Speculation that a major exchange was insolvent concerned the crypto world this week. With mounting worry, users identified Bybit as the exchange in peril.
Bybit CEO Ben Zhou denied any hack or insolvency issues on X on Wednesday, assuring investors that the exchange was working regularly.
This followed Tuesday claims of imminent bankruptcy, raising concerns of another FTX-like collapse. Arkham Intelligence’s Proof-of-Reserves (PoR) graph dropped from $11 billion to $6 billion, sparking speculations.
An X user soon explained that Arkham’s graph problem led a wallet not to show nearly $4 billion in money, causing the decrease.
When examined separately, all assets were present. While waiting for answers, the community shared memes and FTX collapse allusions. One user poked fun with crypto prop desks as gossiping teens, warning against self-fulfilling prophecies.
Other people advised readers to verify news before spreading FUD. They suggested checking Bybit’s PoR and other data on many platforms.
Ben Zhou verified on May 23 that Bybit was neither hacked or bankrupt. He attached a May 8 PoR snapshot to Nansen’s dashboard to display Bybit’s $11 billion assets. Charts showed Bybit’s asset worth was over $10 billion, disproving rumors.
Bybit is under regulatory investigation as FUD spreads. In France this week, officials chastised the exchange for operating without a license.
AMF reminded the public that Bybit has been banned in the nation since 2022. The AMF said it might ban Bybit’s website and recommended consumers to protect their valuables before then.
The Hong Kong SFC called Bybit “suspicious” in March. The SFC warned about unregistered platforms in Hong Kong as part of a crackdown. The regulator deemed 11 Bybit goods “suspicious” and advised customers against investing in an unregulated site.
Bybit CEO Ben Zhou assured investors that the exchange remains stable and functioning despite the concern. Arkham Intelligence’s PoR graph dropped due to a technical error, not a lack of cash. Zhou’s quick reaction and various verifications, including Nansen’s dashboard, calmed the community.
Bybit’s regulatory issues are highlighted by the occurrence. French and Hong Kong authorities’ examination emphasizes compliance’s relevance in investor trust. Exchanges must traverse various regulatory settings to prevent future complications as the crypto business grows.
