Bybit Assures Users: CEO Debunks Rumors, Shares Reserves

Ben Zhou, CEO of the cryptocurrency exchange Bybit, recently addressed widespread rumors about the platform’s security and solvency.

On May 22, speculation regarding Bybit’s financial stability spread rapidly on social media platform X, fueled by memes reminiscent of the FTX incident. The memes led some users to joke about withdrawing their funds, while others sought a clearer understanding of the situation.

The Origin of the Rumors

The rumors originated from what appeared to be an error in a proof-of-reserves graph provided by Arkham Intelligence. This graph misleadingly suggested that Bybit’s wallets were being drained, raising concerns about a potential hack or insolvency. However, a closer inspection revealed that the funds remained intact.

On May 23, Bybit issued a statement to dispel these rumors. Zhou reassured users and the broader crypto community of Bybit’s robust financial standing. He emphasized that the exchange’s updated proof-of-reserves (PoR), which can be viewed through a Nansen dashboard, showed that Bybit holds more than $11 billion in assets, significantly exceeding customer deposits. This confirmation aimed to quell any fears and ensure users that their funds were secure and that the exchange was not facing insolvency.

Amidst heightened scrutiny of cryptocurrency exchanges following several high-profile security breaches and financial instabilities, Zhou’s reassurance was crucial. Bybit’s PoR demonstrated that the platform possesses more than 100% of user deposits, guaranteeing that it could fulfill all withdrawal requests. However, it was also noted that the analytics platform’s disclosure might not represent a comprehensive account of Bybit’s actual assets or reserves.

Despite its international presence and a user base of 20 million, Bybit has encountered regulatory challenges in Europe. The Autorité des Marchés Financiers (AMF), France’s financial regulatory authority, issued a warning to investors about Bybit operating without proper authorization.

Bybit was blacklisted in May 2022 for lacking a Digital Asset Service Provider (DASP) license in France, prompting the AMF to urge investors to safeguard their assets on the platform. This warning was similar to previous alerts against another crypto exchange, Bitget, underscoring ongoing regulatory challenges in the sector. 

Bybit’s Expansion in the Netherlands

In contrast to its regulatory issues in France, Bybit has expanded its footprint in the Netherlands. On March 28, Bybit launched Bybit.nl, a new regulated trading platform specifically for Dutch users.

This platform, developed in partnership with SATOS, a prominent Bitcoin-focused Dutch company, offers secure and efficient trading options. Dutch users can now trade over 300 cryptocurrency pairs, access educational resources, and utilize advanced trading tools through Bybit.nl.

The launch of Bybit.nl is significant for Bybit’s strategy to enhance regulatory compliance and user experience. SATOS, supervised by the Dutch National Bank, ensures high security and reliability for its users. Bybit.nl also introduces innovative features such as the Web3 Wallet and Airdrop Arcade, enriching the trading experience within the Web3 ecosystem.

Bybit is committed to providing tailored support to the Dutch crypto community, fostering collaboration and innovation through localized assistance and community initiatives. Ben Zhou expressed his enthusiasm about the launch, emphasizing the platform’s dedication to regulatory adherence and enhanced user service in the Netherlands.

This move is part of Bybit’s broader strategy to consolidate its presence in regulated markets amidst the complex landscape of global cryptocurrency regulations. Overall, Bybit’s recent developments reflect its efforts to address regulatory challenges while expanding its services to new regions.

The assurance of its financial stability through updated proof-of-reserves, coupled with the strategic launch of Bybit.nl, positions the exchange to better serve its global user base while navigating the evolving regulatory environment.