Bitget is taking legal action against eight accounts for manipulating VOXEL trading and gaining over $20 million.
Suspicious trading activity caused Bitget to suspend certain VOXEL futures accounts and investigate the issue.
Bitget plans to return all recovered funds to users through airdrops and will release a full report soon.
Crypto exchange Bitget has initiated legal proceedings against eight accounts accused of manipulating VOXEL token trading. The incident occurred on April 20 during a sharp surge in VOXEL’s trading volume.
https://twitter.com/WuBlockchain/status/1916491816398103018
Bitget's Chinese representative, Jiayin Xie, confirmed that legal letters were issued to the accused accounts. The exchange believes the accounts are linked to a professional arbitrage group that gained over $20 million.
The Seychelles-based exchange announced plans to airdrop recovered funds to affected users. Consequently, users impacted by the trading incident may soon receive compensation.
Suspicious Activity Halts VOXEL Trading
The trading activity raised concerns after Bitget reported abnormal fluctuations in the VOXEL/USDT perpetual futures market. Suspicious price swings and volume spikes led the exchange to suspend certain accounts. Trading, deposits, and withdrawals were paused during the investigation.
Bitget clarified that most users were not affected by the trading halt. However, it has not yet disclosed specific technical flaws or identified the individuals involved. The exchange stated that a full report on the incident is being prepared.
Speculation among traders pointed to a malfunction in Bitget’s market-making technology. Some users compared the situation to a casino disputing unexpected wins by gamblers.
Industry Reactions and Previous Incidents
Chinese-language discussions highlighted comments by Bitget CEO Gracey Chen, criticizing Hyperliquid’s handling of a recent exploit. Hyperliquid had suffered a liquidation attack involving its JELLY perpetual futures. Consequently, it delisted the JELLY contracts due to suspicious trading activity.
Binance also expelled two market makers tied to price crashes in GPS, SHELL, and MOVE tokens earlier this year. These incidents have raised concerns about vulnerabilities across exchanges.
Bitget defended its partnerships by confirming that leading global market makers have joined its platform. However, it declined to reveal their identities due to confidentiality agreements.
Bug Exploit Suspected in VOXEL Trading Surge
The VOXEL incident attracted further attention after Bitget revealed that trading volume exceeded $12 billion that day. This figure dwarfed trading activity for the same token on Binance.
Some community members believe that a bug in an automated market maker bot triggered the irregular volumes. Traders who detected the bug early allegedly used high-leverage trades to maximize profits without costs.
VOXEL, the native utility token of the game Voxies, supports a free-to-play tactical RPG built on Ethereum. Bitget assured users that only the eight accounts identified will face legal action, and other accounts have resumed normal operations.
The exchange plans to distribute all recovered funds through airdrops and expects to release a full incident report soon.
