Questioning and Truth: Did Bitget Choose a Difficult but Correct Direction in the VOXEL Incident?

Author: OneShotBug

I. Background of the Incident and Analytical Perspective

On April 20, 2025, the global cryptocurrency trading platform Bitget experienced a trading anomaly that sparked widespread discussion. Within just half an hour, the VOXEL/USDT perpetual contract saw an abnormal price surge, with trading volume dramatically increasing, severely deviating from normal market conditions. In response, Bitget announced a rollback of trades during the anomaly period and implemented a series of measures, including freezing involved accounts, recovering improper gains, and airdropping to regular users.

This incident quickly triggered market discussions about the "legitimacy and reasonableness of trade rollbacks" and "whether the platform's responsibilities were fulfilled." As a rare large-scale rollback operation in the cryptocurrency market in recent years, this handling not only involves user rights protection but also touches on multiple dimensions such as platform risk control, trading ethics, and industry norms.

This article will objectively and rationally restore the full picture of the incident, analyze the behaviors and responsibilities of all parties involved, and particularly explore the reasonableness of Bitget's choice to rollback trades through a review of traditional financial market rollback cases. Ultimately, it aims to provide readers with a clear and fair basis for judgment, rather than being swayed by emotional controversies.

II. Timeline and Cause Analysis of the VOXEL Anomaly Incident

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 experienced severe fluctuations. Within just 30 minutes, the price of the VOXEL contract skyrocketed from approximately $0.30 to nearly $1.00, an increase of over 230%. During the same period, the trading volume of the VOXEL contract surged to over $12 billion, surpassing Bitcoin contracts to become the highest trading volume on the platform. A large number of users engaged in high-frequency trading during the anomaly, leading to extreme market confusion.

2. Description of the Anomaly:

During the incident, the transaction price of the VOXEL contract severely deviated from the normal market price, with high-leverage small orders being densely executed, and some limit orders being rapidly cleared, causing the order book to become extremely thin. Market data showed:

• Transaction depth decreased by over 90% compared to normal conditions;
• The bid-ask spread once widened to over 10 times the normal level;
• The highest price compared to the reference spot market price had a premium close to 300%.

Normal trading logic was completely disrupted, with prices exhibiting a "spiral one-sided surge," and the markets for other cryptocurrencies on the platform were also temporarily impacted, triggering a chain reaction.

3. Preliminary Cause Analysis:

Based on Bitget's official report, on-chain analysis institutions, and industry observers' comprehensive speculation, the main causes of the incident include:

• Market Maker System Anomaly: Some market maker bots on the Bitget platform experienced system failures around 16:00 on April 20, unable to continuously provide reasonable quotes, leading to an instant loss of normal liquidity support in the market.
• Arbitrage Group Manipulation: After detecting the system anomaly, at least 8 professional arbitrage accounts quickly entered the market, using high leverage (some reaching 50-100 times) to open positions, repeatedly driving up prices and quickly closing positions for arbitrage, further distorting prices. The participating arbitrage team qntxxx also provided an explanation of their operational methods and past behaviors during an interview.
• Risk Control Mechanism Not Triggered in Time: Some risk control parameters of Bitget failed to recognize the extreme transaction structure, delaying the initiation of market halts or trading limits.

In summary, this is a typical composite market event of "technical system fragility + human arbitrage amplification."

4. Measures Taken by Bitget

After the incident, Bitget quickly organized an emergency response and implemented the following measures:

• Trade Rollback: Reviewed and rolled back all transaction records of the VOXEL/USDT contract during the period from 16:00 to 16:30 on April 20, canceling a total of approximately $12 billion in abnormal trading volume.
• Account Freezing: Frozen 8 accounts suspected of malicious arbitrage, with a total frozen amount exceeding $20 million, and initiated legal accountability processes, sending legal letters to relevant parties.
• User Airdrop: Committed to returning 100% of the recovered improper gains to affected regular user accounts through an airdrop model.
• System Upgrade and Review: Simultaneously launched an emergency repair plan for the internal risk control system and committed to publishing a complete accident investigation report, publicly disclosing subsequent improvement measures.

Bitget emphasized that the losses caused by this incident would be borne by the platform internally, without holding regular users accountable, and specifically stated:

• The principle of rollback is to correct abnormal profits and losses, and users' principal and transaction fees will not incur losses. After the rollback is completed, some users' transaction fees were mistakenly deducted, and the fees for relevant accounts have been refunded, ensuring that no user suffers losses in principal or fees from this incident.
• Before the risk control measures took effect, the abnormal profits withdrawn from the platform amounted to 38.31 million USDT. Apart from the approximately 20 million USDT in abnormal profits related to the aforementioned 8 accounts, all other withdrawn funds will never be pursued.

From this, it can be seen that Bitget's current actions are solely targeting the 8 abnormal accounts, fully compensating the affected users for their losses.

III. Arbitrage Behavior and Platform Responsibility: Attribution of Actions

1. Analysis of Arbitrage Group Behavior

In this incident, some professional arbitrage groups quickly organized high-frequency, high-leverage trading upon discovering the anomaly in Bitget's market-making system, using extremely low costs to drive up the price of the VOXEL contract, creating artificial market distortions, and profiting from the price increase.

From an operational perspective, this type of arbitrage is not based on real market supply and demand relationships or reasonable price discovery processes, but rather is an organized exploitation of platform system vulnerabilities to obtain abnormal profits that are severely disproportionate to market risks.

In traditional financial markets, similar behavior is typically classified as market manipulation or exploitation of system failures, which are explicitly prohibited. Such behavior undermines market fairness and directly harms normal traders.

Therefore, although it appears to be based on trading mechanisms, from the perspective of market integrity, this type of arbitrage behavior actually lacks legitimacy. The platform's actions of rolling back trades, freezing accounts, and recovering profits align with the industry's conventional practices to ensure trading fairness in extreme situations.

2. Analysis of Bitget's Platform Behavior

• System Responsibility

As the operator of the trading platform, Bitget exposed significant technical and risk control deficiencies in this incident. Specifically, the market-making system anomaly was not monitored and identified in a timely manner, and the risk control mechanisms failed to effectively prevent transaction prices from spiraling out of control, ultimately leading to market disorder and actual losses for users.

For this systemic risk failure, Bitget, as the platform party, should bear an inescapable direct responsibility. After the incident, Bitget publicly acknowledged the failure of its risk control and committed to conducting a system review and upgrade.

• Emergency Response

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

• Rolling back the trading records of the VOXEL contract during the anomaly period;
• Freezing 8 accounts suspected of abnormal arbitrage to prevent illegal profits from flowing out;
• Announcing that the recovered improper gains will be 100% airdropped to affected regular users;
• Clearly stating that it will not pursue regular users for any positive gains resulting from trades during the anomaly;
• Initiating internal investigations and system improvement measures, planning to publicly report the investigation results.

These measures somewhat alleviated the direct impact of the incident on regular users, ensuring that retail investors' funds and normal profits, including transaction fees, would not incur losses.

• Responsibility and Subsequent Actions

Bitget has clear systemic responsibility in this incident, but it has taken several remedial measures afterward to restore user confidence and market order, such as airdropping recovered amounts and not pursuing regular users' profits, indicating its choice to bear the economic consequences in the face of the incident.

From a broader perspective, exchanges in the rapidly developing cryptocurrency trading industry must continuously strengthen risk control, monitoring during transactions, and transparent handling of all aspects afterward. Only by establishing a risk management system on a more mature and self-disciplined basis can similar incidents be effectively prevented.

IV. Historical Reflection: Cases of Anomalous Trading Handling in Traditional Markets and Cryptocurrency

In traditional financial industries, when trading prices severely deviate from reasonable ranges due to technical failures, system anomalies, or extreme operations, exchanges typically cancel, adjust, or rollback anomalous trades based on clear rules. In the cryptocurrency field, major exchanges have also experienced similar incidents and would adopt similar means to respond to special situations, while behaviors that exploit system vulnerabilities for illegal profits are often pursued criminally, with improper gains recovered and ultimately resulting in imprisonment.

The following reviews multiple typical cases, reflecting how mainstream markets handle extreme anomalous trading and their legal attitudes.

1. The "Flash Crash" of U.S. Stocks on May 6, 2010

On May 6, 2010, U.S. stocks experienced a historically rare "flash crash": the Dow Jones Industrial Average plummeted nearly 1000 points within five minutes, with a market value evaporating by approximately $1 trillion. Investigations revealed that a large mutual fund company (Waddell & Reed) executed a massive sell-off of futures contracts through algorithmic programs, and high-frequency traders (HFT) exacerbated market volatility through repeated trading, triggering a chain reaction.

At this time, British trader Navinder Singh Sarao used a "spoofing" strategy to create false liquidity, further amplifying the crash effect. Individual stock prices experienced extreme volatility, with Procter & Gamble's stock price plummeting nearly 37% at one point.

After the incident, the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) jointly investigated and canceled over 6,000 anomalous trades based on the "obvious error" rule. Regulatory agencies subsequently introduced a circuit breaker mechanism to prevent similar extreme events in the future.

2. Deutsche Bank's "Fat Finger" Error in June 2015

In June 2015, a junior employee at Deutsche Bank was solely responsible for the trading operations of the foreign exchange sales team while their supervisor was on vacation. While handling a transaction with a U.S. hedge fund client, the employee mistakenly entered the "net amount" as the "total amount," resulting in an erroneous payment of $6 billion to the client. Deutsche Bank discovered the error the next day and immediately took measures to recover the entire amount.

The bank subsequently reported the incident to the UK's Financial Conduct Authority (FCA), the European Central Bank (ECB), and the U.S. Federal Reserve (Fed). This incident exposed deficiencies in Deutsche Bank's technical and operational controls, particularly the lack of supervision and automated detection mechanisms in critical positions. After the incident, Deutsche Bank conducted a comprehensive review of its internal control systems and announced significant reforms under the leadership of the new CEO, John Cryan, aimed at simplifying management structures, improving operational efficiency, and strengthening risk control.

3. Technical Failure at the New York Stock Exchange in June 2024 Causing Anomalous Trading of Berkshire Hathaway Stocks

On June 3, 2024, a technical failure at the New York Stock Exchange caused abnormal price fluctuations in several stocks, including Berkshire Hathaway Class A shares. The price of Berkshire Class A shares plummeted from over $620,000 to $185.10, a decline of 99.97%. This abnormal price persisted for about two hours, during which over 300 shares were traded.

The root cause of the failure was an error in the industry price band published by the Consolidated Tape Association (CTA), triggering the Limit Up-Limit Down (LULD) mechanism, which led to the suspension of trading in several stocks. The CTA later stated that the problem might have been caused by a new software version and resolved the issue by switching to a backup data center's software version.

The New York Stock Exchange subsequently announced the cancellation of all Berkshire Class A stock trades executed at prices of $603,718.30 or below between 9:50 AM and 9:51 AM Eastern Time, clearly stating that these erroneous trades would be deemed invalid, and traders would have no right to appeal this decision.

Additionally, other affected stocks, including Barrick Gold, NuScale Power, and Chipotle, also experienced similar price anomalies and trading suspensions.

4. The Zhang Peng Case in Maonan District in 2015 for Profiting from System Vulnerabilities

In 2015, the People's Court of Maonan District in Maoming City heard a case involving illegal profits obtained by exploiting system vulnerabilities on a virtual asset trading platform (Case No.: (2015) Maonan Criminal First No. 112).

The case revealed that in March 2014, the defendant Zhang Peng discovered a system vulnerability on a certain virtual currency trading platform that allowed "doubling funds by placing and then withdrawing orders." Zhang subsequently registered multiple UID accounts and repeatedly exploited the vulnerability, illegally profiting 141,866 yuan. He then transferred the illegally obtained funds to other accounts and used them to purchase the virtual currency "Litecoin," further converting it into 103,431 yuan through sales.

The court ruled that Zhang's actions constituted theft with the intent of illegal possession, secretly stealing the platform's property, and ultimately sentenced him to three years and six months in prison, along with a fine of 10,000 yuan.

Summary Comparison:

The above cases indicate that in traditional financial markets, when trading is severely disrupted due to system failures, operational errors, or extreme market fluctuations, exchanges typically cancel, adjust, or rollback anomalous trades based on clear rules. These measures aim to correct market disorder, maintain trading fairness, and prevent a single incident from triggering systemic chain reactions.

In the VOXEL contract anomaly incident, Bitget took response measures including rolling back trades, freezing abnormal accounts, and recovering improper profits. These handling methods somewhat reflect similarities to the logic of addressing extreme trading anomalies in traditional financial markets, but the risk characteristics of the cryptocurrency asset field also remind platforms that there is still room for improvement in preemptive risk control.

V. Rational Summary: Insights on Risk Response and Institutional Development for Cryptocurrency Trading Platforms

Bitget exposed deficiencies in system stability and risk control mechanisms during the VOXEL contract trading anomaly incident. The platform failed to trigger protective measures in a timely manner when trading depth was lost and the market-making system was abnormal, directly leading to severe price distortions and the emergence of arbitrage opportunities.

After the incident, Bitget implemented a series of response measures, including trade rollbacks, account freezes, and user airdrops, striving to restore order amid chaos. These actions somewhat alleviated the impact of the anomalies and reflected both the platform's experience and shortcomings in crisis management.

Reviewing similar cases in traditional financial markets, it is evident that cancellations or rollbacks of trades in anomalous situations are aimed at safeguarding the basic order and fairness principles of the market. Bitget's handling approach this time, to some extent, continues this risk response logic.

However, the VOXEL incident also leaves its own mark on the cryptocurrency industry. The "lawyer letter storm" involving Bitget will undoubtedly become an important footnote in the history of the cryptocurrency circle, as it concerns the clash between technical vulnerabilities and human greed, as well as the deep collision of legal boundaries and industry culture.

In this incident, simply taking sides is meaningless.

What truly deserves reflection is how trading platforms can uphold safety lines amid expansion, how arbitrageurs can pursue profits without crossing legal red lines, and how the entire industry can grow through repeated shocks and repairs.

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