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Crypto Exchange DMM Bitcoin Announces $321 Million Fundraising Plan to Compensate Customers Affected by Hack

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Crypto Exchange DMM Bitcoin Announces $321 Million Fundraising Plan to Compensate Customers Affected by Hack

Crypto Exchange DMM Bitcoin Announces $321 Million Fundraising Plan to Compensate Customers Affected by Hack

Japanese cryptocurrency exchange DMM Bitcoin has unveiled a fundraising initiative amounting to 50 billion yen ($321 million). The aim is to utilize these funds for the acquisition of Bitcoin in order to compensate customers affected by a recent hacking incident.

Operating under the DMM.com umbrella, DMM Bitcoin is part of a conglomerate involved in various sectors including entertainment, technology, and renewable energy. The CEO at the helm is Keishi Kameyama.

The plan, announced on Wednesday, outlines a strategy to raise funds primarily through a 48 billion yen (~ $307.8 million) capital increase from group companies, supplemented by an additional 2 billion yen (~ $12.8 million) in subordinated debt. This approach is crafted to mitigate any potential market impact while acquiring crypto assets.

Yuya Hasegawa commented on the intricacies of the fundraising plan, noting the involvement of other entities within the broader DMM.com Group, making it challenging for external parties to pass judgment.

The breach resulted in an unauthorized outflow of 4,502.9 Bitcoin, valued at nearly $71,000 each at current market rates, making it the seventh-largest crypto theft on record, according to Chainalysis, a blockchain analytics firm. This incident underscores ongoing security vulnerabilities within digital asset exchanges, heightening concerns surrounding their security frameworks.

In response, Japan’s Financial Services Agency has called for a comprehensive investigation into the breach’s origins and the proposed strategy for compensating affected customers. Finance Minister Shunichi Suzuki has emphasized the government’s commitment to enhancing security measures to prevent future incidents.

This breach is not an isolated occurrence within Japan’s cryptocurrency industry, but rather part of a broader trend of significant hacks, including the Mt. Gox collapse in 2014 and the CoinCheck breach in 2018. Mati Greenspan, CEO of Quantum Economics, discussed the recurring security challenges facing the Japanese crypto sector in an interview with BeInCrypto.

“First, Mt. Gox in 2014, then CoinCheck in 2018. One would expect people to learn not to store their crypto on centralized exchanges by now. Both prior hacks significantly impacted crypto adoption in Japan for extended periods. I suspect this incident will yield similar outcomes, as the lessons drawn often miss the mark,” Greenspan shared with BeInCrypto.

Crypto Exchange DMM Bitcoin Announces $321 Million Fundraising Plan to Compensate Customers Affected by Hack
Crypto Exchange DMM Bitcoin Announces $321 Million Fundraising Plan to Compensate Customers Affected by Hack 1

Despite these setbacks, the broader cryptocurrency sector demonstrates resilience and adaptation. Data from 2024 indicates a 20% decrease in losses attributed to crypto-related crimes compared to the previous year, with May 2024 witnessing a 12% decline in such incidents compared to May 2023.

Crypto Exchange DMM Bitcoin Announces $321 Million Fundraising Plan to Compensate Customers Affected by Hack

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