Bitget Freezes $1.1 Million Following $388 Million Cyberattack
- Bitget has frozen approximately $1.1 million of the nearly $388 million stolen in a recent cyberattack.
- CEO Gracy Chen stated the exchange is not expecting significant recovery of funds.
- Withdrawals for major cryptocurrencies like bitcoin and ether have resumed.
Approximately $1.1 million of the nearly $388 million stolen from crypto exchange Bitget in last week’s cyberattack has been frozen as the platform works to trace and recover assets.
CEO Gracy Chen clarified in an email interview with CNBC that the frozen assets have not necessarily been returned to the exchange and did not disclose how much had been recovered.
During an appearance on CNBC’s “Squawk Box Europe,” Chen expressed her expectation of limited recovery, referencing past incidents with cryptocurrency exchange hacks. She emphasized the responsibility of exchanges to demonstrate robust user protection, especially when issues arise.
Bitget confirmed that user account balances remained unaffected by the incident. Before the hack, the exchange valued its protection fund at more than $464 million; following the attack, this fund fell below $200 million but has since been restored to over $300 million. Chen noted that this replenished fund is publicly verifiable on-chain and is distinct from reserves that back customer balances.
The latest Proof of Reserves from Bitget, based on a snapshot from September 29, indicated a self-reported overall reserve ratio of 131%, with all 19 covered assets backed above 100%.
“We restored the Fund using Bitget’s own capital,” Chen said. “The financial impact is being absorbed by Bitget rather than passed on to our users.”
Investigation reports published on September 30 by Mandiant, part of Google Cloud, and blockchain security firm SlowMist, revealed that attackers compromised two third-party security products before accessing Bitget’s production wallet systems.
SlowMist identified that the earliest malicious activity in the logs dated back to August 31, exploiting a previously unknown or zero-day vulnerability in one of the products. The attackers gained privileged internal access and bypassed the standard customer-facing withdrawal processes without stealing private keys, according to Mandiant.
Chen described the attack method as “quite sophisticated,” and noted that the attackers deleted traces post-transfer to hinder further investigation.
Neither investigation report specified the compromised security products. When questioned, Chen refrained from disclosing further vendor or product details, expressing concerns about introducing additional security risks by releasing information beyond the findings already published.
Although the reports did not directly attribute the attacks to North Korea, Chen indicated that preliminary technical indicators aligned with known North Korean hacking groups. “We will have to wait further for more details on this,” she told CNBC.
Withdrawals for bitcoin, ether, and USDT have resumed, and Bitget has scheduled withdrawals for other cryptocurrencies, as well as fiat and peer-to-peer services, to restart on Friday.
News Courtesy of CNBC
