Bitget has announced plans to issue legal notices to 8 accounts suspected of manipulating VOXEL trading, profiting over $20 million, following an investigation into abnormal market activity.
Background:
- Bitget, one of the leading cryptocurrency exchanges in the market, revealed it will take legal action against 8 accounts suspected of manipulating trades on its VOXEL perpetual futures market, leading to illicit profits totaling over $20 million.
- The issue stems from abnormal trading activity that occurred on April 20, when VOXEL, the native token of the Polygon-based game Voxie Tactics, experienced an unexpected surge of more than 500% in just two days.
- In response, Bitget rolled back affected trades conducted during a specific window and froze suspicious accounts while initiating a thorough investigation.
- The exchange plans to recover the misappropriated funds and distribute 100% of the recovered assets back to impacted users via an airdrop.
Why should you pay attention?
- This move underlines exchanges' growing reliance on legal recourse to handle manipulation cases in decentralized and relatively opaque markets.
- The trading abnormality event shines a light on the vulnerabilities of smaller, low-liquidity tokens like VOXEL and how coordinated groups can exploit market-making algorithms on centralized platforms.
- The fact that the exchange plans to release a full incident report clarifying the details of the manipulation signals a form of emphasis on transparency and accountability.
Who said what?
- Xie Jiayin, Head of Asia at Bitget, stated on X:
“Bitget will issue eight lawyers' letters in succession. The professional wool interest groups associated with these eight accounts improperly gained more than $20 million.”
- Jiayin added:
“All recovered funds will be fully distributed to users via airdrop.”
- He also mentioned:
“Accounts outside of these eight, who participated between 16:00-16:30 on April 20 and withdrew funds, need not worry — they will not be held responsible.”
- The Head of Asia at Bitget also noted:
"We will release a complete accident report on the VOXEL incident as soon as possible to restore the truth of the incident."
Zooming out:
- The incident reflects the increasing sophistication of arbitrage and manipulation strategies targeting niche crypto markets, particularly those with lower liquidity barriers.
- Bitget’s swift rollback of trades and public disclosure of legal steps showcases a maturing approach to crisis management among centralized exchanges.
- As exchanges aim to maintain trust and market integrity, regulatory bodies may look more closely at these self-policing actions when evaluating future frameworks for crypto oversight.
