April 3, 2025 — In a strategic move to bolster institutional security and regain trust following a major breach, cryptocurrency exchange Bybit has partnered with Zodia Custody, a crypto custodian backed by Standard Chartered and SBI Holdings. The collaboration aims to offer segregated custody solutions and off-venue settlement for Bybit’s institutional clients.
In a press release shared on Thursday, Bybit announced that the new partnership will enable clients of its institutional division, Bybit Institutional, to retain full control over their assets even while trading on the exchange. This is made possible through Zodia’s Interchange solution, which facilitates independent custody while eliminating asset co-mingling — a common risk in centralized exchange operations.
“Institutional clients can now trade on Bybit without having to pre-fund exchange accounts, significantly minimizing exposure to exchange-side vulnerabilities and improving capital efficiency,” the company said in the release.
Focus on Transparent Custody Amid Security Concerns
Founded in 2020, Zodia Custody is known for its emphasis on compliance and institutional-grade infrastructure. The new integration allows off-exchange asset management, ensuring that client funds remain securely held even when engaged in active trading. According to Bybit, the move introduces a new level of transparency, risk management, and fee clarity for institutional players.
The announcement comes on the heels of a significant security incident in late February, when North Korean hackers breached Bybit by exploiting a vulnerability in a third-party provider, Safe Wallet, compromising an employee’s system. The attackers made off with approximately $1.46 billion in crypto assets.
In the aftermath, Bybit CEO Ben Zhou revealed that while 88% of the funds were still traceable, around 20% had become untraceable due to the use of advanced crypto mixing services by the hackers. The incident raised questions about Bybit’s internal risk controls and asset custody practices.
Rebuilding Institutional Confidence
With institutional adoption continuing to grow in the crypto space, security, segregation of assets, and operational transparency have become critical differentiators for exchanges. The Zodia partnership is a strategic step by Bybit to reaffirm its commitment to safeguarding client funds, particularly in light of the recent breach.
By offering segregated custody, no pre-funding requirements, and off-venue settlement, Bybit aims to position itself as a safer and more capital-efficient trading venue for large-scale investors and institutions navigating an increasingly regulated and risk-conscious environment.
As the exchange works to restore confidence among its user base, the partnership signals a broader trend toward hybrid models — combining the liquidity and performance of centralized exchanges with the security and compliance benefits of third-party custodians.
