Ben Zhou, the Chief Executive Officer of the well-known cryptocurrency exchange, Bybit, recently addressed increasing rumors about the platform’s insolvency and the alleged hacking incidents in a post. The speculation about the exchange’s insolvency skyrocketed when a flurry of memes mimicking an FTX-related post started appearing on multiple online platforms, hinting at Bybit’s financial instability.
These rumors provoked a mixed reaction as some users considered the situation humorously, contemplating withdrawing their funds. However, the others showed more serious concern, trying to understand what was happening. A particular user theorized that a glitch in Arkham Intelligence’s proof-of-reserves graph might have sparked the rumor, as it seemed that Bybit’s wallets were losing funds rapidly, creating doubts about a potential hack or insolvency. But isolated scrutiny of Bybit’s wallets indicated that the funds were intact.
A day after the rumor’s circulation, Bybit confirmed that all claims were baseless. On May 23, Zhou made an official statement denying all the rumors, stating they had no factual basis and urged everyone to remain cautious. To support his point, Zhou shared a link showcasing Bybit’s proof of reserves (PoR) and a Nansen dashboard, which delineates all Bybit wallets and their respective held assets.
The PoR revealed that Bybit holds assets exceeding their users’ deposits by 100%. This ensures liquidity and places the exchange in a position to fulfill all withdrawal requests from its users. On the other hand, the Nansen dashboard displayed that Bybit’s wallets possessed over $11 billion worth of crypto assets. This figure represents the collective value of the token holdings from the addresses Bybit provided. Nevertheless, the analytic platform clarified these figures aren’t supposed to represent a comprehensive affidavit of Bybit’s actual assets or reserves.
Apart from financial solvency rumors, Bybit faced regulatory hurdles earlier in May as well. On May 16, Autorité des Marchés Financiers, France’s security regulator, gave a warning to investors that the crypto exchange isn’t registered as a digital asset provider in France. The regulator added that they held the authority to block the trading platform operating illegally in the country.