Bitget's stolen funds attempted to be transferred via Chainflip, but the broker rejected the deposit. The funds were not converted or frozen and were ultimately returned to the hacker's address.

After unauthorized withdrawals from Bitget's hot wallet, the official estimated loss was revised from approximately $351.6 million to about $387.5 million, covering assets such as ETH, XRP, USDT, USDC, BNB, AVAX, TRX, and ZEC, while the cold wallet remained unaffected. The attacker initially tested with 0.184 ETH and 193 TRX below the risk control threshold, then completed large multi-chain withdrawals within about an hour. On-chain tracking shows that part of the stolen funds was converted to BTC through channels like Thorchain, Umbra, Stargate, and Chainflip.

The rejected path differed from the previously successful Chainflip channel. Public on-chain reviews indicate that the attacker had deposited about 2,353 ETH into the Chainflip liquidity account and withdrew approximately 74.46 BTC, with another approximately 150 ETH directly converted to BTC via Chainflip; records show that some TRX was also converted to BTC through Ethereum before entering Chainflip, leaving about 9,997 USDT pending. The new attempt was intercepted by the broker, indicating that the screening had covered this deposit, but the protocol did not withhold the assets.

Chainflip's rejection mechanism operates at the broker level: the interface can reject high-risk deposits, and rejected funds are returned to the refund address provided by the user. This capability was first applied to BTC and later expanded to Ethereum and ERC20. After the stolen funds from Bybit flowed in, the network had cut off the main frontend and pushed for broker screening upgrades; the rejection of the Bitget-associated address followed the same logic. The return indicates that the address label is effective but does not constitute a judicial freeze.

Other exit points were not simultaneously closed. Thorchain continued to process exchanges, citing decentralization and permissionlessness, even after receiving Bitget's request to deny service to the attack address; some TRX was exchanged for USDT via Sunswap before bridging to Ethereum, entering the same money laundering chain. Circle and Tether's blacklisting of certain stablecoin addresses only locked up about $318,000, which is negligible compared to the total stolen funds. Approximately 48,900 ETH remains in wallets that have never been transferred out.

Bitget stated that the intrusion was due to a zero-day vulnerability in a third-party security product, with the attacker obtaining high-level internal credentials to forge withdrawal instructions, signed out by the exchange's own authorization process, with no private keys stolen. The protection fund claims to cover losses exceeding $464 million, and Bitcoin withdrawals have reopened as planned, with other assets to be restored in phases. Mandiant and SlowMist are still gathering evidence, and a complete technical report has not yet been released.

From a market mechanism perspective, this is an event-driven compliance rejection, not a market transaction. Brokers and liquidity providers choose not to accept dirty money to avoid contaminating their pools and subsequent freezing risks; the hacker bears the delay in refunds and further exposure of addresses. Benefiting are the cross-chain interfaces still running screenings, while the burden falls on permissionless exchange channels: funds will reroute through Thorchain, mixing, and one-time addresses. The stolen funds have not disappeared; they simply failed this jump.

On-chain trackers state they will continue to follow subsequent splits, chain changes, and exchanges from the returned addresses. In public reviews, BTC has mostly entered stripping addresses, with some entering CoinJoin; a large portion of XRP has left the initial receiving address and converted significantly to BTC.

Source: Public Information