Bybit CEO Debunks Insolvency Claims, Reveals Proof-of-Reserves

Ben Zhou, the CEO of Bybit, a well-known cryptocurrency exchange, recently took to social media to address and debunk a series of rumors suggesting the platform had been hacked and was facing insolvency. These rumors gained traction on May 22, spreading rapidly on X, a popular social media platform. The situation was further inflamed by numerous memes parodying a popular post related to the FTX exchange, but this time mentioning Bybit instead.

As soon as the rumors started circulating, the online community began discussing and speculating about the veracity of these claims. Some users made light-hearted comments about withdrawing their funds, while others attempted to delve deeper into the situation to understand what was happening. One cryptocurrency enthusiast suggested that a misunderstanding related to a proof-of-reserves graph from Arkham Intelligence might be to blame. The graph in question appeared to show Bybit’s wallets being depleted, which understandably raised concerns about a potential hack or insolvency.

Upon closer inspection and independent verification, it was clear that Bybit’s wallets still contained all the funds. On May 23, Ben Zhou took decisive action to quell the spread of misinformation. He posted on X, unequivocally stating that the rumors were baseless. He assured the platform’s users by emphasizing, “None of the rumours that I have seen so far have any real facts supporting it, please be aware.”

To reinforce his statement, Zhou provided a link to Bybit’s proof-of-reserves (PoR) and a Nansen dashboard. The PoR illustrated that Bybit holds more than 100% of its user assets, ensuring that all user funds are safe and available for withdrawal. The Nansen dashboard further solidified this claim, showing that Bybit’s wallets contained over $11 billion in cryptocurrency assets.

Although the data from Nansen was not intended to represent a full and comprehensive statement of Bybit’s holdings or reserves, it nevertheless provided a significant level of transparency for users concerned about their funds.

Beyond these rumors, Bybit has also recently encountered challenges on the regulatory front. Earlier in May, specifically on the 16th, the French securities regulator, Autorité des Marchés Financiers (AMF), reiterated its stance towards Bybit. The regulator warned investors that Bybit was not registered as a digital asset provider in France and noted that it had the authority to block the trading platform on the grounds of offering its services illegally.

These regulatory issues add another layer of complexity to Bybit’s operations, especially as the platform seeks to expand and maintain its user base. The AMF’s warning serves as a reminder of the ongoing challenges faced by cryptocurrency exchanges in navigating the ever-evolving regulatory landscape.

Bybit’s response to these rumors and regulatory challenges displays the importance of transparency and clear communication in maintaining user trust. By promptly debunking false claims and providing detailed proof of reserves, Bybit aims to reassure its users of the platform’s stability and reliability amid a volatile market.