Bybit CEO Ben Zhou clarified the controversy surrounding “rat trading” and “girlfriend group” through an AMA, emphasizing the company’s transparent listing process and strict risk control measures.
Yesterday, there was a significant amount of attention and dissatisfaction regarding the internal operations of Bybit, one of the five major cryptocurrency exchanges, particularly regarding the issues of “rat trading” and “girlfriend group.” Bybit’s CEO participated in an AMA (Ask Me Anything) to respond to these accusations and provide clarification. He detailed the company’s listing criteria and internal review process.
The controversy originated from accusations made by some well-known KOLs in the Chinese-speaking community on social media. According to their descriptions, there were conflicts of interest between Bybit’s internal spot and listing teams and external organization Deltalab, possibly involving improper operations. KOL DeFi Little Miner’s document pointed out that these internal members, especially high-level personnel within Bybit, were also members of DeltaLab, suggesting a potential conflict of interest. This could result in certain tokens being listed first and market manipulation based on internal information, potentially leading to insider trading or “rat trading.”
Furthermore, the accusations also mentioned the so-called “girlfriend group” issue within Bybit, referring to conflicts of interest among employees who were also members of external organizations. This could influence the company’s listing decisions, potentially giving certain tokens priority and impacting the fairness and transparency of the exchange, which could harm investors’ interests.
Key Questions
The article mentions that Bybit’s new spot and listing person in charge, Emily, was appointed by the CEO and COO.
Listing decisions are advised by Emily and the executives associated with her from Deltalab.
The CEO and COO have publicly expressed support for Emily’s decisions and currently strongly support the spot team she is leading.
Key members of Deltalab (two out of four, Zelda and Ruby) provide services related to token listing, exchange listing, liquidity provision (market-making), token financing, etc.
Ruby, after becoming the manager of Bybit’s listing team, publicly stated that she is an active cryptocurrency trader and openly shared trading prices and the cryptocurrencies she is trading.
Eight Key Doubts
The document summarized the core issues regarding the two Bybit employees associated with Deltalab. It circulated online that these two employees are close acquaintances of Emily, the person in charge of spot and listing. Employee 1, Ruby, works under Emily and was promoted to the listing supervisor in August this year. Employee 2, Zelda, joined as the new asset research supervisor in early September.
Why can Ruby retain her position as a core member of Deltalab after joining Bybit in early 2024, especially after taking on a key role in Bybit’s listing team in August?
How can Zelda maintain her position as a core member of Deltalab after joining Bybit?
What is the relationship between Deltalab and Bybit? How does this small organization’s services for cryptocurrency projects affect Bybit?
Why hasn’t Deltalab’s website removed the information that Ruby and Zelda still hold important positions?
Why did Emily recruit two core members from Deltalab into Bybit’s listing team in a short period of time? Was this based on professional qualifications or personal relationships?
How does Bybit make recruitment decisions? Is there a lack of proper due diligence, especially in ensuring no conflicts of interest?
Why can Ruby openly discuss assets related to Bybit’s spot business on Twitter and engage in activities that may raise suspicions of insider trading without punishment?
Why hasn’t Emily taken any action regarding Ruby’s public behavior, despite clear conflicts of interest?
Below are the key questions addressed by Bybit’s CEO in response:
Process of Token Listing
Ben Zhou explained that the listing process at Bybit is carried out by a professional team and not controlled by a single individual. He emphasized that when making listing decisions, the company comprehensively evaluates various factors, including market demand, project fundamentals, and team background, and ultimately makes decisions through an internal voting mechanism. A random employee is then assigned to liaise with the project. He emphasized:
When selecting tokens for listing, Bybit considers various factors such as project fundamentals, community support, and liquidity. He assured that all listing processes are transparent, and the company does not engage in market price manipulation to avoid market manipulation.
He emphasized that the company has a strong risk control team responsible for monitoring risk behaviors, including price manipulation, and takes strict measures against market makers involved in inappropriate activities. He stated:
In the past, cases of market manipulation have been discovered, such as market makers investigated by the FBI, who have been blacklisted by Bybit since six months ago.
Delta Lab Incident Clarification
Ben Zhou addressed the questions in a live session with two Bybit employees, Zelda and Ruby. Although both employees were previously core members of DeltaLab, they clearly stated that DeltaLab was a project they were involved in before joining Bybit and had no involvement in DeltaLab’s actual operations within Bybit. They also regretted that DeltaLab did not generate any income previously. Ben Zhou explained that an internal investigation will be conducted, and it is understood that DeltaLab has not conducted any trading within the Bybit exchange. Finally, he emphasized that the current situation does not constitute conflicts of interest or insider trading, but Bybit will conduct an internal review of these two employees.