How the Bitget Hack Reopened Crypto's Fight Over Neutral Infrastructure

Austin Campbell (0:00)

So now we're in this race between less people, more AI, to see where productivity goes. And if you're on the AI skeptic side of things, you're looking at this and saying, ah, debt to GDP is going to explode from here. So if we're trying to read the tea leaves for rates, because rates markets are filled with grouchy people who doubt the future, that is the nature of being a rates trader, I think this is the classic sort of conflict between rates and equities, and one of them is wrong. Hey everyone, welcome to Bits and Bips, where we explore how crypto and macro collide one basis point at a time. We're here to discuss the latest stories in the worlds of crypto and macro, but remember, one, we have our own channels now.

And before we begin, a quick commercial break.

Laura (0:44)

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Before we get started, I want to ask you for something. We're making a bunch of decisions right now about Unchained. What we make next, when we go live, what we should be doing more of. And I'd rather hear from you before we make them than after. So we put together a survey. It takes just a few minutes. It's anonymous. And there's a box where you can tell me what we could be doing better. I read all the responses. The link is in the show notes, or you can snap the QR code on screen or go to unchainedcrypto.com/survey. Thanks.

Austin Campbell (1:33)

All right. As always, I'm your host, Austin Campbell, High Scholar of Zero Knowledge Group. I'm here with my two usual co-hosts, aka co-conspirators, Ram Ahluwalia, Maester of Wealth, Leader of Lumida, and Chris Perkins, the Golden Hand of Franklin Crypto. So let's start with one of the big news items over the weekend. So Bitget got hacked on September 24th. Attackers took roughly 388 million from Bitget, largely the contents of the Hot Wallets, not by stealing their private keys, but by spoofing transaction data. So Bitget's own approval process signed off on the withdrawals. The hack reopened some of the neutrality debate around crypto after THORChain refused to block the hackers' addresses while Stolen ETH kept swapping into Bitcoin through the protocols. So one, the loss is about 388 million. No private keys were accessed according to Gracie Chen, CEO of Bitget. And the attacker, quote, used it to spoof transaction data and triggered our own authorization process to move funds out. She says it's, quote, consistent with techniques used by DPRK-linked hacker groups. And it is currently the largest reported crypto theft of 2026 Bitget's $464 million user protection fund covers the losses. BTC withdrawals reopened today. ETH is on the 29th. Tether is on the 30th. And everything else is on 10-2. THORChain.

Gracie said, quote, decentralization is a desired principle, not a shield for facilitating known stolen funds. The industry is watching. THORChain responded, THORChain is permissionless. It doesn't censor by design. To which Star of OKX said, quote, THORChain paused its own network after its May. Bitcoin cannot be stopped, but THORChain can. It simply chooses when to do so.

And Michael Perklin said, there's no active choice to sign. There is an active choice to tone off the machine.

Reminder, for those who are not paying attention, 1.2 billion of Bybit's 1.46 billion path also ran through THORChain.

A middle path was taken by Near with Intense, where of the 50 million hackers tried to route, about 166K got through, but 503K was frozen. And it says, Near Intense are permissionless infrastructure, but not with no boundaries, according to Alex Shevchenko. So, I have a couple of thoughts here. We'll come back to the THORChain part, because I want to start with the bigger point, Chris, is this is something you've been talking about for a while. When we see these attacks happen, right now, the framework is either the attacker succeeds and gets away with the funds, or they don't, but that just means they failed with regard to effort, and that's kind of the end of the story. That's a pretty favorable landscape for attacks to continue indefinitely, because they either win or have very low cost. What do you think needs to change? Because this remains a theme that's really sapping the space.

Chris Perkins (4:55)

It's kind of mind-blowing where you have a new technology and people think that the rule of law, like laws just go out the window. It's like, it doesn't matter because we have this new technology. It's crazy.