Bitget to initiate legal proceedings against 8 accounts suspected of manipulating its VOXEL/USDT market

Crypto exchange Bitget is planning to take legal action against eight accounts suspected of manipulating its VOXEL/USDT market, aiming to recover the $20 million lost during the incident and redistribute it to affected users. The exchange will be issuing a series of lawyer’s letters to individuals allegedly involved in abnormal trading activities on its platform, which caused a significant loss to the exchange.

The eight accounts are part of a coordinated professional group that focused on exploiting system vulnerabilities for financial gain, according to a post by Bitget’s Head of Asia, Xie Jiayin. The accounts allegedly profited by over $20 million by leveraging a malfunction in the trading system during a specific window on April 20.

“This group is suspected of carrying out professional arbitrage operations in a coordinated manner, aiming to exploit system vulnerabilities for financial gain. Their actions led to a substantial loss of over $20 million for the exchange, which will be fully reimbursed to affected users through airdrops after the legal procedures are completed,” said Jiayin.

Platform Responds to User Concerns and System Malfunction

Bitget clarified that users who participated in VOXEL trading and withdrew funds between 16:00 and 16:30 will not face any liability. These users’ accounts were fully restored on Wednesday, and no further action will be taken.

Furthermore, Bitget will release a comprehensive report detailing the sequence of events surrounding the VOXEL trading incident. The report will provide a transparent account of the incident, explaining the technical malfunction and the steps taken by the exchange to mitigate the situation.

The trading anomaly occurred when the Bitget system experienced a glitch that caused an abnormal surge in the VOXEL token’s trading volume. At the peak, VOXEL’s trading activity surpassed even Bitcoin’s on the platform.

An on-chain analyst noted that a bot malfunction caused trades to trigger repeatedly within a narrow price range, enabling some users to earn substantial profits with minimal capital.

Currently, Bitget is concentrating on recovering the lost funds and addressing the system vulnerabilities that contributed to the incident. The exchange is also cooperating with relevant authorities to investigate any potential criminal activity linked to the incident.

Community Response and Future Measures

Bitget’s handling of the VOXEL incident has drawn mixed reactions from the crypto community. Some users expressed dissatisfaction, questioning the platform’s decision to reverse trades and calling for greater internal accountability.

Others warned against deducting funds from unaffected users, emphasizing that the platform must adhere to fair and transparent practices. The incident has also brought scrutiny to Bitget’s hybrid custody model, with critics arguing that it poses systemic risks to users by lacking adequate safeguards.

Despite the incident, Bitget continues to grow its global user base, now boasting over 100 million users and a daily trading volume of $20 billion. The exchange’s native token, BGB, has also experienced significant growth, indicating continued investor confidence.

Bitget maintained its commitment to protecting user interests and maintaining platform integrity. As the exchange progresses with legal action and system improvements, the broader crypto community will closely monitor its efforts to resolve the situation and rebuild trust.