Bitget Confirms $351.6 Million Crypto Breach and Suspends…

Bitget has confirmed that roughly $351.6 million in digital assets were affected by unauthorized transactions originating from parts of its hot and warm wallet infrastructure, a figure well above the amounts first flagged by on-chain trackers. The exchange said its systems detected the activity at 18:31 UTC on September 24, after which it activated emergency procedures. Withdrawals have been temporarily suspended during a security review, while deposits and trading remain available.

CEO Gracy Chen said the exchange's cold wallets were not compromised and that customer account balances remain accurate. Bitget stated that the estimated loss sits within its User Protection Fund, which it currently values at more than $464 million.

Blockchain tracking initially identified more than $170 million moving from Bitget-labeled addresses into newly created wallets, with later analysis pushing visible transfers past $180 million before the exchange disclosed the $351.6 million estimate for the full incident. Assets involved included ETH, USDT, USDC, AVAX and BNB. In one notable transaction on Arbitrum, a newly created address used about $19.67 million of USDT0 to acquire approximately 7,111 ETH through decentralized venues including UniswapX and 1inch Fusion.

Protection fund versus reserves

Established in 2022 as a separate backstop, the Protection Fund is distinct from Bitget's proof-of-reserves system. Bitget's August disclosure showed the fund holding 5,500 BTC, with an average monthly valuation of about $382 million, ranging between roughly $345 million and $441 million as Bitcoin prices moved. The exchange's September proof-of-reserves update reported a 135% total reserve ratio. Reserve disclosures address whether customer assets are backed at a given point in time, whereas the protection fund is meant to absorb extraordinary losses.

Freezing withdrawals after unauthorized wallet activity is a standard containment step, giving an exchange time to identify compromised infrastructure, rotate credentials or signing systems and reconcile balances. However, extended restrictions can shift a security incident into a confidence problem, as recent withdrawal delays at WOO X illustrated. Bitget has not disclosed how the attacker gained access, saying it will avoid speculation until its investigation concludes. Chen has promised a full incident report covering the root cause and corrective actions within 24 hours.

A $351.6 million security loss does not by itself signal insolvency. That depends on whether Bitget retains enough assets to cover customer liabilities after the stolen funds and whether the Protection Fund is usable as described. Investors will watch how quickly withdrawals reopen, whether the loss estimate changes after reconciliation, and whether the incident report explains how both hot and warm wallet infrastructure were reached.