Japanese cryptocurrency exchange DMM Bitcoin Announce Its decision to cease operations after a serious security breach in May resulted in losses of more than $300 million.
The latest report indicates that the exchange has agreed to transfer its assets to SBI VC Trade, the cryptocurrency division of Japanese financial conglomerate SBI Group.
Key details have been revealed
The planned shutdown follows a turbulent period for DMM Bitcoin, which suffered the theft of 4,502.9 BTC, valued at approximately $306 million at the time of the hack.
In response to the hack, the company secured financing of up to 55 billion yen ($365.1 million) through a combination of loans and capital raising to address the financial shortfall.
Despite these efforts, the exchange has elected to cease operations and transfer its clients’ accounts and custodial assets to SBI VC Trade by March 2025.
According to a statement by DMM Bitcoin, the asset transfer agreement with SBI VC Trade excludes open positions in leveraged trading. Clients must settle all leveraged trading positions before completing the transfer.
This measure, according to the report, ensures a “smoother transition” of custodial assets to SBI VC Trade, which is set to expand its offerings by handling spot trading of 14 cryptocurrencies currently available on the DMM Bitcoin platform.
Notably, SBI VC Trade’s acquisition of assets is part of the company’s strategy to strengthen its presence in the cryptocurrency market in Japan. The move is also in line with SBI’s larger ambitions in the digital assets sector, which include partnerships and expansions in blockchain technology and decentralized finance.
Japanese crypto position
It is worth noting that the recent decision taken by cryptocurrency exchange DMM Bitcoin coincides with Japan’s cautious stance towards the cryptocurrency industry.
Japan’s Financial Services Agency (FSA) official recently announced plans to conduct a comprehensive review of the country’s cryptocurrency regulations in the coming months.
The primary goal is to assess whether the current framework under payments law adequately addresses the complexities of digital asset management.
If changes arise from this review, it could signal a major organizational shift. One possible outcome is a reduction in tax rates on crypto gains – from the current 55% to 20% – bringing them in line with taxes on assets such as stocks and other financial instruments.
Despite regulatory uncertainty, a recent survey conducted by Nomura Holdings and Laser Digital Holdings highlights growing investor interest in Japan’s cryptocurrency market.
The survey, which polled 547 investment managers from sectors such as family offices and public interest firms, revealed that 54% plan to enter the digital currency space within three years.
While only 16% see cryptocurrencies as viable alternatives to traditional currencies, 62% view them as profitable investment opportunities with high returns.
Featured image created with DALL-E, chart from TradingView