- Bitget sued eight accounts for VOXEL manipulation, promising compensation for affected users.
- Market-making bot’s flaw blamed for 200% price spike; full incident report expected soon.
Crypto exchange Bitget is taking legal action against eight accounts accused of manipulating the VOXEL token. This incident triggered a sharp price spike and over $20 million in improper gains.
Bitget has pledged to return any recovered funds to users impacted by the volatility, in an attempt to restore trust after the suspicious trading activity.
Legal action and user protections
Jiayin Xie, Bitget’s Head of Asia, confirmed on the 27th of April that legal notices were issued to the suspected accounts.
Bitget announced that it will not penalize users who traded VOXEL during the 30-minute disruption on the 20th of April (16:00–16:30 UTC) and subsequently withdrew funds, despite some users initially being affected by frozen assets.
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The exchange has reinstated the affected accounts and assured users that it will not take further punitive action against them.
Bitget: What happened during the VOXEL spike
The manipulation occurred swiftly, with VOXEL surging over 200% within just 30 minutes, briefly becoming Bitget’s most traded asset. Its price rose from $0.125 to $0.1645, fueled by trades that bypassed the regular order book.
Bitget has attributed the spike to a suspected flaw in its market-making bot. This bot caused orders to execute unusually quickly, creating an opportunity for manipulation.
In response, trading was paused, several accounts were frozen, and Bitget announced plans to roll back affected trades.
This incident raises questions about transparency, highlights potential backlash, and underscores significant implications for the industry.
Transparency, backlash, and industry implications
Bitget maintains that the issue was neither the result of an internal failure nor an external hack. However, the exchange has not yet disclosed the identities of those involved, with a full incident report expected soon.
In the meantime, Bitget is facing growing backlash. Critics have highlighted previous remarks by CEO Gracy Chen, who had criticized Hyperliquid’s handling of a similar incident involving the JELLY token.
Now, with Bitget under scrutiny, the situation has reignited broader concerns about crypto exchange reliability and the risks of automated trading systems.
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