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Japanese crypto exchange – DMM Bitcoin – loses $305 million to hackers

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A major cryptocurrency heist has once again highlighted lingering security vulnerabilities around digital asset exchanges. Japanese trading platform DMM Bitcoin announced Friday that hackers had infiltrated their systems, draining 4,502 bitcoins worth over $305 million.

According to DMM Bitcoin’s official statement, the “unauthorized leak” was detected around 1:26 pm local time on May 31st. The exchange rapidly implemented restrictions on crypto withdrawals, leveraged trading, and new account openings to prevent further losses.

The staggering theft ranks as one of the largest ever targeting a crypto exchange. It eclipses the infamous 2018 Coincheck hack, where over $530 million in digital tokens were pilfered from the Japanese platform.

While a major blow, DMM Bitcoin has vowed to recompense all customer deposits from its own coffers and those of its parent company. “We will procure the equivalent amount of BTC…and guarantee the full amount,” their statement assured.

The heist reopens concerns around crypto custody security measures. DMM Bitcoin claims to store over 95% of client assets in offline “cold wallets” designed to prevent unauthorized access. However, the scale of this breach suggests potential vulnerabilities impacting both internet-connected and air-gapped storage systems.

Read also: South African fraud prevention startup – Orca – raises $550K to tackle cybercrime surge

As adoption grows, trading platforms remain lucrative targets for sophisticated cybercriminals. While last year saw a over 50% decline in total crypto stolen, this DMM hack proves the fight against bad actors is far from over.

For the exchange’s 370,000 customers, it marks a disquieting wake-up call about the risks of centralized crypto custody. The incident may accelerate the shift towards self-custodied wallets and decentralized trading protocols designed to eliminate issues like this scary flaw.

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When I'm not reading about tech, I'm writing about it, or thinking about the next weird food combinations to try. I do all these with my headphones plugged in, and a sticky note on my computer with the words: "The galaxy needs saving, Star Lord."
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