Bitget Suspends Accounts After $12B VOXEL/USDT Trading Surge

On April 20, a sudden surge in trading volume for the VOXEL/USDT perpetual futures contract on the cryptocurrency exchange Bitget caught the attention of market participants. The volume exceeded $12 billion, significantly outpacing similar contracts on other exchanges, including Binance. The unusual activity was centered around VOXEL/USDT perpetual futures, where traders reported instant order fills, an anomaly that many attributed to a bug in the system. This bug allowed savvy traders to exploit unusual price behavior and rack up outsized profits.

Bitget quickly responded to the atypical metrics by suspending accounts suspected of market manipulation and rolling back irregular trades that occurred throughout the day. Traders who incurred losses during this period were offered compensation. While Bitget's response and remediation plan may have prevented lasting investor damage, the episode raised questions about how exchanges handle market makers, internal systems, and user safeguards. Despite promoting an open API and a global market maker program, Bitget has yet to disclose who was behind the April 20 activity or what technical factors led to it.

The lack of detailed information has fueled speculations similar to those surrounding breakdowns on Binance, where sudden price crashes of cryptocurrencies GoPlus (GPS) and MyShell (SHELL) in March led to the removal of an unnamed market maker. The lack of disclosure in both cases has added to the crypto industry's infamous rumor mongering. Traders and market participants pointed to rapid price fluctuations and a suspected bug in a "market maker" bot as the cause of VOXEL’s excessive volume. Orders placed within specific price bands filled instantly due to the suspected bug, allowing traders to execute high-leverage bets and boost their profits.

Bitget’s head of Asia, Xie Jiayin, stated that the exchange works with over 1,000 market makers and institutional clients, emphasizing that specific market maker identities could not be disclosed due to confidentiality agreements. Bitget CEO Gracy Chen confirmed that suspicious trades were between individual market participants, not the platform, and that a thorough review was being conducted. Chen reiterated that Bitget’s security infrastructure is designed to catch irregularities in real time, as it did in this case.

Concerns over market manipulation in the cryptocurrency industry have been intensifying. In early March, the prices of two tokens, GPS and SHELL, crashed in tandem with their Binance listings. The exchange’s investigation found that the two tokens employed the same unnamed market maker, which was subsequently removed from the platform. Binance confiscated the proceeds to help fund compensation efforts for GPS and SHELL traders. Without a suspect to blame, social media users began pointing fingers at several market makers and trading firms, who denied any involvement.

Both Bitget and Binance’s cases show that even the largest centralized exchanges (CEXs) aren’t immune to market manipulation or traders exploiting platforms for profits. A recent case on decentralized exchange (DEX) Hyperliquid shows the issue isn’t confined to CEXs. In late March, a whale allegedly exploited the liquidation parameters on Hyperliquid, resulting in the delisting of the platform’s JELLY perpetual futures product. Hyperliquid then announced a compensation plan for affected users, similar to how Bitget responded to its own VOXEL drama.

Bitget’s VOXEL episode may have been contained, and Hyperliquid’s users may be compensated, but the broader pattern is harder to ignore for traders. As platforms scramble to maintain trust, the industry’s vulnerability isn’t just the bugs or exploits, but the silence that follows them. The lack of transparency and detailed information about the incidents has left traders and market participants with more questions than answers, highlighting the need for better safeguards and disclosure practices in the cryptocurrency industry.