DMM Bitcoin to Raise $320M for User Compensation After Massive Hack
Summary:
Japanese cryptocurrency exchange DMM Bitcoin has announced plans to raise $320 million to compensate users after a hack resulted in the theft of a similar amount in Bitcoin. The recovery process involves acquiring lost Bitcoin funds from its parent company, DMM.com. The company is conducting ongoing investigations and has assured users of prompt information regarding developments. Leveraging a loan, capital increment, and subordinated debt funding from DMM.com, DMM Bitcoin will secure a compensation pool and safeguard customers' Bitcoin assets.
DMM Bitcoin, a cryptocurrency exchange based in Japan, was the recent victim of a heist that led to the theft of Bitcoin valued at $320 million. The company has announced its intentions to amass 50 billion yen (equivalent to $320 million) as reimbursement for its affected customers. On June 5, DMM Bitcoin released a statement detailing its plans to replenish the stolen customer assets. The recovery plan includes acquiring a sum comparable to the lost Bitcoin amount from its parent company, DMM.com.
Throughout the statement, the company assured its users that they would be mindful to lessen any negative repercussions on the market due to these forthcoming transactions. Post the unauthorized diversion of 4,503 Bitcoins on May 31, DMM Bitcoin is in the midst of conducting in-depth investigations. In its public announcement, the company expressed deep regrets over the incident and the subsequent inconvenience caused to its customers. The company remains committed to delving into the roots of this unauthorized transaction and promises to promptly relay any significant updates to the public.
To procure the necessary funds for reimbursement, on June 3, DMM Bitcoin secured a loan of 5 billion yen (approx. $32 million). Additionally, they have planned a capital increment of 48 billion yen (around $308 million) on June 7. They also aim to borrow 2 billion yen (about $12.8 million) as subordinated debt funding on June 10. This financing, sourcing from DMM.com, is expected to ensure a sufficient safeguard for the Bitcoin assets of the customers.
The DMM Bitcoin theft incident holds the dubious distinction of being in the top 10 largest cryptocurrency exchange hacks ever reported, ranking eighth in the tally. The incident that tops this grim list is the Ronin Network hack in March 2022. The said incident involved an illegal intrusion into the network’s validator nodes and resulted in a loss of $620 million. Following this massive breach, Ronin Network was forced to bolster their security shield, launch a $1 million bug bounty, and double their validator nodes, affirming their resolution to prevent any repeat of such incidents.
Published At
6/5/2024 11:32:13 AM
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