Bitget, one of the largest crypto exchanges, has just suffered a $351.6 million hot wallet drain following a major hack. The incident was initially flagged by Arkham Intelligence, which noted massive AVAX, BNB, ETH, and stablecoin withdrawals from said wallet, with subsequent swapping to ETH.
Source: Arkham Intelligence
In a recent statement, Bitget CEO Gracy Chen said the incident was contained in a hot wallet, and that funds in its cold wallets were unaffected. The attacker compromised a critical back-end system in the wallet infrastructure, spoofed transaction history, then triggered withdrawal authorization, all without private key access.
At the moment, Bitget has suspended withdrawals temporarily as it conducts a security review. Meanwhile, depositing and trading are ongoing as usual, and user balances on the exchange remain secure.
Furthermore, the exchange has flagged the receiving address and is working with law enforcement authorities and on-chain security firms in an attempt to recover the stolen funds. Bitget now expects to publish a full incident report within 24 hours, detailing how the incident happened and remediation measures.
Importantly, Chen has guaranteed that Bitget will cover the fund loss in full through its User Protection Fund, which currently holds over $464 million. The exchange has also taken proactive measures to prevent additional fund theft.
Bitget’s cyberattack now ranks as the biggest so far this year in terms of total funds lost. Following closely are the Liquid Network $320 million exploit and KeloDAO’s 292 million hack.
While the first half of the year broke the record for the total number of cybersecurity incidents in the crypto industry, losses recorded were much lower than those in previous years. The Bitget event, however, marks the single biggest point of failure this year.
According to Cybersecurity experts at Certik, crypto cybersecurity has seen a massive structural shift this year. Rather than exploiting smart contract bugs, attackers focus on infrastructure compromise, hot wallet theft, and private key compromise. This eases draining large amounts of funds all at once.
On the flip side, Bitget has guaranteed users 100% fund recovery – a committment which previous hacked DeFi protocols found hard to make.
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