In brief
- Bitget is pursuing legal action against eight accounts linked to a "professional arbitrage group."
- A VOXEL trading surge triggered suspicions of alleged market manipulation.
- The incident raises fresh concerns over risk controls and market integrity in the industry.
Crypto exchange Bitget is taking legal action against eight accounts it accuses of manipulating VOXEL token trading and profiting more than $20 million during a trading surge on April 20.
Bitget’s Chinese representative, Jiayin Xie, said on X on Saturday that legal letters had been sent to the accounts, believed to be part of a "professional arbitrage group."
Victoria, Seychelles-headquartered Bitget said it will distribute all recovered funds to its users through an airdrop.
The announcement follows an episode last week when the price of VOXEL—the native token of Polygon-based game Voxie Tactics—exploded in volume.
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The price surged by more than 560% compared to 48 hours earlier, increasing from $0.021 to $0.139. It is currently trading at $0.074, according to CoinGecko, down 47% since the incident.
On the same day, Bitget flagged "abnormal activity" in VOXEL/USDT perpetual futures trading, noting suspicious volumes and price swings. Certain accounts were temporarily suspended from trading, depositing, and withdrawing.
While Bitget says most users were unaffected, the exchange still hasn’t disclosed who exactly was behind the activity or what technical issues allowed it to happen. “We will release a complete report on the VOXEL incident as soon as possible,” Xie added.
On X, crypto traders have pointed to a suspected malfunction in Bitget’s market-making technology. Others made comparisons between casinos suing gamblers for winning the jackpot.
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Chinese language accounts also shared a post by Bitget CEO Gracey Chen that slammed the response of the DEX Hyperliquid to being exploited as "immature, unethical, and unprofessional," warning it risked becoming "FTX 2.0."
Hyperliquid was forced to delist its JELLY perpetual futures after a liquidation exploit in March. In another incident, Binance also recently expelled two market makers tied to price crashes in GPS, SHELL, and MOVE tokens.
Xie responded that “all the major market makers in the world have settled in Bitget,” but declined to reveal who its market makers are for confidentiality reasons.
Bitget did not immediately respond to a request for comment.
Edited by Sebastian Sinclair
