Swiss Bank Offers Shield to Bitget Institutions Amidst Security Breach

A recent security breach at Bitget has left over $387 million in assets frozen, while some of its institutional clients were shielded from the damage by a Swiss bank.

On September 24th, Bitget detected unauthorized transfers totaling around $351.6 million to attacker-controlled addresses. The exchange initially estimated that cold wallets remained secure, but later revised this number to $387.5 million after including Zcash and TRON transfers in its accounting.

Sygnum, a Swiss bank, announced on the same day that Bitget's institutional clients could trade against collateral held at the bank instead of placing it in Bitget's wallets. This move highlights the limitations of off-exchange custody and raises questions about which assets truly sit beyond an exchange wallet breach.

The arrangement between Sygnum and Bitget allows institutional clients to use its Protect service for spot and derivatives trading while pledged collateral remains in Sygnum custody. However, the public materials do not establish that a Protect client can instantly reclaim pledged collateral during an exchange disruption.