Stablecoin Issuers Freeze $318K After Bitget Suffers $387.5M Hack

TLDR

• Stablecoin issuers Circle and Tether successfully froze approximately $318,000 in USDC and USDT connected to the Bitget security breach.
• The exchange has increased its loss calculation to $387.5 million from an initial $351.6 million estimate.
• A bounty initiative offers 5% rewards for freezing stolen assets and an additional 5% for successful recovery.
• Bitget reports identifying the attack vector and implementing a fix for the exploited vulnerability.
• A phased withdrawal restart is scheduled to begin September 28, starting with Bitcoin transactions.

Cryptocurrency exchange Bitget is navigating the consequences of a significant security breach that targeted its infrastructure earlier this week. Initially, the platform calculated its losses at $351.6 million, but has subsequently updated that figure to $387.5 million.

The security incident occurred on September 24. The exchange’s monitoring systems identified unauthorized fund movements from several hot wallets at 18:31 UTC on that date. While hot and warm wallet infrastructure was compromised, the platform’s cold storage remained untouched.

According to Bitget CEO Gracy Chen, the perpetrators gained access through a backend system connected to the exchange’s wallet architecture. The attackers manipulated transaction information to activate the wallet’s approval mechanisms. Chen clarified that the incident did not involve compromised private keys.

Stablecoin Companies Respond with Address Blacklisting

Both Circle and Tether implemented countermeasures following the security breach. Circle blacklisted a wallet containing stolen assets at 05:00 UTC on Friday. The targeted wallet contained approximately 170 ETH, 218,023 USDT and 99,990 USDC.

Tether followed with its own blacklist action on the same address, as confirmed by blockchain security company MistTrack. Combined, these two stablecoin providers successfully froze around $318,000 in digital assets.

This represents only a fraction of the overall damage. MistTrack’s analysis reveals that additional addresses associated with the perpetrator still contain over 63,000 ETH. Unlike stablecoins, Ether lacks centralized control mechanisms that would enable freezing.

Security analyst Taylor Monahan monitored portions of the stolen USDC as it transferred between various wallets. Her findings indicate that some funds were exchanged for ETH during these movements.

The exchange revised its total damage assessment after incorporating assets from two blockchain networks initially overlooked. The updated $387.5 million calculation now accounts for compromised assets on the Zcash and TRON networks.

According to Bitget, this revision represents a more comprehensive inventory of the initial breach. The company emphasizes this is not related to any additional unauthorized activity.

The catalog of compromised digital assets is extensive. Affected tokens include XRP, ETH, USDT, ZEC, USDC, USDT0, XAUt, BNB, AVAX and TRX.

Investigation teams have pinpointed four primary addresses receiving stolen funds. These addresses are distributed across EVM-compatible blockchains, XRP Ledger, Zcash and TRON networks.

Exchange Introduces Incentive Program for Asset Tracking

Chen unveiled a bounty initiative on X this week. The program solicits assistance from exchanges, security professionals and blockchain analysts in locating the stolen assets.

The compensation structure includes two distinct rewards. Contributors can receive 5% of any assets they assist in freezing, plus an additional 5% for assets they help retrieve.

According to Bitget, measures implemented before the bounty announcement remain eligible for consideration. The platform reserves the right to determine participant eligibility and reward allocation.

Court-ordered freezes or law enforcement actions are excluded from bounty eligibility.

The exchange has deployed a public tracking dashboard providing real-time monitoring of stolen funds. Additionally, a submission portal allows individuals to provide intelligence regarding the attacker’s wallet addresses.

Bitget confirmed that cybersecurity firms Mandiant and SlowMist are participating in the investigation. The exchange reports successfully identifying the attack methodology and remedying the exploited security weakness.

According to the company, no additional unauthorized transactions are currently possible.

The platform has outlined a staged approach to reinstating withdrawal functionality. Bitcoin withdrawals will resume September 28. Ethereum-based withdrawals are scheduled for September 29, followed by USDT on September 30, with remaining tokens and fiat currency by October 2.

Bitget maintains that user account balances have not been impacted. The company references its Protection Fund, previously valued above $464 million, as the financial safeguard covering losses. No updated fund valuation reflecting the revised $387.5 million loss figure has been released.

Chen has scheduled a live Q&A session for September 28 at 07:30 UTC to address the incident and outline the exchange’s recovery strategy.