Ben Zhou Clarifies Rumours of Hack and Bybit Insolvency

Ben Zhou, the CEO of Bybit, took to X to address and dispel escalating rumors about the crypto exchange being hacked and insolvent. These rumors, which began circulating on May 22, rapidly gained traction.

This was partly due to many memes that echoed a popular post previously associated with FTX but now featuring Bybit.

Bybit CEO Refutes Escalating Rumors

The rumors caused a stir within the virtual currency community, with some users humorously suggesting that they would withdraw their funds from Bybit. Meanwhile, others delved deeper into the possible truth of the claims.

The genesis of these concerns appears to be linked to a user who speculated that a bug in a proof-of-reserves (PoR) graph from Arkham Intelligence might have triggered the panic.

The graph in question seemingly depicted Bybit’s wallets being drained, which led to fears of a potential hack or insolvency. However, further scrutiny revealed that, when viewed independently, Bybit’s wallets still held the funds intact, contradicting the graph’s alarming implications.

To calm the growing uncertainty, Bybit promptly clarified the situation. In his official statement on X, Zhou categorically denied the rumors, stating that none of the claims known to him had any truth. He added that users should stay updated on recent happenings.

Zhou provided a link to Bybit’s PoR and a Nansen dashboard to reinforce transparency and reassure users. These tools collectively display all of Bybit’s wallets and asset holdings to show the exchange’s financial health.

Bybit Maintains Financial Transparency Amid Challenges

Furthermore, Ben Zhou shared detailed data to affirm the exchange’s financial stability. This data includes the PoR documentation, indicating that the exchange holds assets exceeding 100% of user deposits.

This is a significant detail, as it highlights Bybit’s capability to fulfill all user withdrawal requests, thereby dispelling any notions of insolvency or liquidity issues. According to the Nansen dashboard, the platform’s wallets hold over $11 billion in crypto assets.

This data reflects the total value of token holdings in the addresses supplied by Bybit. However, Nansen clarified that this information should not be interpreted as a comprehensive statement of Bybit’s assets or reserves.

Meanwhile, in addition to the insolvency rumors, the exchange has dealt with certain regulatory hurdles. On May 16, the Autorité des Marchés Financiers (AMF), France’s securities regulator, warned investors.

The warming suggested that Bybit is not registered as a digital asset provider in the country. They further emphasized their authority to block the trading platform, which they accused of operating illegally in France.

Notably, these developments reflect the multifaceted challenges cryptocurrency exchanges like Bybit face. On the one hand, they must combat misinformation and maintain user trust by providing transparent financial data.

They must also deal with complex regulatory environments across different jurisdictions. Notwithstanding, the exchange’s swift and transparent response reflects its commitment to maintaining user trust and operational integrity.

By providing real-time data on its reserves, Bybit addressed the immediate concerns and set a precedent for transparency for subsequent dealings on the platform.