Developers drained the liquidity pool, dumped their allocation, and routed the proceeds through Bybit to cash out. Bybit's derivatives-focused user base makes it a frequent cash-out point for scammers who need to convert ETH or BNB to USDT quickly. We trace the on-chain trail and file emergency freeze requests with Bybit's compliance team.
Bybit is the world's third-largest derivatives exchange by volume. Its deep USDT perpetual markets make it attractive for scammers who need to convert large amounts of stolen ETH or BNB to stablecoins quickly. Bybit's high liquidity means a developer can sell €500,000 in stolen ETH without crashing the order book — something impossible on smaller exchanges.
Bybit-specific factors: Bybit operates under multiple regulatory regimes (VARA in Dubai, registration in various EU jurisdictions under MiCA). Its compliance team is smaller and less transparent than Binance's, which can mean slower response times — but also means that well-formatted legal requests stand out and get attention. Bybit requires KYC for all withdrawals since 2023, meaning every cash-out account is tied to a real identity.
The derivatives angle: Some rug-pull developers don't just cash out on Bybit — they use stolen funds as margin for perpetual futures trading, attempting to multiply their gains before withdrawing. This creates a more complex tracing picture, but also leaves a detailed trading record on Bybit that can be subpoenaed.
Compliance structure: Bybit's compliance team operates from Dubai (VARA-regulated) and processes legal requests through their official compliance email and law enforcement portal. Unlike Binance, Bybit does not publish response time statistics. In our experience, properly formatted legal requests receive a response within 5-14 business days — slower than Binance but faster than many smaller exchanges.
Freeze capability: Bybit can freeze accounts receiving stolen funds, but requires a police report or court order. Bybit is generally more cooperative with requests from jurisdictions where they are regulated (UAE, EU under MiCA). Requests from non-regulated jurisdictions may face additional scrutiny or require MLAT channels.
KYC disclosure: Bybit will disclose account holder information to law enforcement or through a court order. They have cooperated with multiple international investigations, including cases coordinated through the Dubai Financial Services Authority (DFSA) and Europol.
Challenge — geo-restricted help center: Bybit's help center and some compliance pages are geo-restricted in certain jurisdictions (US, UK, parts of EU). If you're in a restricted region, you may not be able to access Bybit's compliance contact information directly. We handle all communication on your behalf through our Swiss office, bypassing these restrictions.
Recovery difficulty: Moderate when funds are still on Bybit. Harder if the developer used derivatives to trade away the stolen funds (trading losses reduce the recoverable amount). Bybit's derivatives settlement system means that frozen margin may be less than the original deposit if the developer lost trades.
A client invested €85,000 in an Ethereum-based token that promised a "revolutionary DeFi yield protocol." The liquidity was supposedly locked for 6 months. In reality, the developers held a secondary contract that could unlock the pool at any time. They drained €340,000 total from the pool across all victims, swapped to ETH, and deposited into a Bybit account.
The derivatives complication: The developer didn't just cash out — they used €200,000 as margin for ETH perpetual long positions. They lost €120,000 in a leveraged trade before we could freeze the account. When Bybit froze the account at our request, only €80,000 remained (plus €120,000 in realized trading losses on Bybit's books).
Outcome: 35% recovery (€30,000 of €85,000). Lower than typical because the developer's futures trading consumed a significant portion of the stolen funds before the freeze. Lesson: speed matters even more when the scammer is actively trading on a derivatives exchange.
Details anonymized to protect client confidentiality. Swiss professional secrecy applies.
Was your own Bybit account also frozen? Rug pull victims sometimes find their Bybit account flagged for receiving funds from sanctioned or scam-associated addresses. Our Bybit account unlock practice can resolve this while we trace the stolen funds.
Warning: After a rug pull, fake "recovery services" will contact you. Read our recovery scam warning before engaging anyone.
Yes, but Bybit requires a police report or court order — not just a letter from a private attorney. Bybit's compliance team in Dubai processes these requests through their law enforcement channel. Response time is typically 5-14 business days, slower than Binance. We file the request and help you file the police report simultaneously.
This is a common scenario on Bybit because of its derivatives focus. If the developer used your stolen funds as margin for futures trading and lost, the trading losses are generally unrecoverable — the funds went to the counterparty (other traders on Bybit). However, any remaining margin, realized profits, or unrealized positions at the time of the freeze are recoverable. This is why speed is critical: the longer the developer trades, the less may remain.
Yes. Bybit geo-restricts its services in certain countries (US, UK, parts of Canada), but the scammer's account is not geo-restricted — it's a functioning Bybit account. We file the legal request from our Swiss office, which is not subject to Bybit's geo-restrictions. The freeze applies to the scammer's account regardless of where you are located.
Bybit cooperates with law enforcement through formal channels, particularly with requests from jurisdictions where they are regulated (UAE, EU under MiCA, Singapore under MAS). For requests from other jurisdictions, Bybit typically requires an MLAT (Mutual Legal Assistance Treaty) request or a letter rogatory. We coordinate with your local law enforcement to ensure the request reaches Bybit through the proper channel.
If the developer withdrew all funds before we could freeze, recovery becomes significantly harder but not impossible. We can still obtain the withdrawal address and KYC information from Bybit through legal process. The withdrawal address leads us to the next destination — another exchange, a cold wallet, or a mixer. We continue tracing until we find a freezing opportunity.
Three key differences: (1) Bybit's compliance team is smaller and responds slower (5-14 days vs Binance's 3-7 days). (2) Bybit's derivatives focus means scammers may trade away stolen funds before the freeze, reducing recoverable amounts. (3) Bybit is less transparent about its cooperation track record. However, Bybit's KYC requirements (mandatory since 2023) mean every account is traceable, and the compliance team does respond to properly formatted legal requests.
Describe what happened. Include the token contract address, developer wallet, transaction hashes, and any communication. We respond within 6 hours.