• ByBit CEO Ben Zhou clarified that the exchange’s exposure to bankrupt crypto lender Genesis was restricted to its investment arm Mirana.
• The reported $151 million exposure was collateralized by around $120 million which Mirana had already liquidated.
• Questions were raised by the crypto community about ByBit’s earn product, and Ben Zhou provided clarifications about how the product is managed and its yield is generated.
The crypto space was recently shaken by the news of the bankruptcy filing of Genesis Global, one of the most prominent crypto lenders in the industry. This has caused a stir in the community, as many are now questioning how the bankruptcy of Genesis could potentially affect other players in the industry. One of the questions that has been raised is the potential exposure of ByBit, one of the leading crypto derivatives exchanges, to the bankruptcy. To address these concerns, ByBit CEO Ben Zhou has released a statement clarifying the exchange’s relationship with Genesis.
Zhou stated that ByBit’s exposure to Genesis is restricted to its investment arm Mirana. According to Zhou, Mirana only managed some of ByBit’s assets, and the firm’s clients‘ funds were separated. He also clarified that ByBit’s earn product does not use Mirana. Furthermore, Zhou clarified that the reported $151 million exposure was collateralized by around $120 million which Mirana had already liquidated.
Despite the clarification from Zhou, some members of the crypto community are still skeptical about ByBit’s earn product. Kosen Labs CEO Miljan Martic tweeted that the „numbers don’t add up“ and there was „no proof of anything on (the) blockchain“ when it comes to the product. Diyan Slavov questioned if ByBit was „running an FTX/Alameda kind of relationship,“ while several others requested proof of transactions between the exchange and its investment arm.
In response to these concerns, Zhou reiterated that the earn product is managed in a secure manner and its yield is generated from a variety of sources. He also stated that all the transactions between the exchange and its investment arm are auditable, and the exchange is willing to provide proof of the transactions to anyone who requests it.
It is clear that the crypto community is still wary of ByBit’s relationship with Genesis and its earn product. However, with Zhou’s clarification, it is likely that many of these concerns will be allayed. Only time will tell if ByBit will be able to assuage the crypto community’s fears and prove that its exposure to Genesis is limited.
