Circle and Tether Freeze $318K in Stablecoins Tied to Bitget's Ethereum (ETH) Hack

Stablecoin Issuers Blacklist Exploiter Wallet

Circle and Tether have moved against one of the wallets tied to the Bitget exchange breach, blacklisting roughly $318,000 in stablecoins — even though the bulk of the stolen fortune had already been converted into Ethereum (ETH), an asset no issuer can freeze. The action targets an address labeled “Bitget Exploiter 8” on Etherscan, which held about 99,990 USDC and 218,023 USDT when the issuers acted. On-chain records show the USDC blacklist transaction landing at 05:00 UTC on Friday, when Circle invoked the freeze function written directly into its smart contract. Roughly seven hours later, a signer on Tether's multisig wallet confirmed the matching USDT blacklist, adding the same address to the token's denylist. The same wallet also held around 170 ETH, a portion that remains untouched, because issuers can blacklist their own tokens at the contract level but hold no authority over the base asset itself. That gap explains why so little was recovered: the attacker appears to have raced to swap freezable holdings into ETH within minutes of the breach, consolidating stolen tokens into fresh wallets, and on-chain trackers indicate other exploiter-linked addresses still hold more than 63,000 ETH beyond anyone's reach. The freezes amount to a small dent in one of the year's largest exchange breaches, with early estimates putting total losses at roughly $387 million and North Korea's Lazarus Group flagged as a possible culprit. Bitget's own post-mortem, delivered by CEO Gracy Chen, states that attackers compromised a backend system in the exchange's wallet infrastructure and spoofed transaction data to trigger unauthorized transfers, while ruling out a private-key compromise. The exchange has confirmed that a user protection fund holding more than $464 million will absorb user losses. The sub-day response drew notice as a faster issuer reaction than in several past incidents, though it revived a long-running debate over the centralized power stablecoin issuers retain.

Exchange Float Sinks to 3.49%

Ethereum's readily sellable float on trading platforms has sunk to just 3.49% of total supply, a reading that leaves unusually little ETH available for immediate spot sale. Data from Santiment shows the on-exchange share has fallen roughly 1.16% since the start of June, meaning fewer and fewer coins sit on the venues its trackers monitor. The shift is structural rather than a single event: coins that once waited on order books have migrated into yield-bearing and collateral roles across the Ethereum network. Roughly 35% of all ETH now sits in staking under the network's proof-of-stake design, locking coins into validator duties that make them untradeable at short notice, while value locked in DeFi applications stands near $53 billion. Long-term holders and corporate treasuries compound the drain. The most prominent example is BitMine, which disclosed earlier this month that it has staked more than 5 million ETH from its corporate ETH treasury — a strategy we examined in our report on the exchange supply record low. Restaking protocols extend the lock-up further by reusing staked ETH as collateral for additional yield. None of this guarantees a higher price: shrinking exchange balances are a supply condition, not a demand signal. But it does mean buyers would face a thinner book if spot demand picks up. Network activity confirms the demand side has not cooled. ETH has slipped from around $2,800 to roughly $2,660 over the period, yet block space remains contested, with gas fee pressure rising. CryptoQuant metrics put gas usage near 217.1 billion units, up 0.26%, while priority fees — the tips users bid to jump the transaction queue — climbed 26.74% in 24 hours to about $464,000. Users are paying more for the same block space, a sign the appetite for using the network itself is intact despite the price pullback.

Unfreezeable ETH Anchors Both Threads

Both stories converge on the same design choice. The Bitget attackers raced into ETH precisely because contract-level freezes stop at the token boundary — the blacklist transactions are publicly verifiable on Etherscan, and so is the more than 63,000 ETH that sits outside issuer control. The same permissionless base layer is what lets capital rotate from exchange balances into staking and DeFi, driving the exchange float down to 3.49%. In COINOTAG's reading, the two dynamics reinforce each other: every breach that ends with stolen funds parked in ETH, and every treasury that locks coins into validator duty, tightens the liquid float. The market's open question is whether that thinner float meets rising demand.