Bitget Hack Highlights Limitations of Asset Freezes

Circle and Tether have frozen $318,000 in stablecoins related to the Bitget exchange hack, but most of the stolen funds had already been transferred by the time they intervened. The breach occurred on September 24 at 18:31 UTC when Bitget's system detected unauthorized transfers from a limited number of hot wallets, initially assessing the total damage to be $351.6 million before updating it to $387.5 million after reviewing extra Zcash and TRON transfers.

The stolen funds included XRP, ETH, USDT, ZEC, USDC, USDT0, XAUt, BNB, AVAX, and TRX across various networks. Bitget has stated that cold wallets were not harmed, users did not experience any discrepancies in their account holdings, and the losses would be compensated through its User Protection Fund, worth over $464 million.

However, the effectiveness of asset freezes is limited by speed, as issuers can only freeze funds when they are still available in tokens that can be frozen. In this case, the attacker had already converted some of the stolen assets into ETH before the freeze was implemented, making it impossible to recover the majority of the funds.