TL;DR
- Bybit CEO Ben Zhou quickly addressed online rumors claiming the exchange was insolvent or hacked. A misinterpreted proof-of-reserves graph triggered the panic, fueled by memes referencing past crypto exchange issues.
- Zhou debunked the rumors, pointing out Bybit’s recently updated proof-of-reserves (PoR) and a Nansen dashboard showcasing all Bybit wallets and their holdings. This transparency confirmed that Bybit holds over 100% of user assets, ensuring sufficient reserves to meet withdrawal requests and maintain user security.
- Despite quashing the insolvency rumors, Bybit remains under regulatory scrutiny. France’s financial watchdog, the Autorité des Marchés Financiers (AMF), recently reiterated a warning against Bybit. The AMF urged French users to consider the possibility of Bybit abruptly ceasing services.
Bybit CEO Ben Zhou has refuted rumors circulating online that the cryptocurrency exchange is insolvent or has been hacked. The speculation gained traction yesterday after a misinterpretation of a proof-of-reserves graph and was fueled by memes referencing a past FTX situation.
Rumors Traced Back to Misleading Proof-of-Reserves Graph
The initial panic stemmed from a faulty graph generated by Arkham Intelligence, a crypto intelligence firm. The graph appeared to show Bybit’s wallets being emptied, triggering concerns about a potential security breach or insolvency. However, independent verification revealed that Bybit’s funds remained secure.
hearing some rumours about Bybit being insolvent or hacked and etc. Please note that we have updated our POR this month as well as you can view all Bybit wallet through Nansen (Total more than 11B) . None of the rumours that I have see so far have any real facts supporting it,…
— Ben Zhou (@benbybit) May 23, 2024
A Twitter user pointed out the misleading graph on May 23rd, prompting Bybit to take swift action. Zhou addressed the rumors directly on social media, stating: “Hearing some rumors about Bybit being insolvent or hacked… Please note that we have updated our PoR this month… None of the rumors have any real facts supporting them.”
Bybit Provides Proof of Reserves and Reassurance
In his statement, Zhou provided a link to Bybit’s updated proof-of-reserves (PoR) and a Nansen dashboard displaying all Bybit’s wallets and their asset holdings. The PoR confirmed that Bybit holds over 100% of user assets, signifying sufficient reserves for withdrawals and user security.
The Nansen data corroborates this, indicating over $11 billion worth of crypto assets in Bybit’s wallets. While Nansen clarifies this doesn’t represent Bybit’s entire reserve picture, it demonstrates significant holdings.
Bybit Faces Regulatory Hurdles Despite Addressing Rumors
Despite addressing the insolvency rumors, the crypto exchange continues to face regulatory scrutiny. Two weeks ago, France’s financial watchdog, the Autorité des Marchés Financiers (AMF), reiterated a warning against Bybit. The AMF urged French users to consider the possibility of Bybit ceasing services abruptly.
The AMF highlighted Bybit’s lack of registration as a Digital Asset Service Provider (DASP), rendering its operations illegal in France. Bybit has been on the AMF blacklist since May 2022, and the regulator hinted at potential legal action.
This recent warning follows a similar one issued by Hong Kong’s Securities and Futures Commission (SFC) in March. The SFC labeled Bybit an unlicensed platform and advised caution to investors.
