Bitget promised users they'd be made whole after the $387.5M hack. Then it reopened withdrawals, and users pulled $463M in 24 hours anyway.
That's the largest single-day outflow DefiLlama has recorded since it started tracking exchange proof-of-reserves four years ago. It's more than 10% of Bitget's reserves gone in one day. The exchange still holds about $5.7B, so this isn't insolvency, but it's a clear vote of no confidence.
Here's the part worth sitting with: the user losses were covered. Bitget's Protection Fund absorbed the hack. Nobody's balance was touched. And people left anyway, in greater numbers than the hack itself.
That's the real cost of a security breach. Not the stolen amount, but the trust. The Protection Fund has been drawn down and Bitget says it plans to top it back above $300M within seven days. Until then, the safety net that made users whole this time is thinner than it was a week ago.
Exchanges market insurance funds as "your money is safe here." The market just showed that users read a hack as a reason to leave, even when the fund works exactly as advertised.
If a fully covered hack still triggers a record run, what is an exchange insurance fund actually buying?
#Bitget #ProofOfReserves
That's the largest single-day outflow DefiLlama has recorded since it started tracking exchange proof-of-reserves four years ago. It's more than 10% of Bitget's reserves gone in one day. The exchange still holds about $5.7B, so this isn't insolvency, but it's a clear vote of no confidence.
Here's the part worth sitting with: the user losses were covered. Bitget's Protection Fund absorbed the hack. Nobody's balance was touched. And people left anyway, in greater numbers than the hack itself.
That's the real cost of a security breach. Not the stolen amount, but the trust. The Protection Fund has been drawn down and Bitget says it plans to top it back above $300M within seven days. Until then, the safety net that made users whole this time is thinner than it was a week ago.
Exchanges market insurance funds as "your money is safe here." The market just showed that users read a hack as a reason to leave, even when the fund works exactly as advertised.
If a fully covered hack still triggers a record run, what is an exchange insurance fund actually buying?
#Bitget #ProofOfReserves
