Japanese cryptocurrency exchange DMM Bitcoin announced the decision to cease operations after a serious security breach in May that resulted in losses of more than $300 million.
The latest report states that the exchange has agreed to transfer its assets to SBI VC Trade, the crypto division of Japanese financial conglomerate SBI Group.
Key details revealed
The planned closure follows a tumultuous period for DMM Bitcoin, which suffered the theft of 4,502.9 BTC, worth approximately $306 million at the time of the hack.
In response to the breach, the company has secured financing worth 55 billion yen ($365.1 million) through a combination of loans and capital increases to address the financial shortfall.
Despite these efforts, the exchange has chosen to cease operations and transfer its customer accounts and custody assets to SBI VC Trade by March 2025.
According to a statement from DMM Bitcoin, the asset transfer agreement with SBI VC Trade excludes open positions in leveraged trading. Clients are required to unwind all leveraged trading positions before completing the transfer.
This measure, according to the report, will ensure a “smoother transition” of custodial assets to SBI VC Trade, which will expand its offering by handling spot trading for 14 cryptocurrencies currently available on DMM Bitcoin’s platform.
Notably, SBI VC Trade’s asset acquisition is part of the company’s strategy to strengthen its presence in the Japanese cryptocurrency market. This move is also in line with SBI’s larger ambitions in the digital asset sector, including partnerships and expansions in blockchain technology and decentralized finance.
Japan Crypto Stance
It is striking that the recent decision of crypto exchange DMM Bitcoin coincides with that of Japan cautious attitude towards the cryptocurrency industry.
The Japanese Financial Services Agency (FSA) recently made this official announced plans for a comprehensive overhaul of the country’s crypto regulations in the coming months.
The primary objective is to assess whether the current framework under the Payments Act sufficiently addresses the complexity of digital asset management.
If changes result from this review, they could signal a major shift in regulation. One possible outcome is reduction tax rates on crypto profits– from the current 55% to 20% – bringing them in line with taxes on assets such as shares and other financial instruments.
Despite regulatory uncertainties, there has recently been one research by Nomura Holdings and Laser Digital Holdings highlights the growing interest of investors in the crypto market in Japan.
The study, which surveyed 547 investment managers from sectors such as family offices and public companies, found that 54% plan to enter the digital currency space within three years.
While only 16% see digital currencies as viable replacements for traditional currencies, 62% see them as lucrative investment opportunities with high returns.
Featured image created with DALL-E, Chart from TradingView