Ben Zhou, CEO of the cryptocurrency exchange Bybit, has addressed rumors that the platform has been hacked and is insolvent. The speculation began to spread yesterday on X. It grew worse as memes citing an infamous FTX-related post were repurposed and targeted at Bybit.
Also Read: Bybit Integrates Google Pay
The rumor has gotten various reactions. Some users joked about withdrawing their funds from Bybit, while others dug deeper to understand the situation. Zhou saw the tweets and decided to squash them once and for all.
Bybit is Not Insolvent
A major catalyst was a bug in a proof-of-reserves graph from Arkham Intelligence. This graph showed Bybit’s wallets being drained, causing panic about a potential hack or insolvency. However, when examined independently, Bybit’s wallets still displayed the funds.
A Twitter user revealed that the graph was misleading. On May 23, a day after the rumors took off, Bybit moved to set the record straight. Ben Zhou took to X to debunk the insolvency and hacking claims. He stated:
Hearing some rumours about Bybit being insolvent or hacked, 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, Please be aware.
Also Read: Bybit Web3 Announces Upcoming IDO for Thetanuts (NUTS)
Bybit Shows Proof of Solvency
Zhou also shared a link to Bybit’s proof-of-reserves (PoR) and a Nansen dashboard. This dashboard details all Bybit wallets and the number of assets they hold. The PoR confirmed that Bybit holds more than 100% of user assets. This means the exchange has all the assets needed for user withdrawals, ensuring security and reliability.
The Nansen data above clearly indicates that Bybit’s wallets have over $11 billion in crypto assets. According to Nansen, this figure represents the total value of the token holdings in the addresses provided by Bybit. However, Nansen disclaims that this should not be considered a comprehensive statement of Bybit’s assets or reserves.
Bybit Faces Regulatory Scrutiny
Two weeks ago, France’s securities regulator issued a renewed warning against Bybit. The Autorité des Marchés Financiers (AMF) urged customers to “make arrangements for the eventuality that the platform [may] suddenly cease to provide services” to customers in France.
The AMF highlighted that Bybit is not registered as a digital asset service provider (DASP) and is, therefore, operating illegally in France. Bybit has been on the AMF blacklist since May 20, 2022. The AMF’s notice hinted at possible enforcement actions against Bybit.
It reminded investors that the AMF “reserves the right, under the terms of the Monetary and Financial Code, to take legal action to block the website of this platform.” Additionally, it advised retail investors to “take all necessary measures to avoid being unable to access their assets.”
This warning from the AMF comes after a similar one from Hong Kong’s financial regulator. In March, the Securities and Futures Commission (SFC) added Bybit to its list of suspicious crypto exchanges. The SFC warned the public that Bybit is unlicensed and advised caution.
Cryptopolitan reporting by Jai Hamid
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