- Bitget froze withdrawals after a hack drained $351.6 million from its hot wallet, but assured that its Protection Fund fully covered the losses.
- Trading and deposits on the UEX were unaffected, and it’s currently working to restore withdrawals.
Bitget, a leading universal exchange (UEX), has been on a roll, hitting major milestones this year. However, it recently hit a wall as a hacker drained $351.6 million from its hot wallets.
Now, some are amplifying the incident with FUD (Fear, Uncertainty, Doubt), suggesting that the company is done for. The latest developments suggest otherwise.
These developments show Bitget’s user-centric approach playing out in real time.
The Bitget Hacking Incident
In a security notice shared by Bitget CEO Gracy Chen, the UEX detected multiple transfers on its network on Thursday at around 18:31 UTC. The event immediately triggered its emergency response.
Despite the move, the attacker already drained assets valued at approximately $351.6 million. As a result, the company froze all withdrawals, which worried several users.
Users’ Funds are Safe
Bitget explained that the withdrawal freeze is temporary but necessary as a precautionary measure while a security review is ongoing. It aims to prevent further withdrawals by bad actors while law enforcement and on-chain security firms conduct their investigation.
Meanwhile, the company assured users that their funds are safe as Bitget’s User Protection Fund covered the losses. The initiative was a proactive measure against incidents exactly like these.
So far, the amount lost in the hacking incident fell within the program’s $464 million coverage, ensuring that no customer will bear the financial burden of the breach. Chen emphasized that every dollar in customers’ balances is accounted for, while deposits and trading remain fully operational.
In its update, Bitget said that multiple technical teams are currently working in parallel on system remediation and security enhancements. They’re also working to restore withdrawals.
Chen didn’t commit to a specific window for the withdrawal restoration. Nonetheless, she agreed with pseudonymous Chinese crypto commentator Sea’s assessment that it could be “as quick as a few hours, as long as a few days,” but “it shouldn’t take weeks.”
Nature of the Bitget Hack
Chen revealed her security team found that hackers took advantage of a vulnerability in a key backend system of Bitget’s hot wallet service. The culprit then used the exploit to transfer information and force authorization in its signing process.
The Bitget CEO has ruled out private key leakage, suggesting the worst-case scenario was averted thanks to its combination of proactive and reactive efforts. Additionally, she confirmed that damage control is complete and that the platform’s cold wallets were unaffected.
There is no longer any risk of further fund outflows. Still, a technical probe into the perpetrator’s “specific intrusion methods” is underway to prevent a repeat of the incident and further strengthen UEX’s security capabilities.
