Crypto exchange Bitget has taken a bold step by initiating legal action against eight accounts that it believes manipulated the trading of VOXEL tokens, resulting in profits exceeding $20 million during a sudden market surge on April 20.
According to Jiayin Xie, the head of Asia at Bitget, the company has sent legal letters to the accounts suspected of being operated by a professional arbitrage group. Bitget, based in Victoria, Seychelles, has stated its intention to return any recovered funds to users through an airdrop.
The incident unfolded when VOXEL, the token associated with the game Voxie Tactics on the Polygon network, experienced an unprecedented spike in trading volume last week. At one point, the trading volume of VOXEL even surpassed that of Bitcoin.
On April 20, the price of VOXEL surged by over 200% in just 30 minutes on Bitget, reaching $0.1645 before pulling back to $0.09131, still significantly higher than its previous price.
Bitget quickly identified the irregularities in VOXEL/USDT perpetual futures trading and noticed suspicious volumes and drastic price fluctuations. Consequently, the exchange swiftly suspended certain accounts from trading, depositing, and withdrawing activities.
While Bitget claims that the majority of users were unaffected by the incident, the exchange has not disclosed the identities of those responsible for the manipulation. Additionally, it remains uncertain whether any internal technical issues contributed to the situation.
The cryptocurrency industry has witnessed numerous instances of exploits and market manipulation, raising concerns about security and reliability across exchanges. Some traders have speculated that Bitget’s market-making technology may have malfunctioned, although an official explanation has not been provided.
Following the controversy, comparisons have been drawn online, with some users likening Bitget’s actions to casinos suing players for winning. However, Bitget maintains that the accounts targeted were engaged in manipulation rather than legitimate trading.
Bitget has announced its plans to release a comprehensive report on the VOXEL incident in the near future. In the meantime, the eight suspended accounts will remain inactive as the legal proceedings progress.
Overall, Bitget’s decision to pursue legal action against the alleged manipulators demonstrates the exchange’s commitment to maintaining a fair and transparent trading environment for its users. The outcome of this case will undoubtedly have implications for the broader cryptocurrency community and highlight the importance of vigilance and accountability in the digital asset space.