The Rise of “Bybit-Backed” Claims in Crypto
In the world of decentralized finance and prop trading, credibility is currency. Recently, a wave of new trading bots, prop firms, and niche exchanges have begun heavily marketing themselves as being “Backed by Bybit.”
For a retail investor, this sounds like a gold-plated security guarantee. However, there is often a massive gap between marketing claims and legal reality. In most cases, these platforms aren’t “partners” at all—they are simply customers of the Bybit Broker Program.
1. “Backed By” vs. “Powered By”: Know the Difference
The term “backed” implies financial responsibility. If a company is backed by Bybit, it suggests that Bybit (or its venture arm, Mirana Ventures) has invested capital or provides a liquidity guarantee.
The Reality for Most Platforms: Most sites claiming this connection are actually using Bybit’s API (Application Programming Interface). They are “Powered by Bybit” in the same way a local pizza shop is “Powered by the Electric Company.” It is a service provider relationship, not a corporate alliance.
2. What is the Bybit Broker Program?
Bybit’s Broker Program is a legitimate business-to-business (B2B) solution. It allows third-party developers to build their own trading platforms while using Bybit’s massive liquidity and high-speed matching engine.
Why Platforms Love the Broker Program:
- Instant Liquidity: They don’t need to find their own buyers and sellers.
- Rebates: Bybit pays the platform a commission for every trade their users make.
- Brand Association: It allows smaller, unknown brands to “borrow” Bybit’s reputation to lure in users.
Crucial Safety Note: While your trades are executed on Bybit, your deposits are often held by the third-party platform. If that platform “rug pulls” or goes bankrupt, Bybit has no legal obligation to refund you.
3. Red Flags: How to Spot a Misleading Claim
If a platform makes the following claims, proceed with extreme caution:
- “Official Bybit Partnership”: If you cannot find a press release on the Bybit Official Newsroom, the “partnership” is likely just an API connection.
- Exaggerated Safety: Claims like “Your funds are safe because we are Bybit-backed.” Unless your funds are in a Bybit-linked Sub-Account that you control, they are at the mercy of the third party.
- No KYC Requirements: Bybit has strict KYC (Know Your Customer) rules. If a “Bybit-backed” platform allows anonymous high-volume trading, they are likely violating Bybit’s Terms of Service and risk being shut down.
4. How to Verify a Platform’s Legitimacy
Before depositing your USDT or Bitcoin, perform these three checks:
- Check the Bybit Authenticity Tool: Use the Bybit Verification page to see if the platform’s domain or social media is officially recognized.
- Inspect the API Documentation: Legitimate brokers are transparent about using Bybit for execution. If they try to hide that they are a “broker” and call themselves a “strategic partner,” they are being dishonest.
- Search for Venture Investment: If a company is truly backed by Bybit, it will be listed in the portfolio of Mirana Ventures.
What Features are Necessary in a Crypto Prop Firm?
Because of the risks involved with “white-label” platforms, you must look beyond the logo. When evaluating a provider, you need to determine what features are necessary in a crypto prop firm to ensure long-term stability
Final Verdict: Execution vs. Custody
Using a platform that leverages Bybit’s liquidity is actually a good thing for trade execution and tight spreads. However, the term “Backed by Bybit” is frequently used as a marketing shield to hide a lack of regulation or insurance. Ask yourself if the platform meets the standards of the a good crypto prop firm or if it is just a marketing facade
The Rule of Thumb: If Bybit isn’t talking about them, they aren’t “backed” by Bybit.