The recent price surge and subsequent chaos surrounding the cryptocurrency VOXEL on the Bitget exchange has ignited a heated dispute, pitting a market maker against the platform.
In an exclusive interview with Wu Blockchain, the market maker operating under the pseudonym “qntxxx” detailed their perspective on the incident, claiming to have legitimately profited $43 million through standard trading practices. Bitget, however, has labeled the activity as “illicit,” alleging that a professional arbitrage syndicate exploited the situation to gain over $20 million.
Market Maker’s Account: Fair Trading and Order Book Interaction
qntxxx, who operates as part of a two-person high-frequency trading team, explained that they began their journey in early 2022 and found success as contract market makers on Binance following the LUNA collapse. They transitioned to exploring smaller exchanges like Bitget and Gate in late 2024, eventually becoming spot and contract market makers on Bitget.
According to qntxxx, the opportunity arose during a period of low market volatility. Their strategy involves placing orders across numerous trading pairs, and significant price movements trigger an increase in position size and the deployment of more sub-accounts. Observing high trading volume in VOXEL, they initially engaged with the token. When profits began to scale dramatically, they ramped up their operation to approximately 100 sub-accounts.
qntxxx drew a parallel to the LUNA incident, where their team utilized hundreds of accounts simultaneously amidst chaotic price action. They stated that the “chaotic candlestick movements” in VOXEL’s order book perfectly aligned with their high-frequency trading strategy, ultimately leading to the $43 million profit.
Addressing Bitget’s claim of $20 million in withdrawals by flagged accounts, qntxxx stated their team withdrew around $10 million, while Binance froze several hundred thousand from their accounts. They acknowledged the possibility of other market makers being involved but emphasized the short trading window.
qntxxx firmly denied exploiting any vulnerabilities or attacking Bitget’s servers. They argued that their profits were a result of “fair trading practices” through interaction with the order book, asserting that the $43 million rightfully belongs to their team. They believe the incident was a case of Bitget’s internal market makers losing out to their strategy.
Bitget’s Response: Illicit Profits and Fund Recovery
In a contrasting statement, Bitget identified eight accounts associated with a “professional arbitrage syndicate” as the primary instigators of the VOXEL incident, claiming they illicitly profited over $20 million. The exchange has pledged to airdrop all recovered funds back to affected platform users.
Bitget stated that for retail users who traded VOXEL between 16:00 and 16:30 on April 20th and had already withdrawn funds (amounting to approximately $19 million), their accounts were restored by Wednesday, and no further action would be taken against them.
Regarding the total amount withdrawn before risk controls were triggered, Bitget reported it to be $38.31 million in “abnormal profits.” They clarified that beyond the $20 million linked to the eight flagged accounts, they would not pursue other already-withdrawn funds.
Legal Battle Brewing
The dispute has escalated to legal action. qntxxx confirmed that they have hired legal counsel and intend to sue Bitget’s Singapore entity for “unauthorized fund seizures.” They criticized Bitget’s rollback process as “chaotic,” citing instances of mismatched balances and incorrect fee deductions from users’ accounts, even including wealth management accounts. While Bitget claims to have refunded overcharged fees and that users’ principal and fees were unaffected, qntxxx maintains that the initial rollback caused significant inconsistencies.
The “Bug” Argument
Bitget’s perspective seemingly leans towards the idea that the rapid price movements constituted an anomaly or a “bug” in the market, drawing a comparison to accidentally receiving millions from a bank, which legally requires the return of the funds.
However, qntxxx vehemently rejected this analogy. They argued that Bitget has never publicly positioned itself as a counterparty to users, implying that trades are simply matched between participants. The profits, according to qntxxx, came from other traders losing to their strategy through legitimate trading activity, not from exploiting any system flaw. They challenged Bitget to provide evidence of a bug if they are making such claims, stating that if it were truly a bug, the trades should not have been executed at all.
qntxxx concluded by labeling Bitget’s accusations of theft as “absurd,” emphasizing that they made profits and withdrew them normally, without hacking any systems. They also pointed out that Bitget’s own risk control and compliance teams did not halt the withdrawals.
The VOXEL incident highlights the complexities and potential conflicts that can arise in the dynamic world of cryptocurrency trading, particularly concerning high-frequency trading strategies and the interpretation of market anomalies. As legal proceedings commence, the industry will be closely watching the outcome, which could have significant implications for how exchanges and market participants define and address such events in the future.
Source
Kosta Gushterov
Reporter at Coindoo
Kosta has been a part of the team since 2021 and has solidified his position with a thirst for knowledge, incredible dedication to his work and a “detective-like” mindset. He not only covers a wide range of trending topics, he also creates reviews, PR articles and educational content. His work has also been referenced by other news outlets.
Source: https://coindoo.com/43-million-in-minutes-how-two-high-frequency-traders-exploited-an-exchange-loophole/