Bitget Hit by $351.6 Million Hack — Will It Fully Compensate with the User Protection Fund?

Global cryptocurrency exchange Bitget has suspended withdrawals following a massive hack. It must have been quite a shock to find your assets frozen overnight, but fortunately, the exchange has promised to fully compensate for the losses using its own protection fund. Let's quickly and easily find out with Kito what really happened in this hack and whether our assets are truly safe moving forward.

The Largest Hack of 2026 — What Happened?

According to reports from Dow Jones News and Coinpedia, a massive $351.6 million (approximately 480 billion KRW) was illicitly drained from the hot wallet of global cryptocurrency exchange Bitget. The breach resulted in the loss of various assets, including Ethereum, Avalanche, and BNB. Bitget immediately suspended withdrawal services to prevent further damage.

What is the difference between the 'hot wallet' that was affected and the 'cold wallet' that is considered safe? To put it simply, a hot wallet is like the 'wallet' in your pocket that you carry around and use for quick access. Since it is always connected to the internet, it is very convenient for real-time trading, but it is also exposed to hacker attacks. On the other hand, a cold wallet is like a 'personal safe' hidden deep inside your house. Because it is completely disconnected from the internet, there is no way for hackers to infiltrate it online.

Fortunately, Bitget quickly announced that most assets are safely stored in cold wallets, which act as vaults. However, the sudden news of suspended withdrawals left many users understandably anxious.

Behind the Hack: North Korean Group? Clues Uncovered

Who is behind this large-scale attack? According to a Cointelegraph report, Gracy Chen, CEO of Bitget, suspects the North Korea-linked hacking group Lazarus as a primary suspect. The investigation has uncovered clues that bear a striking resemblance to the group's past hacking techniques.

Standard hacks usually involve spoofing user withdrawal requests. However, in this case, hackers used a bold method of penetrating the internal exchange system and moving funds in bulk. Furthermore, evidence including specific IP addresses and VPN connection logs captured during the attack aligns with the patterns of previous Lazarus operations.

Lazarus has earned notoriety as one of the most threatening hacking collectives in the crypto industry. If this incident is confirmed to be their doing, it is expected to raise further alarm regarding the security systems of global exchanges.

Will the ‘User Protection Fund’ Really Protect Our Assets?

Bitget quickly announced that it would compensate for all assets lost in the hack using its own 'User Protection Fund.' The User Protection Fund acts as a sort of emergency reserve or insurance layer that exchanges maintain to prepare for unforeseen events; it is a standard safety measure introduced by major exchanges to maintain user trust. According to major outlets like BeInCrypto and Coinpedia, the exchange has repeatedly emphasized that it will use this fund to fully reimburse users for their losses.

However, even with robust insurance, it is hard to be 100% relieved until the money is actually back in your wallet. We need to keep a close watch on whether the massive $351.6 million will be reimbursed without any hitches, and whether the suspended withdrawal services will be normalized through a transparent process. Ultimately, an exchange's true reliability is proven by its ability to handle crises.

Signals We Should Watch For

The first signals to watch for are the actual timing of Bitget's withdrawal resumption and the results of additional security audits. Fortunately, thanks to the influx of institutional funds via Bitcoin spot ETFs, the crypto market has been relatively resilient despite major negative news for individual exchanges. However, to keep your precious assets safe at all times, this would be a great opportunity to brush up on your own security protocols, such as increasing your use of personal wallets!

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