Hidden Road Halts Bybit Access

Hidden Road, a prime brokerage backed by Citadel Securities, has suspended client access to the cryptocurrency trading platform Bybit.

The suspension stems from disagreements over know-your-customer (KYC) and anti-money laundering (AML) requirements. Sources familiar with the matter confirmed that Hidden Road stopped offering clients access to Bybit several weeks ago.

Client Notification and Compliance Review

According to a Bloomberg report, Hidden Road informed its clients about the decision to block access to Bybit a few weeks ago. The exact nature of the disagreement between the two companies remains unclear.

In response to the suspension, Bybit has initiated a comprehensive compliance review of its prime brokerage business. This move comes as regulators have tightened scrutiny over crypto exchanges, particularly following Binance's recent legal troubles.

After Binance's historic $4.3 billion settlement with U.S. authorities last year, the crypto exchange requested prime brokers, including Hidden Road and FalconX, to implement more stringent checks to keep U.S. investors off the exchange.

A Bybit spokesperson stated, "Bybit will not comment on specific inquiries related to counterparties at this time. However, the company is committed to transparency and will provide further updates as the review progresses."

Impact on Clients and Market Sentiment

While the issue has only impacted some users, it has caused dissatisfaction among clients who preferred accessing crypto through trusted companies or brokers.

Last month, Bloomberg also reported that Hidden Road aimed to raise $120 million in a Series B equity round. Hidden Road offers prime brokerage services for foreign exchange and digital asset markets.

Addressing Rumors and Ensuring Stability

Recent speculations about Bybit's potential hack or insolvency have raised concerns within the crypto community.

This prompted CEO Ben Zhou to address these claims on May 23. Amid social media rumors questioning the exchange's solvency and security, Zhou assured users of Bybit's financial stability and robust security measures.

"Bybit remains solvent and secure, showcasing over $11 billion in assets as verified by Nansen data." - Ben Zhou, Bybit CEO

Zhou took to Twitter to address the escalating rumors directly, emphasizing that none of the claims had any factual basis.

He highlighted Bybit's updated Proof of Reserves (PoR) and reassured users and the wider crypto community about the platform's safety and financial health.