Bybit has acquired former FTX users to become the world’s second-largest crypto exchange
Bybit Fintech’s crypto exchange has surpassed FTX’s defunct platform in terms of trading volume, targeting former clients, European and Russian users.
Dubai-based Bybit’s growth is attributed to its service that enables digital tokens to be used as collateral for margin trading, filling the gap left by FTX.
Zhou seized the opportunity when FTX collapsed, referring to the bankruptcy of Sam Bankman-Fried’s fraudulent platform, which was popular but fraudulent.
Bybit’s trading volume has doubled to 16% since October, surpassing Coinbase Global in March, according to Kaiko data, and is second only to Binance Holdings for spot and derivatives transactions.
Crypto Recovery
Bitcoin’s price doubled in the past year, benefiting exchanges due to the introduction of US exchange-traded funds, a comeback from a bear market and FTX’s 2022 crash.
Bybit introduced a trading account post-pandemic, enabling cross-margin trading with over 160 tokens and allowing users to tap unrealized profits to open new positions, a unique feature.
Bybit’s largest market is Europe, accounting for 30%-35% of volumes, according to Zhou. A fifth of its business comes from the Commonwealth of Independent States (CIS), with Russia being the largest source of business within the CIS, a loose group of former Soviet nations. Bybit has acquired former FTX users to become the world’s second-largest crypto exchange
Bybit must navigate Russia’s crypto use amid potential sanctions violations following Putin’s invasion of Ukraine.
Sanctions Pitfall
Bybit, a company that screens Russian clients, is establishing an office in Georgia and pursuing a digital-asset license after securing a permit in Kazakhstan last year.
Binance, a six-year-old exchange, has advanced due to a plea deal between the market leader and US authorities, which included a US$4.3 billion corporate penalty and jail time for co-founder Zhao Changpeng over sanctions and anti-money-laundering breaches. Zhou predicts significant growth in these areas.
Bybit, an offshore exchange primarily serving overseas customers, is experiencing a reset due to tighter regulations governing digital-asset businesses.
New Markets
Zhou suggests that Europe is being replaced by new markets like Brazil, Turkey, and Africa due to regulations under the Markets in Crypto-Assets Regulation framework.
The platform has opened to Chinese citizens living outside the country, despite Beijing’s ban on crypto trading, with legal assessments suggesting the risks are relatively low, according to Zhou.
Bybit has initiated a compliance review of its dealings with prime brokers, a key source of liquidity in crypto markets. The review aims to understand the relationship between platforms and these brokers, as they match institutional traders to exchanges.
Bybit, established in 2018, has over 30 million users and a trading volume of $2.9 billion in the past 24 hours, nearly half of Binance’s $6.3 billion. With offices in Dubai, Singapore, and Hong Kong, Bybit plans to open its first European office in the Netherlands in August.
Zan, a blockchain arm, aims to become Google or Microsoft of Web3 in Hong Kong
Ant Digital Technologies, a subsidiary of Chinese fintech group Ant Group, plans to establish Hong Kong blockchain venture Zan as a significant player in the global Web3 industry, leveraging the city’s favorable environment.
Ant initiated the blockchain project in September last year with the aim of establishing a crucial technology company at the core of Web3, similar to how Google and Microsoft became essential service providers in the Web 2.0 era.
Zhang stated that Ant plans to integrate its technology services, including blockchain and financial compliance, into Web3 developers.
Zhang stated that Zan plans to achieve the largest market share in the Asia-Pacific within two or three years by offering technical solutions for Web3 developers, including node provider services and know-your-customer verification, through Ant Group, an affiliate of Alibaba Group Holding.
Ant Digital Technologies, the largest enterprise-facing blockchain platform in China, holds 26.5% of the blockchain-as-a-service market in 2023, according to a report by IDC. The company also established Zan in Hong Kong to expand its blockchain services outside mainland China, according to Zhang.
AntChain, a leading blockchain company in mainland China, plans to expand its operations in Hong Kong due to the city’s supportive policy guidance and open environment. Zhang believes AntChain can focus on more forward-looking innovations in the relatively conservative environment of Hong Kong.
The Chinese government has intensified its crackdown on cryptocurrencies, the primary use case of blockchain technology, citing their disruption of economic and financial order and potential criminal activity. Meanwhile, Hong Kong is promoting its development as a virtual asset hub and attracting business with Beijing’s approval.
The company is collaborating on sandbox projects to tokenise electric vehicle charging stations and electronic bills of lading in the global shipping industry. Zhang explains that trading tokenised assets and funds on blockchains has a more regulated and secure environment, ensuring money safety due to private keys.
