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DMM Bitcoin Co., Ltd. (located in Chuo-ku, Tokyo), a subsidiary of the DMM Group, announced on the 31st that 48.2 billion yen worth of bitcoins had been improperly transferred. The company said it would fully compensate affected customers for their bitcoins with the support of the group companies.
DMM Bitcoin is an exchange that handles nearly 40 virtual currencies, including Bitcoin. According to the company's business report for March 2023, the company has 370,000 customer accounts. After the improper transfer incident, the company restricted some services, including suspending the review of new accounts and the purchase of spot transactions.
The police have been informed of the incident and have begun collecting relevant information. DMM Bitcoin said that the specific circumstances of the victim are still under investigation.
In the past, cryptocurrency exchanges have seen multiple incidents of virtual currency outflows. In 2014, Mt. Gox saw an outflow of 48 billion yen worth of Bitcoin, and in 2018, Coincheck saw an outflow of 58 billion yen.
Since the outflow of 10 billion yen from Liquid in 2021, no similar incidents have occurred on domestic exchanges.
In January 2018, Coincheck experienced the largest outflow in its history when virtual currency called NEM stored by the company's customers was transferred to an external party due to improper access. The company's employees' terminals were infected with malware, resulting in the theft of the password used for management, namely the private key. Afterwards, the company compensated NEM holders in Japanese yen.
The massive outflow from Coincheck led to the strengthening of regulation of exchanges. The government amended the law in 2019 to require exchanges to use high-reliability methods such as "cold wallets" that are isolated from the Internet to manage customers' virtual currencies.