Bybit Partners With Zodia Custody After $1.45 Billion Hack

Cryptocurrency exchange Bybit, which experienced a significant security breach six weeks ago resulting in the loss of $1.45 billion, has taken proactive measures to enhance its asset security. The exchange has partnered with Zodia Custody, a firm backed by prominent traditional finance companies, to bolster its security offerings for institutional clients.

Zodia Custody provides segregated custody and off-venue settlement services, ensuring that users can trade on Bybit while their assets remain securely held in Zodia's custody. This arrangement minimizes exposure to on-exchange risks and prevents the co-mingling of funds, addressing concerns that have arisen from the recent hack.

The February attack on Bybit, which resulted in the theft of nearly $1.5 billion worth of digital assets, was the largest hack of a crypto exchange in dollar terms ever recorded. Such high-profile incidents can deter institutional adoption of digital assets, highlighting the need for robust custody services that mirror the standards expected in traditional finance.

Zodia Custody CEO Julian Sawyer emphasized the institutional focus of their product, describing it as "custody and settlement built for institutions, not retrofitted for crypto." This partnership aims to restore confidence in Bybit's security measures and attract institutional clients who require stringent security protocols.