The incident at DMM Bitcoin on May 31st highlighted the vulnerability of Japanese cryptocurrency exchanges to cyber attacks. A staggering $305 million worth of Bitcoin was lost due to the hack, with 4,502.9 bitcoins drained from the platform. DMM Bitcoin confirmed the attack but has not provided specific details about how the breach occurred.
In response to the attack, DMM Bitcoin announced that it is conducting an investigation and has implemented measures to prevent a recurrence of such incidents. The exchange assured users that steps have been taken to prevent unauthorized outflows of cryptocurrency and pledged to cover all Bitcoin deposits to reimburse affected customers. The company also stated its intention to acquire an equivalent amount of lost BTC with the support of its group companies.
Following the hack, DMM Bitcoin imposed restrictions on spot purchase transactions and warned users that withdrawals involving Japanese yen might experience significant delays compared to normal processing times. This cautionary measure indicates the extent of the impact of the breach on the exchange’s operations and customer service.
This recent incident at DMM Bitcoin is not the first time that a Japanese cryptocurrency exchange has been targeted by hackers. In 2020, another popular exchange, Coincheck, fell victim to a cyber attack during which personal information and emails were compromised. The breach, which occurred between May 31st and June 1st, resulted in a third party gaining illegal access to customer emails by altering domain information through Coincheck’s domain registration service.
The incident involving Coincheck is a stark reminder of the importance of robust security measures in the cryptocurrency exchange industry. In 2018, Coincheck was hacked for $533 million, primarily consisting of NEM tokens, due to its inadequate security practices. Instead of following recommended protocols such as using offline cold wallets or secure multi-sig wallets, Coincheck stored most clients’ NEM in a single online hot wallet protected by just one private key.
The vulnerability of Japanese cryptocurrency exchanges to cyber attacks underscores the need for enhanced security measures and proactive response strategies. These incidents serve as a wake-up call for the industry to prioritize cybersecurity and protect investors’ assets from potential breaches and theft. It is imperative for exchanges to learn from past mistakes and invest in robust security infrastructure to safeguard against future threats.
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