it “never happens again.”