Bitget Takes Legal Action Regarding VOXEL Token Manipulation

Background: Abnormal Price Increase of VOXEL

VOXEL is the native token of Voxie Tactics, a blockchain game with a relatively low trading volume, making it an easy target for manipulation by unusual activities. According to data from CoinGecko, the price of VOXEL recorded a 4-hour candle that increased by 200% on the morning of April 20, 2025, before falling sharply afterwards. The community quickly discovered a bug in Bitget's market maker bot, causing the price of VOXEL to fluctuate wildly with a cycle of increasing by 10% and then immediately falling every 3 seconds. Some traders took advantage of this vulnerability, continuously opening long and short positions, earning huge profits in a short period of time.

Bitget responded with a statement on the evening of April 20, stating that it had detected unusual trading activity on the VOXEL/USDT futures contract from 15:00 to 15:30 (Vietnam time). The exchange immediately suspended trading, deposits, and withdrawals of the suspected accounts, and activated its risk control system to protect other users. Bitget's next move was to reverse the allegedly manipulative trades and pledged to compensate affected users.

Bitget's Legal Action: Strategy and Consequences

On April 27, 2025, Bitget announced that it was pursuing legal action against 8 accounts accused of market manipulation, with a total illegal profit of more than 20 million USD. These accounts are suspected of exploiting the exchange's technical errors for personal gain. Bitget emphasized that the investigation will be conducted transparently, and if the funds are recovered, all will be redistributed to users in the form of airdrops.

The legal action received mixed reactions from the community. Some users, like Andrew_Thacker9 on X, supported Bitget’s handling of the matter, arguing that targeting eight specific accounts and leaving the matter to law enforcement was transparent and fair. They also appreciated Bitget’s commitment to redistributing the recovered funds to users. However, dissenters criticized Bitget for technical errors stemming from its own systems. User @yuyue_chris argued that the incident exposed the shortcomings of centralized exchanges, where the costs of manipulation are low, and called the cryptocurrency industry a “casino” lacking leadership from reputable leaders.

The community also questioned the real cause of the incident. While Bitget initially accused “several users of market manipulation,” legal documents later suggested that the incident may have been caused by a “technical error” on the exchange itself, leading to the unusual volatility. X user @DeFi8362 asked Bitget to clarify whether the error was caused by a user attack or internal negligence, and who was actually at fault – the exchange or the market makers.

Overview of the Compensation Agreement

• Compensation Subjects:

  • Users suffered losses due to a technical error in Bitget's market maker bot, which resulted in abnormal price fluctuations of VOXEL/USDT from 15:00 to 15:30 (UTC) on April 20, 2025.

  • Specific cases include people being charged incorrect transaction fees or having their profits/losses incorrectly recorded after the exchange performed a rollback.

• Implementation Process:

  • Bitget has conducted a second internal audit to address complaints about misleading transaction fees and inaccurate profit/loss calculations.

  • Users can contact Bitget support center to request answers or complaints regarding the compensation process.

• Commitment to Transparency:

  • Bitget confirmed that the incident was not caused by a system exploit or internal error, but stemmed from unusual trading activity of some accounts. However, the exchange has not released details about the specific cause or the identities of the accounts involved.

  • The funds recovered from the 8 accounts accused of manipulation (estimated at over $20 million) will be redistributed to users in the form of an airdrop if the legal proceedings are successful.

Conclude

The Bitget VOXEL token manipulation incident was a wake-up call for the cryptocurrency industry, exposing both the potential and risks of centralized exchanges. Bitget’s legal action against the eight accounts in question was a necessary step to protect users, but it also raises questions about the exchange’s responsibility for the technical error. By promising to compensate and redistribute recovered funds, Bitget has a chance to strengthen its reputation, but only if it thoroughly addresses its internal issues and is transparent about its handling of the matter.

In a volatile market, the VOXEL incident is a reminder that cryptocurrency development must go hand in hand with responsibility and security. Can Bitget turn the crisis into an opportunity to lead the race for transparency and security? The answer depends on their next actions in the coming months.