Bybit's $6 Billion Crypto Withdrawal Spree: Panic or Routine?

Crypto exchange Bybit has witnessed a significant decline in its reserves, with over $6 billion in funds withdrawn over the course of two days. This mass exodus of funds follows a $1.4 billion exploit that occurred on February 21, sparking widespread panic among users.

Data from DeFiLlama reveals that Bybit processed $2.5 billion in withdrawals on February 22 and another $3.26 billion on February 23. The rapid outflows caused the exchange's total assets to shrink from $16.9 billion to $10.8 billion as of press time.

Stablecoins and Bitcoin were the most withdrawn assets, with users pulling over $2.3 billion in USDT and more than $1.5 billion in BTC. Despite the rapid outflows, Bybit managed to process withdrawals without major disruptions.

Crypto analyst Sani noted that while a significant portion of Bitcoin withdrawals appeared to be routine customer transactions, large sums were transferred to Binance and OTC platforms. This has raised questions about whether Bybit sold Bitcoin or used it as collateral to secure Ethereum and cover withdrawals.

However, the firm's CEO, Ben Zhou, reassured users that the exchange had resolved its Ethereum shortfall and that client assets remain fully backed on a 1:1 basis.