Bitget is taking legal action against eight accounts involved in the manipulation of the VOXEL token

Bitget is taking legal action against eight accounts involved in the manipulation of the VOXEL token, which led to an unusual price surge and market instability.

Bitget is planning to take legal action against eight accounts involved in the manipulation of the VOXEL token, which led to an unusual price surge and market instability on Apr. 20, according to a statement by the exchange’s head of Asia, Jiayin Xie.

In a post on X, formerly known as Twitter, Xie announced that Bitget would be issuing eight legal letters, targeting the individuals suspected of improperly gaining more than $20 million from the incident. Xie added that the exchange plans to distribute 100% of any recovered funds from the legal proceedings to platform users through airdrops.

Bitget is planning to issue 8 legal letters. The 8 accounts are the main force behind this incident and reaped the benefits. Bitget will recover the unjust gains of more than 20 million US dollars and distribute 100% of the recovered funds to platform users through airdrops.

— Bitget (@BitgetExchange) April 27, 2024

The exchange’s head of Asia further stated that users who traded VOXEL between 16:00 and 16:30 on Apr. 20 but had already withdrawn their funds, would not face any repercussions. These accounts have been restored, and no further responsibility will be pursued against them.

“We are aware that this incident has caused inconvenience to some users, and we sincerely apologize for any unrest it may have brought,” said Xie. A full report would be made available shortly to give a better picture of the situation, he concluded.

The incident unfolded on Apr. 20 when the price of VOXEL surged by more than 200% in a single 30-minute period, briefly overtaking Bitcoin as the most traded asset on Bitget in terms of daily trading volume. During this price spike, which spanned from $0.125 to roughly $0.1645, trades seemed to be executed without the usual order book process.

The incident was caused by a suspected bug in Bitget’s market-making bot, which resulted in rapid price swings and instant order fills that some traders exploited to generate substantial gains. In response, Bitget paused trading on the VOXEL/USDT contract and froze several accounts implicated in the abnormal trading activity.

Moreover, Bitget announced it would roll back irregular trades and compensate users who encountered losses during the incident. While the platform has maintained that the incident wasn’t due to an internal failure or exploit, it has yet to disclose the identities of those responsible.

As Bitget focuses on reimbursing users and taking legal action against the eight accounts, it remains to be seen how the incident will ultimately impact the exchange’s reputation and user trust.

The incident has also drawn comparisons to a March price manipulation incident on Hyperliquid (HYPE) involving the JELLY token. Bitget’s chief executive officer Gracy Chen previously voiced criticism of Hyperliquid’s response to the incident. Following the VOXEL scandal, critics have called out Chen for hypocrisy.