Bybit, a major cryptocurrency platform, informed on Thursday that it established an institutional clients support fund worth $100 million. According to the press release, the crypto exchange wants to offer additional protection to its customers during a 'challenging period' for the digital assets industry.
Institutional clients, as well as existing and new market makers on Bybit's platform, will be able to obtain a maximum of $10 million. A similar decision was announced by Binance, the largest cryptocurrency exchange in the world, over a week ago. This action aims to stop the adverse effects of the collapse of FTX cryptocurrency exchange, which the entire industry is still experiencing.
"We are all in this together, and it's up to everyone to do what they can to support our industry, and this is one way we are helping to give back," Ben Zhou, the CEO and Co-Founder of Bybit, said.
Exchanges are also trying to rebuild the trust of their retail customers. For example, Bitget increased the investor's Protection Fund to $300 million after the FTX collapse, and its initial value was raised by $100 million to reassure traders.
Proof-of-Reserves to Calm the Nerves
In addition to protection funds for institutional and retail players, exchanges have begun to roll out Proof-of-Reserves (PoF) to ensure that they have enough cryptocurrency assets in their vaults to keep operations liquid and uninterrupted.
A Proof-of-Reserve (PoR) is an audit of a crypto exchange 's finances run by an independent firm. Many major cryptocurrency exchanges decided to implement Proof-of-Reserves after the FTX crisis, e.g., Kraken, Binance and Crypto.com.
However, widespread panic is dominating current sentiment on crypto assets. According to a recent Glassnode report, 172,700 bitcoins are leaving cryptocurrency exchanges on a monthly basis, which is the highest rate to date. It is more than during the 2020 pandemic low and more than during the collapse of the Terra ecosystem, events that also caused far-reaching panic.
