Bitget CEO Cautious on Recovery Prospects After $388 Million Hack

Bitget's CEO Gracy Chen told CNBC that the cryptocurrency exchange is not expecting to recover a lot of funds from the $388 million hack that occurred last week. Approximately $1.1 million of the stolen assets have been frozen, but Chen did not disclose how much has been recovered. She noted that exchanges have a responsibility to demonstrate how they protect users, particularly when something goes wrong.

The exchange's user account balances were unaffected by the hack, and Chen said that the financial impact is being absorbed by Bitget rather than passed on to its users. The exchange's protection fund, which was valued at more than $464 million before the hack, was drawn down to below $200 million but has since been restored to over $300 million. The fund remains publicly verifiable on-chain and is separate from the reserves backing customer balances.

Investigation reports by Mandiant and SlowMist found that the attackers compromised two third-party security products before gaining access to Bitget's production wallet systems. The attackers exploited a previously unknown vulnerability in one of the products on August 31, allowing them to obtain privileged internal access and bypass the normal customer-facing withdrawal process without stealing private keys.

Chen declined to disclose further vendor or product details, citing the potential to introduce additional security risks. The reports did not attribute the attacks to North Korea, but Chen had previously said that preliminary technical indicators were highly consistent with known North Korean hacking groups.