Japanese cryptocurrency exchange DMM bitcoin <a target="_blank" href="https://bitcoin.dmm.com/news/20241202_01″ target=”_blank” rel=”noopener nofollow”>announced its decision to shut down operations following a serious security breach in May that resulted in more than $300 million in losses.
The latest report claims 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 shutdown follows a tumultuous period for DMM bitcoin, which saw 4,502.9 btc stolen, valued at approximately $306 million at the time of the hack.
In response to the breach, the company obtained 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 chose to cease operations and transfer its client accounts and custody assets to SBI VC Trade by March 2025.
According to a statement issued by DMM bitcoin, the asset transfer agreement with SBI VC Trade excludes open positions in leveraged trading. Clients must liquidate all leveraged trading positions before the transfer is completed.
This move, according to the report, ensures a “smoother transition” of custodial assets to SBI VC Trade, which will expand its offerings by handling spot trading of 14 cryptocurrencies currently available on the DMM bitcoin platform.
Notably, SBI VC Trade's asset acquisition is part of the company's strategy to strengthen its presence in Japan's cryptocurrency market. This move also aligns with SBI's broader ambitions in the digital asset sector, which include partnerships and expansions in blockchain technology and decentralized finance.
Japan crypto Stance
Notably, the recent decision 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 for a comprehensive review of the country's crypto regulations in the coming months.
The main objective is to assess whether the current Payments Law framework sufficiently addresses the complexities of digital asset management.
If changes arise from this review, they could indicate a significant regulatory change. One possible outcome is to reduce tax rates on crypto profits, from the current 55% to 20%, aligning them with taxes on assets such as stocks and other financial instruments.
Despite regulatory uncertainties, a recent survey by Nomura Holdings and Laser Digital Holdings highlights growing investor interest in the cryptocurrency market in Japan.
The survey, which surveyed 547 investment managers from sectors such as family offices and public interest corporations, revealed that 54% plan to enter the digital currency space within three years.
While only 16% see digital currencies as viable substitutes for traditional currencies, 62% see them as lucrative investment opportunities with high returns.
Featured image created with DALL-E, TradingView chart
