TL;DR
Is Bybit a safe exchange to conduct your crypto business? This article answers that question by diving into Bybit’s security infrastructure, user protections, regulatory compliance, lack of any prior incidents, and our personal security recommendations when using the platform.
When it comes to crypto, security is a big deal. No one wants to see their hard-earned investments vanish due to some sort of hack or scam. Therefore, it’s important to periodically review the exchanges, wallets, and other crypto platforms that you’re using to ensure that the security guardrails are enough to protect your funds.
Bybit is the world’s second-largest exchange in terms of spot and derivatives trading, and it’s well-known for its huge selection of trading tools and additional features. But, just how safe is Bybit in terms of protecting your money from the litany of risks that exist within the crypto ecosystem?
Well, let’s break Bybit down, and get you a clear answer.
Bybit’s Security Infrastructure
This section explores how Bybit protects your funds and personal data. From a bird’s eye view, Bybit uses a multi-layered security architecture. So let’s look at the various pieces of this.
Asset Protection & Platform Security
First is Bybit’s cold wallet storage system, where the majority of users’ funds are kept offline, and are therefore protected from online threats. Then there’s Bybit’s multi-signature wallets, which require multiple approvals for fund transfers. This minimizes the risk of unauthorized withdrawals. Additionally, Bybit uses a “Trusted Execution Environment” and “Threshold Signature Schemes” to further protect users’ funds. And finally, Bybit operates an on-going bug bounty program, and it conducts regular proof of reserve audits, and then makes the results publicly available.
Real-Time Monitoring
Bybit uses a 24/7 monitoring system that analyses user behavior in real-time. If anything suspicious happens, like an unusual login attempt or withdrawal request, the platform will send an email notification to the user, or Bybit might freeze the account for safe-guarding and further investigation.
Privacy & Data Protection
User data on Bybit is encrypted, both during transmission and storage. The platform also adheres to global privacy standards, and an internal authorization control regime to help ensure that your personal information is handled securely.
User Security Features
This section explores the main security settings on Bybit that can be customized by you. Thus, with Bybit, you have the ability to tailor your own security parameters to your own specific needs.
Customizable 2FA Settings
2FA is a fortress in terms of security, so use it. And thankfully, Bybit offers robust two-factor authentication settings, which allow you to secure your account with either the Google Authenticator or via SMS verification. You can customize your 2FA for logins, withdrawals, password resets, security setting changes, and API management.
User Security Dashboard
Your security dashboard enables you to manage your personal security settings all in one place. Here’s some of its key features.
First, there’s your alert settings. You can customize your alert settings so that you get an immediate email notification when there’s any login attempt, trading on your account, or a withdrawal request. Next, there’s the “withdrawal whitelists” feature. This is a special list of pre-approved (by you) wallet addresses that can only receive funds from your Bybit account. Then there’s the anti-phishing codes feature. This helps you verify the authenticity of Bybit’s emails, which thereby reduces the risk of any phishing scams.
24/7/365 Customer Support
Bybit provides around-the-clock customer support, so that you can resolve any account-related security concern that may arise. The support team is trained to handle urgent issues like account recovery, or issues relating to suspicious activities with regards to an account.
Bybit’s Regulatory Compliance & Licensing
Now let’s turn to Bybit’s regulatory compliance efforts and licensing structure in relation to applicable governments and jurisdictions. From what we can see, it appears that Bybit is making a strong effort to remain in good standing with the relevant authorities.
KYC and AML Compliance
When it comes to regulatory compliance, perhaps the biggest piece is the “know-your-customer” (KYC) rules that work to serve larger anti-money laundering (AML) regulations. At a high level, KYC rules exist to help prevent crypto-related money laundering and other illicit activities.
Bybit has implemented a KYC program to remain compliant with an AML regulatory framework that exists across most of the globe. However, not only does KYC help Bybit remain compliant with the law, but it also protects you by preventing fraudulent transactions and other illegal activities on your account.
Practically speaking, KYC means that when you set up your Bybit account, you’ll need to give Bybit certain legal documents (e.g. ID cards, driver’s licenses, etc.) so that the exchange can verify your identity.
Regional Licensing and Oversight
Bybit operates under the specific regulations of the various jurisdictions that the exchange serves. Although Bybit does not operate within every country, its adherence to the regulations of the countries that it does operate within helps to build trust with both users and the relevant authorities. Here, you can find more information about where Bybit is and is not allowed.
No Prior Security Incidents
From the research we’ve conducted so far, we’re happy to report that Bybit has never had any major incident with regards to hacks, data leaks, or any other security issue. It seems as though the platform’s proactive approach to security has played a significant role with maintaining its clean bill of health.
Further validating our research is that of Certified, which is an independent blockchain security firm. Certified has given Bybit a AA security rating. You can read Certified’s report on Bybit here.
Best Practices When Using Bybit
Let’s end with some recommended security practices when using Bybit. While the exchange does go to great lengths to help secure their users funds and data, it’s ultimately your responsibility to ensure that your assets are protected, regardless if you’re using Bybit or any other platform.
So here’s our recommendations. And note that you can find most of these settings under your account security dashboard.
- Enable 2FA: Make sure this is enabled. We recommend using 2FA for login, withdrawal requests, password resets, and changes in security settings.
- Use a Whitelist Withdrawal Address Book: At the end of the day, it’s possible that this protects you more from yourself, than from others who would do you harm. Once you’ve got your whitelist properly set up, you’ll be much less likely to make any accidental mistakes when withdrawing crypto from your Bybit account.
- Activate Anti-Phishing: This will help protect you from any phishing email scammers that are attempting to mimic Bybit’s emails.
- Set a Daily Withdrawal Amount: Set a daily withdrawal amount that’s not so high that it won’t be the end of the world if someone was somehow able to withdraw some of your funds out of Bybit. If this worst-case scenario were to happen, you can stop any second withdrawal on day two by paying attention to your email alerts.
- Use a Strong Password: Come up with a unique and complex password for your Bybit account. Using a generic password, or the same one for all of your 100 online accounts just isn’t going to cut it.
- Monitor Your Emails from Bybit: The exchange will email you when there’s significant activity on your account, like login attempts, withdrawal requests, or trading activity. This is for your protection. So pay attention to these emails.
Closing Thoughts
After combing through the details with regards to Bybit’s security setup, we think that this is one of the safer exchanges for doing your crypto work. While no platform or exchange is 100% risk-free, the measures that Bybit’s does have in place, along with their customizable security settings, do provide robust security for the majority of crypto holders and traders.
But never forget that in crypto, your security is ultimately your responsibility. So good on you for taking the time to properly vet Bybit in this regard. Good luck, and stay safe!
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David learned about bitcoin in 2015 and has closely followed the crypto industry since then. His professional interests center around bitcoin, layer-one blockchain protocols, decentralized finance, and clean energy. An attorney by trade, David has held licenses to practice law in the State of Hawaii and in US federal courts.
