Is Bybit Legit? A Comprehensive Review for Traders

Is Bybit a Good Broker?

Bybit is a major global cryptocurrency exchange with a focus on derivatives and a growing presence in traditional financial instruments. Our research indicates that while Bybit is not regulated in the same way as traditional forex or stock brokers, it has established itself as a significant and popular platform, serving over 70 million users. It is known for its high-performance trading engine, extensive range of crypto assets, and a wide variety of trading products including perpetuals, futures, and options. However, we've noted it has been the victim of a major crypto hack, resulting in substantial losses, which raises concerns about its security, despite its claims of over-collateralization and regular audits. This is a critical factor for any trader to consider.

Who Regulates Bybit?

Based on our thorough investigation, Bybit does not operate under the supervision of a recognized financial authority, as confirmed by our review of the provided information. Unlike traditional brokers that are regulated by entities like the FCA, ASIC, or CySEC, Bybit's regulatory status is nonexistent. We have compiled a summary of our findings in the table below.

This lack of regulation means that Bybit does not need to comply with the stringent standards for investor protection, capital requirements, or operational transparency that are typically mandated by regulatory bodies. For traders, this translates to a higher level of risk. In the event of a dispute, system failure, or other issue, there is no regulatory body to mediate or enforce a resolution.

Understanding the Risks of Trading with an Unregulated Broker

The fact that Bybit is not regulated by a traditional financial authority is a primary concern. While many crypto exchanges operate in this manner, it's a fundamental difference from the regulated world of forex or stock trading. A regulated broker must segregate client funds from company operational funds, maintain a minimum amount of capital, and adhere to strict rules designed to protect investors. When a broker is unregulated, these safeguards are not in place.

We've found that Bybit is based in Dubai and registered in the British Virgin Islands. Both locations offer a more lenient regulatory environment for cryptocurrency businesses compared to major financial hubs. While the company may implement its own internal security measures, such as storing assets in cold wallets and using two-factor authentication, these are not a substitute for formal regulatory oversight. The recent hack, which reportedly resulted in a $1.5 billion loss, underscores the inherent risks of a less-regulated environment, even with a firm that claims to be over-collateralized. This event is a stark reminder that even large, popular exchanges are not immune to security breaches.

FAQs about Bybit's Legitimacy and Security

Q: How does Bybit protect my funds if it's not regulated?

A: We have found that Bybit stores users' funds in offline cold wallets and implements a multi-signature system to prevent unauthorized access. The platform also offers advanced data encryption and real-time monitoring to detect unusual activity. Despite these security measures, the absence of regulatory protection means that in the case of a platform failure or major hack, there is no government-backed insurance or compensation scheme to recover your funds, unlike with many regulated traditional brokers.

Q: Can I trade on Bybit if I am in a restricted country?

A: Bybit has a list of restricted countries and regions, including the U.S., U.K., Canada, and parts of the European Economic Area (EEA), where participation is strictly prohibited. Users must complete Identity Verification Level 1 to be eligible for events and trading, which helps the exchange enforce these geographical restrictions. Attempting to circumvent these restrictions may lead to the suspension or termination of your account.

Disclaimer

All financial trading carries a high level of risk. This review is for informational purposes only and does not constitute financial advice. We strongly advise that you conduct your own research and consult with a professional financial advisor before making any investment decisions.