On April 20, 2025, the crypto world exploded - multiple arbitrageurs claimed they discovered a loophole in the VOXEL contract trading pair on the Bitget exchange, making huge profits through repeated order placements and exploiting the abnormal order-filling mechanism of bots, with some making tens of thousands of USDT and others making millions.
Soon, users reported the situation, and the exchange quickly closed withdrawals, but many people had already withdrawn USDT, making recovery almost impossible.
Incident process.
On April 20, the trading volume of the VOXEL contract on the Bitget exchange suddenly soared to $12.7 billion. What does this mean? It's about 300 times the usual trading volume, even exceeding BTC/USDT by three times!
The price range of Bitget's VOXEL/USDT trading pair (0.0234−0.0256) led to self-trading cycles in the matching system, generating over 2,000 invalid transactions per second.
The Orange Cat Laboratory found that the root cause of this abnormal trading was a serious failure in Bitget's system. In simple terms, there were three fatal problems in the exchange's backend system:
Automatic matching errors: the system was frantically 'buying and selling itself' within a certain price range, creating over 2,000 'fake transactions' per second.
Warning too slow: even though the anomaly had lasted for half an hour, the system only realized something was wrong.
Monitoring malfunction: over 90% of the trades surprisingly came from a batch of the same API accounts, which the platform failed to notice.
These problems stacked together ultimately led to this chaos.
It's unclear if any market makers made mistakes, pending verification.
Arbitrageur behavior 'four steps'.
1. Through on-chain and data layer analysis, the Crypto Research Institute revealed that arbitrage accounts systematically profited using three strategies:
2. Flash arbitrage: exploiting system latency to complete high-frequency buy-sell loops within 0.3 seconds;
3. Liquidity extraction: inducing the platform to release reserve liquidity through massive 'fake orders';
4. Cross-platform hedging: synchronously establishing hedging positions on 5 exchanges for arbitrage.
Data shows that at least 37 professional accounts profited over a million dollars during this incident, with some accounts yielding returns as high as 280,000%, and some funds have already reached on-chain.
Bitget's risk control really fell short.
The Orange Cat Laboratory also analyzed Bitget's entire risk control system and found that it had almost completely failed in 7 key areas:
1. Anomaly detection is too slow.
2. No monitoring of API behavior.
3. Did not intercept 'self-trading' situations.
4. Did not set up liquidity protection.
5. The capital reserves are far from sufficient for emergencies.
6. The system did not isolate risks from different markets.
7. The emergency mechanism also lacks key steps.
Bitget's response.
Limited withdrawals for most accounts.
On-chain tracking: $147 million frozen, $63 million still flowing out.
According to the latest data, Bitget has successfully frozen $147 million of the involved accounts' assets, but about $63 million is still flowing out through mixers. On-chain analysis shows the fund transfer paths as follows:
-42% flowing into privacy coin networks.
-35% transferred to decentralized trading platforms.
-23% converted to stablecoins and deposited into compliant institutional wallets.
Consequences caused.
The Orange Cat estimates that this incident may have caused Bitget to directly lose over $100 million. More importantly, user trust is rapidly evaporating. Even some rating agencies quickly listed Bitget as 'untrustworthy'.
But from another perspective, this incident also made the entire industry realize the urgency of risk control systems - it's expected that major exchanges will increase investment to enhance their security capabilities in the next six months.
Hope Bitget can reach a final solution with the malicious arbitrageurs.
In a bear market, only exchanges, payment processors, market makers, and KOLs have money left. At this time, it's okay if exchanges don't bail out the market, just don't cause further fluctuations in prices!
It's really hard for the retail investors!
Follow closely, the orange cat will help you find the next hundredfold opportunity!