• Bybit CEO Ben Zhou clarified that Bybit had $150 million exposure to the bankrupt crypto lender Genesis via its investment arm Mirana.
• Zhou noted that Mirana only managed a portion of Bybit’s assets and the reported $151 million exposure has about $120 million of collateralized positions, which Mirana had already liquidated.
• He also assured that client funds are separated and Bybit’s earn products don’t use Mirana.
On January 20, 2023, the crypto community was abuzz with news that Genesis Global Trading, a prominent crypto lender, had filed for Chapter 11 bankruptcy protection in New York. This was the latest company to declare bankruptcy in the wake of FTX’s collapse, and questions soon began to arise about other firms that had exposure to the bankrupt lender.
Reports suggested that a total of nine crypto firms had exposure to Genesis, including Gemini, Bybit, VanEck, Decentraland and others. Bybit CEO Ben Zhou was quick to respond to the reports and clarified that Bybit indeed had $150 million exposure to the bankrupt crypto lender via its investment arm Mirana.
Zhou explained that Mirana only managed a portion of Bybit’s assets and that the reported $151 million exposure had about $120 million of collateralized positions, which Mirana had already liquidated. He also assured the community that client funds are separated and Bybit’s earn products don’t use Mirana.
The move was met with mixed reactions from the community. While many appreciated the quick clarification from the CEO, many others had more questions regarding the clarification, especially about the company’s earn products. They also questioned Bybit’s timing in revealing their exposure, and demanded proof to back up the reassurance from the CEO.
In the wake of the news, Bybit has taken extra precautionary measures to protect their clients and their investments. They have implemented additional security protocols and have increased their customer support capabilities. In addition, Bybit has also released a detailed statement, outlining the steps they are taking to mitigate the potential risks of their exposure to Genesis.
The company has also reiterated that their customer funds are protected, and that their earn products are completely separate from their investment arm. They have also promised to continue to monitor the situation closely, as well as take any further steps necessary to protect their clients from any potential risks.
Overall, Bybit’s quick action and transparency in dealing with the situation has been well received by the community. They have taken the necessary measures to ensure that their clients‘ funds are protected and their earn products are unaffected by the bankruptcy of Genesis Global Trading.