Questions and truth: Did Bitget choose the difficult but right direction in the VOXEL incident?

Original author: OneShotBug

1. Background and Analysis Perspective

On April 20, 2025, the global kriptocurrency trading platform Bitget encountered a widely discussed abnormal trading incident. In just half an hour, the price of the VOXEL/USDT perpetual contract rose abnormally, and the trading volume increased dramatically, seriously deviating from the normal market conditions. Afterwards, Bitget announced a rollback of the transactions during the abnormal period and took a series of measures, including freezing the accounts involved, recovering unjust gains, and airdropping to ordinary users.

This incident quickly triggered market discussions on whether the transaction rollback was legal and reasonable and whether the platform was fully responsible. As a rare large-scale rollback operation in the cryptocurrency market in recent years, this handling not only involved user rights protection, but also touched on issues in multiple dimensions such as platform risk control, trading ethics and industry norms.

This article will first restore the full picture of the incident from an objective and rational perspective, then analyze the behaviors and responsibilities of all parties, and especially through a review of the rollback cases in the traditional financial market, explore the rationality of Bitgets choice of transaction rollback. Ultimately, we hope to provide readers with a clear and fair basis for judgment, rather than being swayed by emotional disputes.

2. The whole story of the VOXEL abnormal incident: timeline and cause analysis

1. Timeline review

From 16:00 to 16:30 (UTC+8) on April 20, 2025, the VOXEL/USDT perpetual contract on the Bitget platform suddenly fluctuated violently. In just 30 minutes, the price of the VOXEL contract soared from about $0.30 to nearly $1.00, an increase of more than 230%. During the same period, the trading volume of the VOXEL contract soared to more than $12 billion, surpassing the Bitcoin contract and becoming the number one in the entire platform. A large number of users conducted high-frequency transactions during the abnormal period, and market sentiment was extremely chaotic.

2. Description of abnormal situation:

During the incident, the transaction price of VOXEL contracts was seriously out of the normal market price. High-leverage small orders were intensively traded, and some pending orders were quickly swept away, and the order book became extremely weak in an instant. Pazar data shows:

• The transaction depth has dropped by more than 90% compared to normal conditions;

• The bid-ask spread once widened to more than 10 times the normal level;

• The highest price represented a premium of nearly 300% over the reference spot market price.

The normal trading logic was completely broken, prices showed a spiral unilateral surge, and other currency markets on the platform were also affected by a short-term impact, which triggered a chain reaction.

3. Preliminary cause analysis:

According to Bitget official announcement, on-chain analysis agencies and industry observers, the main causes of the incident include:

• Market maker system abnormality: Some market maker robots on the Bitget platform experienced system failures around 16:00 on April 20 and were unable to continue to provide reasonable quotes, causing the market to instantly lose normal liquidity support.

• Arbitrage group manipulation: After detecting system anomalies, at least 8 professional arbitrage accounts quickly rushed in, using high leverage (some up to 50-100 times) to open positions, repeatedly pushing up prices and quickly closing positions for arbitrage, causing prices to become further distorted. The qntxxx team involved in the arbitrage also explained its operating methods and past behaviors in the interview (see: https://mp.weixin.qq.com/s/wD2uSE_B5Pz0yZfjeo7pLw for details).

• The risk control mechanism was not triggered in time: Some of Bitget’s risk control parameters failed to identify extreme transaction structures, delaying the initiation of market circuit breakers or trading limit controls.

Comprehensive analysis shows that this is a typical complex market event of technical system fragility + artificial arbitrage amplification.

4. Countermeasures taken by Bitget

After the incident, Bitget organized an emergency response in a short time and took the following measures (original link https://x.com/xiejiayinBitget/status/1916475194383688167 ):

• Transaction rollback: All transaction records of the VOXEL/USDT contract between 16:00 and 16:30 on April 20 were checked and rolled back, canceling a total of approximately US$12 billion in abnormal transaction volume.

• Account freezing: 8 accounts suspected of malicious arbitrage were frozen, with a total frozen fund amount of more than 20 million US dollars. The legal accountability process was initiated and a lawyers letter was sent to the relevant parties.

• User airdrop: We promise to return 100% of the recovered ill-gotten gains to the affected ordinary user accounts in an airdrop mode.

• System upgrade and review: Simultaneously launch an emergency repair plan for the internal risk control system, commit to publish a complete accident investigation report, and publicize subsequent improvement measures.

Bitget officials emphasized that the losses caused by this incident will be borne by the platform itself, and ordinary users will not be held accountable. They also specifically stated:

• The principle of rollback is to correct abnormal profits and losses, and users principal and handling fees will not be lost. After the rollback is completed, the handling fees of some users were wrongly deducted, and the handling fees of the relevant accounts have been returned. No user will suffer losses in principal and handling fees in this incident.

• Before the risk control measures came into effect, the abnormal profit withdrawn from the platform was 38.31 million USDT. Except for the abnormal profit of approximately 20 million USDT involving the 8 accounts mentioned earlier, the other withdrawn funds will never be pursued.

From here we can see that all of Bitget’s current actions are only aimed at 8 abnormal accounts, and the losses of the affected users have been fully compensated.

III. Arbitrage Behavior and Platform Responsibility: Attribution of Behavior by Each Party

1. Analysis of arbitrage group behavior

In this incident, after discovering anomalies in the Bitget market-making system, some professional arbitrage groups quickly organized high-frequency, high-leverage transactions, using extremely low costs to push up VOXEL contract prices, creating artificial market distortions, and then fleeing with profits after prices were pushed up.

From the perspective of operation, this type of arbitrage is not based on real market supply and demand relationships or a reasonable price discovery process, but rather an organized exploitation of platform system loopholes to obtain abnormal profits that are seriously disproportionate to market risks.

In traditional financial markets, similar behaviors are usually identified as market manipulation or exploitation of system failures, which are clearly prohibited. Such behaviors undermine market fairness and cause direct damage to normal traders.

Therefore, although it is based on the trading mechanism on the surface, from the perspective of market integrity, such arbitrage behavior actually lacks legitimacy. The platform adopts the method of rolling back transactions, freezing accounts and recovering profits, which is in line with the industrys conventional practice of ensuring the fairness of transactions in extreme circumstances.

2. Analysis of Bitget Platform Behavior

(1) System responsibility

As the operator of the trading platform, Bitget exposed obvious technical and risk control defects in this incident. Specifically, the market-making system anomalies were not detected and identified in a timely manner, and the risk control mechanism failed to effectively prevent the transaction price from getting out of control, which ultimately led to market disorder and actual losses to users.

As a platform, Bitget should bear the unshirkable direct responsibility for this systemic risk out of control. After the incident, Bitget publicly admitted that the platforms risk control failed and promised to conduct a system review and upgrade.

(2) Emergency response

After the incident, Bitget initiated an emergency response, taking measures including:

• Roll back VOXEL contract transaction records during the abnormal period;

• Freeze 8 accounts suspected of abnormal arbitrage to prevent illegal profit outflow;

• Announce that 100% of the recovered ill-gotten gains will be airdropped to ordinary users affected;

• It is clearly stated that the positive gains of ordinary users due to transactions during abnormal periods will not be traced back;

• Initiated internal investigation and system improvement measures, with plans to publicly communicate the results of the investigation.

These measures have alleviated the direct impact of the incident on ordinary users to a certain extent, and retail investors funds, normal profits and transaction fees will not be lost.

(3) Responsibility and follow-up actions

Bitget clearly had systemic responsibility in this incident, but it took a number of remedial measures afterwards to restore user confidence and market order, such as airdropping the recovered funds and not tracing the profits of ordinary users. These measures show that it chose to bear the economic consequences when faced with an accident.

From a broader perspective, exchanges must continue to strengthen risk control before the event, monitoring during the event, and transparent processing after the event in the rapidly developing crypto trading industry. Only by building a risk management system on a more mature and self-disciplined basis can similar incidents be effectively prevented.

IV. Historical Lessons: Case Studies on Abnormal Transactions in Traditional Markets and Cryptocurrency

In the traditional financial industry, when the transaction price deviates seriously from the reasonable range due to technical failure, system abnormality or extreme operation, the exchange will usually cancel, adjust or roll back the abnormal transaction according to clear rules. In the field of cryptocurrency, similar incidents have actually occurred in major exchanges, and similar measures will be adopted to deal with special situations. The behavior of illegally profiting by exploiting system loopholes is also often investigated for criminal responsibility in accordance with the law, and the improper profits are recovered and eventually sentenced to prison.

The following reviews the mainstream market’s approach and legal attitude towards extremely abnormal transactions through several typical cases.

1. The US stock market “flash crash” on May 6, 2010

On May 6, 2010, the U.S. stock market experienced a rare flash crash: the Dow Jones Index plummeted nearly 1,000 points in five minutes, and the market value evaporated by about $1 trillion in an instant. Investigations showed that a large mutual fund company (Waddell Reed) sold futures contracts on a large scale through algorithmic programs that day, and high-frequency traders (HFTs) repeatedly transferred contracts, exacerbating market volatility and triggering a chain reaction.

At this time, British trader Navinder Singh Sarao used the spoofing strategy to create false liquidity, further amplifying the crash effect. Individual stock prices fluctuated extremely, for example, Procter Gambles stock price once plunged nearly 37%.

After the incident, the U.S. Securities and Değişme Commission (SEC) and the Commodity Futures Trading Commission (CFTC) jointly investigated and canceled more than 6,000 abnormal transactions based on the obvious error rule. The regulator subsequently introduced a circuit breaker mechanism to prevent similar extreme events in the future.

2. Deutsche Bank’s “Fat Finger” Operation Error in June 2015

In June 2015, a junior employee of Deutsche Bank was in charge of the foreign exchange sales teams trading operations while his supervisor was on vacation. When processing a transaction with a US hedge fund client, the employee mistakenly entered the net amount to be paid as gross amount, resulting in a huge amount of US$6 billion being paid to the client by mistake. Deutsche Bank discovered the error the next day and immediately took measures to recover the entire amount.

The bank subsequently reported the incident to regulators such as the UK Financial Conduct Authority (FCA), the European Central Bank (ECB) and the US Federal Reserve System (Fed). The incident exposed Deutsche Banks shortcomings in technical and operational controls, especially the lack of supervision of key positions and the systems automatic detection mechanism. After the incident, Deutsche Bank conducted a comprehensive review of its internal control system and announced major reforms under the leadership of its new CEO John Cryan, aimed at simplifying the management structure, improving operational efficiency and strengthening risk control.

3. In June 2024, a technical failure at the New York Stock Exchange caused abnormal trading of Berkshire Hathaway and other stocks

On June 3, 2024, a technical failure occurred at the New York Stock Exchange, causing abnormal price fluctuations in many stocks, including Berkshire Hathaway Class A shares. Berkshire Class A shares plummeted from more than $620,000 to $185.10, a drop of 99.97%. This abnormal price display lasted for about two hours, during which the trading volume exceeded 3,000 shares.

The root cause of the failure was an error in the industry price bands issued by the Consolidated Tape Association (CTA), which triggered the Limit Up-Limit Down (LULD) mechanism, causing the suspension of trading of multiple stocks. CTA later said that the problem may have been caused by a new software version and that it was solved by switching to a software version in a backup data center.

The New York Stock Exchange subsequently announced that it would cancel all Berkshire Class A stock transactions at $603,718.30 or below between 9:50 a.m. and 9:51 a.m. Eastern Time, and made it clear that these erroneous transactions would be deemed invalid and that traders would have no right to appeal the decision.

In addition, other affected stocks include Barrick Gold, NuScale Power and Chipotle, all of which experienced similar price anomalies and trading suspensions.

4. 2015 Maonan District Zhang Peng profited from exploiting system loopholes

In 2015, the Peoples Court of Maonan District, Maoming City, heard a case involving illegal profiteering by exploiting system loopholes in a virtual asset trading platform (Case No.: (2015) Maonan Faxingchu No. 112).

The case shows that in March 2014, the defendant Zhang Peng discovered through the Internet that a virtual currency trading platform had a system loophole that doubled the funds when placing an order and then canceling it. Zhang Peng then registered multiple UID accounts and repeatedly exploited the loophole to illegally profit RMB 141,866. Afterwards, he transferred the illegally obtained funds to other accounts and used them to purchase the virtual currency Litecoin, which he further cashed out RMB 103,431 through sales.

The court held that Zhang Pengs behavior was to steal the platforms property for the purpose of illegal possession, which constituted the crime of theft. In the end, the court sentenced Zhang Peng to three years and six months in prison and a fine of RMB 10,000.

Summary and comparison:

The above cases show that in traditional financial markets, when prices deviate significantly from reasonable ranges due to system failures, operational errors or extreme market fluctuations, exchanges usually cancel, adjust or roll back abnormal transactions based on clear rules. Such measures are intended to correct market disorders, maintain transaction fairness, and prevent a single event from triggering a systemic chain reaction.

In this VOXEL contract anomaly incident, Bitget took countermeasures including rolling back transactions, freezing abnormal accounts, and recovering abnormal profits. These treatment methods, to a certain extent, reflect the similarity with the handling logic of traditional financial markets in dealing with extreme transaction anomalies, but the risk characteristics of the encrypted asset field also remind the platform that there is still room for improvement in pre-emptive prevention and control.

5. Rational summary: Enlightenment on risk response and system construction of crypto trading platforms

Bitget exposed kesinlikleciencies in system stability and risk control mechanisms in this VOXEL contract transaction abnormality incident. When the platform lost trading depth and the market-making system was abnormal, it failed to trigger protection measures in a timely manner, which directly led to serious distortion of market prices and the creation of arbitrage opportunities.

After the incident, Bitget took a series of countermeasures including transaction rollback, account freezing, and airdropping to users, striving to restore order in the chaotic situation. These actions have alleviated the impact of the anomaly to a certain extent, and also reflected the coexistence of the platforms experience and shortcomings in crisis management.

Looking back at similar cases in the traditional financial market, without exception, the cancellation or rollback of transactions under abnormal circumstances is to protect the basic order and fairness principles of the market. Bitget’s handling of this case has, to a certain extent, continued this risk response logic.

However, the VOXEL incident also left its own mark on the crypto industry. The Bitget lawyers letter storm will undoubtedly become an important footnote in the history of the cryptocurrency circle. It not only concerns the confrontation between technical loopholes and human greed, but also touches on the deep collision between legal boundaries and industry culture.

In this incident, simply taking sides is meaningless.

What is really worth thinking about is how trading platforms can maintain safety bottom lines during expansion, how arbitrageurs can avoid crossing legal red lines when pursuing profits, and how the entire industry can grow through repeated shocks and repairs.

Perhaps, more important than the event itself is how we choose to face the future.

This article is sourced from the internet: Questions and truth: Did Bitget choose the difficult but right direction in the VOXEL incident?

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