Bitget Faces Community Uproar Over VOXEL Contract Incident: Retail Traders Cry Foul

Bitget, one of the major players in the centralized exchange (CEX) world, finds itself under scrutiny following a significant trading incident involving its VOXEL/USDT perpetual contract.

This event, which took place on April 20, has sparked considerable anger among retail users, who are now accusing the exchange of unprofessionally managing the incident and scapegoating traders. The underlying concerns also raise questions about Bitget’s internal market operations and whether or not they are functioning appropriately.

The abnormal trading activity observed by traders on the VOXEL/USDT pair sparked the incident. On-chain investigator and community analyst @suwanyu7777 has suggested that the VOXEL contract was suffering from a pricing problem that likely stemmed from a bug in Bitget’s market-making bot. Because of this bug, the prices of VOXEL were undergoing very unusual oscillations, which were doing so between very tightly confined ranges (like between $0.125 and $0.138 or $0.135 and $0.148) in what can only be described as the perfect environment for high-frequency trading and scalping to go wild.

The sudden increase in trading volume turned heads throughout the community. In a brief span, the trading volume of VOXEL/USDT shot up to a breathtaking $12.7 billion over 24 hours—far exceeding even the trading volume of Bitcoin and other major trading pairs. Savvy traders recognized an opportunity and executed rapid trades, often turning modest amounts of money—just a few hundred USDT in some cases—into tens of thousands or more.

Some users were able to pull back their profits before action was taken, but others were not so lucky. With the risk control system in place, accounts began to get frozen, locking up both trading capabilities and withdrawal functions for many participants involved in the trading frenzy. Of course, the timing of when accounts were frozen wasn’t exactly a bonus for those who had just traded in and out of their crypto. If you don’t believe me, just ask the poor folks who were forced to transfer a digital asset to someone else in order to make an OTA trade while account frozen.

In answering the increased attention, Bitget put out an official statement confirming that the anomaly happened between 4:00 and 4:30 p.m. (UTC+8) on April 20. The exchange said that they had detected some suspicious trading patterns and linked them to possible market manipulation by users. As a precautionary measure, they activated the risk controls of the platform and temporarily restricted access to the accounts that were affected. Bitget asserted that all the platform’s funds were safe and that any accounts not involved in the incident were still fine.

However, instead of diffusing the situation, the statement tended to create more of a backlash. The critics contend that the root of the problem lay in a flawed internal Bitget market-making system that, suspiciously, does not allow any third-party market makers. For many critics, this represents a gaping architectural weakness in the exchange.

A user expressed disbelief and frustration: “Are you blaming retail traders for manipulating the market? This is clearly a problem with the market makers! I just wanted to get my capital back, but after seeing this announcement, I feel devastated. I am going to fight for my profits. I earned them fairly through trading!”

One commenter added, “After almost two years of trading with Bitget, I can say their market-making team is the weakest of any major exchange. Bitget only allows internal market makers for contracts, which enables them to manipulate the market.”

A user, of which there are many discussing this subject on social media, went further to make a very drastic assertion. They warned: “Bitget may be the next FTX!!” That is a serious claim to make. If Bitget is on the verge of collapse, it is very likely that will have already started to become evident to users before this video even drops.

The most serious criticism stems from the wider context of Bitget’s previous behavior. Only a few months ago, the platform took to the public forum to criticize rival exchange HyperLiquid for its poor handling of the “JellyJelly” incident, which had the potential to be a systemic problem. Bitget seemed to be saying that HyperLiquid was on the verge of becoming the next FTX. Ironically, or perhaps hypocritically, Bitget has now faced a very JellyJelly-like incident, has reacted in a very JellyJelly-like way, and is on the verge of becoming an FTX-like cautionary tale.

At the center of the disagreement is a matter of equitability and clarity. Users of the system contend that if Bitget’s internal plumbing was at fault, then it’s not fair to penalize traders for trading in open-market opportunities—especially when they didn’t really break any rules that were clear. And it’s not just a matter of these traders feeling put upon. The users argue that the locking of funds and accounts raises serious legal and ethical questions.

Critics also say that internal market making leads to a serious conflict of interest and, together with management’s profits in a rising market, exposes the platform to serious systemic risks. Bitget’s decision not to open its contracts to third-parties who would provide liquidity to the market may be a decision made for resilience, but when one starts to look at it as a decision for resilience, it’s hard not to backtrack in saying that it could even be a decision for backfire.

The situation is developing, and Bitget is under pressure to produce a more detailed explanation; to reinstate access to frozen funds, and to rethink its approach to internal market-making. Until these three things happen, the reputation of Bitget is in danger, and within the crypto community, it is increasingly being compared to failed past centralized exchanges.

Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.

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