Bybit Partners With Zodia Custody To Enhance Security After $1.46 Billion Hack

Bybit, a prominent cryptocurrency exchange, has announced a strategic partnership with Zodia Custody, a leading crypto custodian backed by major financial institutions. This collaboration aims to enhance the security and transparency of its institutional clients' assets. Bybit's institutional arm, Bybit Institutional, will leverage Zodia Custody's services to provide segregated custody solutions, ensuring that clients' assets are kept separate from the exchange's own funds. This move is part of Bybit's efforts to rebuild trust and security following a significant hack in late February, where North Korean hackers stole approximately $1.46 billion worth of crypto. The breach, which involved compromising an employee's computer at Safe, Bybit’s technology provider, highlighted vulnerabilities in the exchange's security measures. In response, Bybit's CEO, Ben Zhou, acknowledged that around 20% of the stolen funds had become untraceable due to the hackers' use of mixing services. However, Zhou later indicated that 88% of the stolen funds remained traceable, demonstrating the exchange's commitment to recovering the assets and improving its security protocols.

The partnership with Zodia Custody is expected to further bolster Bybit's security measures, providing institutional clients with transparent fees and reducing the risk of exposure. Zodia Custody's "Independent Custody" solution allows investors to trade on Bybit while keeping their assets held with Zodia, ensuring full segregation and eliminating co-mingling. This arrangement not only enhances security but also improves capital efficiency by eliminating the need for institutional clients to pre-fund their exchange accounts. Bybit's decision to partner with Zodia Custody comes at a critical time, as the cryptocurrency industry continues to grapple with security challenges and regulatory scrutiny. The collaboration underscores Bybit's commitment to providing a secure and transparent trading environment for its institutional clients, positioning the exchange as a leader in the rapidly evolving cryptocurrency market.

Bybit's new partnership with Zodia Custody follows a series of security incidents that have raised concerns about the safety of digital assets on cryptocurrency exchanges. The hack in late February, which resulted in the theft of approximately $1.46 billion worth of crypto, was a wake-up call for Bybit and the broader industry. The incident highlighted the need for enhanced security measures and more robust custodial solutions to protect institutional clients' assets. Bybit's decision to partner with Zodia Custody is a proactive step towards addressing these concerns and rebuilding trust with its institutional clients. The collaboration is expected to provide a more secure and transparent trading environment, ensuring that clients' assets are protected from potential security breaches.

Zodia Custody, founded in 2020, offers crypto custody services and is supported by big names like Standard Chartered and SBI Holdings. The key benefit of the latest partnership, as Bybit puts it, is “Independent Custody,” where investors can trade on Bybit while keeping assets held with Zodia Custody, ensuring “full segregation and eliminating co-mingling via the Interchange solution.” This allows institutional clients to trade on Bybit while keeping assets held with Zodia Custody, ensuring “full segregation and eliminating co-mingling via the Interchange solution.” Additionally, Bybit also claims that thanks to Zodia, institutional clients no longer need to pre-fund exchange accounts, which “minimizing exposure to exchange-side vulnerabilities and improving capital efficiency.”