1. Incident Overview and Outbreak of Abnormal Trading
On April 20, 2025, the VOXEL/USDT perpetual contract trading pair on Bitget experienced extreme fluctuations within a short period, with prices oscillating frequently between 0.135U and 0.148U, and trading volume soaring to $12.7 billion within 30 minutes, far exceeding Bitcoin's trading volume at the same time. Some users exploited system vulnerabilities for 'zero-cost arbitrage,' profiting over 10% by placing high-frequency orders with a principal of 100USDT, ultimately achieving exponential returns, with individual accounts gaining up to millions of dollars.
Root Causes of Technical Vulnerabilities:
Price Anchoring Failure: Market-making bots incorrectly called historical candlestick data, failing to link to the spot market price sensors, resulting in abnormal price fluctuations.
Liquidity Simulation Distortion: The system virtualized order depth, misjudging the opposing orders when real buy orders surged, creating a 'self-buying and self-selling' cycle.
Risk Control Delays: Abnormal detection is based on 5-minute candlesticks, failing to identify millisecond-level high-frequency trading, with human intervention only occurring after trading volume surpassed the $10 billion threshold.
2. Bitget's Response Measures and Controversies
Platform Disposal Means:
Account Freezing and Trade Rollback: Bitget has suspended withdrawal channels, frozen 438 abnormal accounts, and rolled back all VOXEL contract transactions from 16:00 to 16:30 on April 20.
Compensation Plan: Initiating airdrop compensation for users with losses, promising to fully return the recovered $20 million to users.
Legal Accountability: Sending legal letters to 8 suspected professional 'wool party' accounts, accusing them of illegally profiting from vulnerabilities.
Controversy Focus:
Ambiguity of Rules: The user agreement grants the platform the 'right to handle abnormal trades,' but does not clearly define the compensation standards for 'erroneous trades,' leading to rights protection depending on individual case negotiations. For example, user Jack was compensated for losses and fees only after persistent appeals, while most retail investors did not receive proactive compensation.
Counterparty Doubts: The market maker team pointed out that their profits come from losses on market trading counterparts, which is normal behavior, questioning whether Bitget's rollback was simply to cover up losses caused by their own market-making system vulnerabilities.
Legal Risks: Chinese regulatory policies clearly state that overseas exchanges providing services to domestic users constitute illegal financial activities, and Bitget's legal letter may face jurisdictional disputes.
3. Industry Reflection and Trust Crisis
Power Boundaries of Centralized Exchanges:
Bitget's rollback decision, while in accordance with the user agreement terms, exposed the drawbacks of centralized platforms acting as both referee and player. The industry lacks third-party supervision, making rollback powers prone to abuse and difficult to protect user rights.
In contrast to traditional finance (such as the Knight Capital incident in 2011), the handling of technical vulnerabilities in the cryptocurrency market relies more on unilateral decisions by the platform, exacerbating the trust crisis.
Challenges in Rebuilding Trust for Bitget:
Rapid Development and Hidden Risks: Bitget has rapidly risen based on derivatives trading, with an 8.06% growth in spot market share in 2024, and the platform token BGB increasing over 13 times this year. However, this incident has weakened users' trust in its technical security and fairness.
Brand Restructuring Strategy: Attempting to regain user trust through airdrops to recover funds, but the transparency of their legal actions (such as whether to disclose evidence of 'wool party' activities) will impact long-term credibility.
4. Industry Impact and Future Outlook
Tighter Regulation: The incident may prompt countries to strengthen scrutiny of overseas exchanges, especially platforms targeting Chinese users; illegal operations and tax issues may become regulatory focal points.
Need for Technical Upgrades: Exchanges need to optimize their market-making systems and risk control mechanisms, such as introducing real-time price anchoring and millisecond-level abnormal monitoring to avoid similar vulnerabilities.
Decentralized Alternatives: The incident may drive users towards DEX, but the current lack of liquidity remains an obstacle; the competition between centralized and decentralized platforms will continue.
Conclusion
The Bitget VOXEL incident is not only a case of technical vulnerability but also reveals the deep-seated contradictions in the concentration of power in centralized exchanges and the protection of user rights. The platform needs to improve on multiple fronts, including technical security, transparency of rules, and legal compliance, while the industry urgently needs to establish a more neutral dispute resolution mechanism to rebuild user trust and promote the healthy development of the cryptocurrency market.
