Bitget Wallet Chief Urges Clearer Controls for Self-Custody Users

Bitget Wallet Chief Operating Officer Alvin Kan is urging clearer transaction approvals and recovery tools for self-custody wallets, as a security incident at the Bitget exchange highlights the different responsibilities involved in holding crypto assets.

Bitget estimates that unauthorized transfers from certain hot and warm exchange wallets affected about $388 million. The company says recovery efforts are ongoing. It detected the transfers on Sept. 24 and says attackers used credentials obtained through a vulnerability in a third-party security product to submit fraudulent withdrawal instructions.

Bitget says the incident did not affect Bitget Wallet’s systems or users’ self-custodied assets. The wallet and exchange use separate infrastructure and custody arrangements.

Kan’s proposals center on helping users understand what they authorize. A wallet should show how much a transaction will transfer and make clear whether an approval covers one payment or gives an application continuing access, he said. He also called for tools to revoke permissions and guidance on restoring access after a device or backup is lost.

In self-custody, users control their private keys and authorize transactions directly. That removes an exchange or other intermediary from holding assets, while leaving users responsible for protecting their keys and understanding transaction approvals.

The European Securities and Markets Authority (ESMA) is reviewing crypto-asset service providers’ custody and operational controls, including key management, transaction controls, incident response and third-party dependencies. The review is scheduled to run through the first half of 2027, with a final report expected in the second half of that year.

A separate Securities and Exchange Commission proposal issued Oct. 1 concerns registered investment advisers holding client crypto assets and regulated funds. It does not set rules for individuals managing their own wallets. SEC Commissioner Hester Peirce said the proposal addresses a different arrangement from individuals holding assets without an intermediary, and that self-custody is not right for everyone. The proposal’s public comment deadline is Dec. 7.