DMM Bitcoin Plans to Raise Over $300 Million to Compensate Affected Users
Japanese cryptocurrency exchange DMM Bitcoin, recently hacked, has announced plans to raise over $300 million through various fundraising initiatives. DMM Bitcoin intends to use the funds to compensate users affected by the infamous hack involving 4,502 BTC (approximately $305 million).
In a statement, the exchange revealed it secured a loan of 5 billion yen ($32 million) on June 3 and plans to raise an additional 48 billion yen ($308 million) by June 7. Moreover, DMM Bitcoin intends to secure an additional loan of 2 billion yen ($12.8 million) through secondary loans on June 10.
The company stated that its planned purchase of Bitcoin will be executed in a manner that does not significantly impact the market. It also disclosed that its fundraising efforts are backed by support from its affiliated “group companies.” DMM Bitcoin is a subsidiary of DMM Financial, part of the DMM Group, a conglomerate founded in 1999.
DMM Bitcoin Hack Ranked as the Sixth Largest Crypto Exploit
While information remains scarce about the cause of the hack that occurred on May 31, blockchain security firms have speculated that DMM Bitcoin’s multi-signature private key may have been compromised or that the exchange’s wallet controller fell victim to a phishing scam.
Meanwhile, DMM Bitcoin continues its investigation into the hack and has promised to provide more details once the investigation is complete. Arkham Intelligence, a blockchain analytics platform, has offered a bounty to help identify the attackers.
The DMM Bitcoin hack is ranked among the largest cryptocurrency hacks in history, being the sixth largest incident affecting the industry in the past three years. During this period, the cryptocurrency sector witnessed the $620 million Ronin Network hack and the $400 million hack of the now-bankrupt FTX exchange.
DMM Bitcoin Drives Crypto Losses
The DMM hack has contributed to the total cryptocurrency thefts this year, raising the total to $821 million, with May recording the highest monthly loss.
Analyst Predicts DMM’s BTC Purchase Will Boost Prices
In a June 5 post on X (formerly Twitter), cryptocurrency analyst Guanyuhan predicted that DMM’s planned BTC purchase would positively impact the market as the company will likely buy assets at a premium.
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“The likelihood that [DMM] can only purchase in the Japanese market with low liquidity means they need to buy at a higher premium than the international price. This premium will eventually be reflected in Japanese exchanges,” said Guanyuhan.
He added, “Arbitrageurs will then try to capitalize on the higher prices on these Japanese platforms, thereby increasing prices globally.” Guanyuhan concluded that “from a supply and demand principle, this DMM operation will cause a price increase, but risks need to be managed.”
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