Circle and Tether froze a wallet linked to a hacker involved in the $351.6 million Bitget crypto exchange breach, seizing approximately $318,000 in stablecoins—USDT and USDC—on Friday morning. The blacklist action followed the theft, which exploited a backend system compromise that allowed attackers to spoof transactions and trigger unauthorized fund transfers. Bitget’s user protection fund, holding over $464 million, is covering the loss, according to CEO Gracy Chen, who ruled out a private key breach as the cause.
The freeze targeted a wallet labeled ‘Bitget Exploiter 8’ on Etherscan, containing about 170.47 ETH, 218,023 USDT, and 99,990 USDC. However, the bulk of the stolen assets—over 63,000 ETH—remain untraceable, as stablecoin issuers cannot legally freeze Ethereum-based funds. Blockchain security firm MistTrack confirmed Tether’s additional blacklisting of the wallet.
Circle’s response contrasts sharply with its handling of the April Drift hack, where it reportedly failed to act quickly enough to prevent the movement of $232 million in USDC across chains. Critics, including analyst ZachXBT, had previously criticized Circle for not blacklisting wallets sooner. Circle stated it freezes assets only when legally required.
The incident underscores the persistent challenge of recovering stolen funds in decentralized finance, particularly when attackers move assets across multiple blockchains.
