Bitget lost $388 million to hackers last week. The CEO just told CNBC he doesn't expect to get most of it back. This counts as news in an industry where admitting basic reality qualifies as transparency.
The exchange froze "a tiny fraction" of the stolen funds. They won't say how tiny. Could be $5 million. Could be twelve dollars and a Subway gift card. The phrasing suggests it's closer to the gift card.
They did restore their protection fund though. You know, the fund that's supposed to protect users when exactly this thing happens. They restored it after the thing happened. That's like buying fire insurance while your house burns and expecting everyone to applaud your financial planning.
The hackers made off with $387.5 million in crypto, which they will never return, because that's what hackers do. They hack things and keep them. The CEO needed a CNBC interview to communicate this revelation. Presumably his next exclusive will confirm that gravity pulls downward and Mondays come after Sundays.
Bitget users can take comfort knowing their exchange has a CEO willing to state obvious facts on cable television. He's not expecting to recover the money. He's being realistic. He's managing expectations. These are all phrases that mean "your sh*t is gone."
The protection fund exists again, which means when the next $388 million disappears, they'll have something to restore after that too. It's a sustainable business model as long as you redefine sustainable to mean the exact opposite.
Somewhere right now a retail trader is reading about Bitget's restored protection fund and thinking this means his money is safe. That trader will learn an expensive lesson about the difference between a fund that exists and a fund that does anything.
Photo by Markus Spiske on Unsplash
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