ByBit Founder: I Survived the Biggest Crypto Hack and Still Had My Best Year | E168

30:16So we're like, okay, then we move on. You know, so, yeah. What's your message to leaders who are dealing with big crisis or who have to deal with big crisis? Or who will have to deal with big crisis? In terms of dealing with it or in terms of the follow-up decisions? I would say first time something big happens and maybe not everyone is able to have a whoop score as low as yours. What would you tell them? I think I think the critical when that moment happens you got to remind yourself what is your role require you to do at a time stop thinking about the consequence because or I guess stop thinking or focus or spending your energy on things you cannot control only spend at that critical time on the things you can do right something I cannot control is the money is already gone that's out of my control Something I cannot control is people is going to view us and think that we fucked up, right?

31:25Something I can't control is whatever has happened. But what I can do is do something about it so people might start to think at least we're transparent, right? And we regain the trust. So the whole point at that time is for me to focus on how to do that and also making sure all the teams are well managed so the teams are freaking out, right? when an incident happens, if you are not, if you don't have your mind in a clear place and giving out orders. So first of all, you got to give very clear orders. If you stop and you are questioning, or should we do this? You're asking the team actually, hey guys, should we do this?

32:04Should we do that? I think they're all going to give you random things and you will never get the answer. So from that point on, I just, I read, you know, I just giving marching orders. finance team you do this wallet team you do this um uh social media team you do this pr team get ready i'm gonna go on a live stream um so everything is in order and and they feel like okay every team is stopping not in chaos and you start to see some teams a little bit chaotic like customer support like everyone's freaking out what do we do i say okay we're gonna we're gonna give everyone withdraw don't worry right calm the client down and we're gonna do in this order and then so they can go back and do their job so i think that's that's uh that's the most important for me yeah one one thought i thought actually recently i was thinking about the this this hack but i was also thinking about big moments like ftx luna and all that stuff is there is there is this crazy attention for a couple of days or a week right the drama of the day or the drama of the week but then everyone moves on and so it's kind of crazy how quickly people are in the spotlight and then they're forgotten whether they're dead or alive it's kind of ruthless and yeah I would say it's like a particular thing in crypto I would say where where you

33:38one or two decisions can change completely the fate of your life or your business life right and then it's gone yeah right right because people be like oh the baby hack or or the swiss bork hack or ftx or people who lost their money in luna and then life moves on and people some people are basically dead some people are alive and that's it and it's all based on a bunch of decisions you made before and then it just continues. No, but it's only to the external. To the internal, we worked on this thing for the next 12 months after the hack, right? There was a full plan on, first of all, we realized we can never rely on a third party on such a big asset.

34:20So we need to build a banking grade code wallet system that's completely bulletproof, right? Then we consulted all the security firm and existing solutions. We picked the most secure solution, which is HSM, banking-grade HSM, locked in a vault. But typically the problem with HSM is this hardware. The problem with iPhone, if you put it in a very cold temperature, like minus something, 20 something, you can extract all the information out of it. that's the problem with regular hardware right but if you are in a completely cold hsm even if it goes in a hydro cold solution it won't it will destroy itself it's a military grade banking vault secret keeper keeping machine but those machines are designed typically for many other purposes not only for crypto so you need a layer on top like application and we can obviously design this but it takes too long so we need a third party normally the hms wallet team hardware team provides that but we don't use it because we worry if they know it's me and they have both systems so we need another third party that provides only this layer and then so we find this with multiple three four firms eventually we find this that can match this and we put them in a in a physical location with the vault we inside the vault is completely no internets and just multiple cameras and then there's multiple layers of solutions where you how you design the room if there's a fire there's automatic oxygen is gone let's say like i mean all sorts of things so it took us almost eight months to design execute and then to make sure that uh there's multiple layer of team who open the door there's one team that opens door one the only key keeper key can go in and then he relates to other guy who sets the key it's crazy but in the conclusion is you really literally have to be physically breaking into that vote and you have to know all my key personnel and half of them have to be co-working with this guy to be able to do something about it so I think that's only one thing we did on top of that there was multiple all this happened and stuff so we after this is ongoing for us for a long long long time yeah how big is bybit today in terms of staffing or give me some key numbers uh 85 million users globally um how many users were one year ago uh 63 i think wow yeah what's a user monthly active user how do you how do you categorize a user well no no so this is just register and kyc uh 85 million if you talk about uh active user we don't really look at the monthly we look at the daily we probably have half a million using the app uh logging into the app or the website half a million user every day yeah yeah make us dream big how do you take by bit to the next dimension I think the next dimension is really to become this one financial platform where truly we can be the place that offers true financial freedom where they get access to all sorts of asset classes they want.

37:57Bybit was the first exchange that offered Tritify, where it now is rarely available in Binance and other exchanges, but we were the first. So we spent quite an amount of energy to connect users in crypto back into Tritify and connect Tritify players back into crypto. And also offer payment, card solutions, basically whatever you want to do with your money, Bybit should be the kind of one-stop shop that helps you with that. So it's becoming a bank? Or much bigger than that? I think in the future, the concept of bank, broker, crypto exchange, all going to merge. Essentially, it's one place where you, one place where money things does.

38:45You can do all the things that money can do. Buying a stock, buying gold, making investment, or having a flexible savings. card spendings payment spendings transfers pay bills uh buy cars you know anything it should be within one app what's the end game for baby end game if you have to think about even after this one single place financial platform for people's life

39:27what's the end game for JP Morgan

39:35if we want to be the next JP Morgan then what's the end game I think you want to be a truly global platform that's serving clients 24 hour non-stop with all the financial services that we can offer

39:56yeah i think that'd be kind of cool of a dream place we want to get to yeah you mentioned 24 7 and you mentioned before you said i'm going to talk to these prime ministers because money is doing to crypto is doing to money what internet did for information borderless right This involves decentralization, kind of decentralized concept. Bybit made some Web3 pushes. One is called Byreal. What is Byreal? It's a DEX. It's a spot DEX on Solana, basically. Actually, it's a project one of the team members started, and she wants to try this thing. she sees opportunity it's one of those things we incubate and we support our own team to do yeah why does that make sense for a business like Bybit?

41:01I think when we launched that we saw some synergy with still today we see some synergies is that any projects wants to wants to well first of all DAX and SACs are always a little bit separated, right? Or you see exchanges have their own DAX, but only on their own chain. You haven't seen a centralized exchange making much of an impact other than a wallet. A lot of people are having their wallet, and that's kind of their infrastructure to play into the Web3 world. But most SACs don't have other infrastructures other than just a wallet, right? And when we look at DEX, we feel like it's a problem for projects that they always want to list on a SACS and they also need a DEX.

41:54What if we can offer them both? And then helping them to bridge the liquidity. Because otherwise they have this hassle of, okay, I want to list on Jupyter or Uniswap. But then I have to talk to the SACS to also list it. and then like there's a bunch of things. So we see a little bit of synergy there and that's how we play the buy real is that we see that liquidity can be bridged and also we can offer a project, both places do listing at the same time and then offer the client the benefit of trading in both places at the same time. Do you see a world where DEXs take over sexies? not in the recent not in the next 10 years maybe why

42:48because we're the road and the bridge and the transportation to to the web3 world and I think majority of people are still not there yet so they need to go there they need to go through us if they want to come back to the real world most most cases they do have need they still need to come back to to the infrastructure right yeah

43:13bybit is doing some amazing things based partnering with some people key people and key projects in the space to do some of those things we'll talk about a few of them today one is ethina what is bybit doing with ethina what are we doing with i think bybit was one of the early supporter of Athena. We were the biggest exchange. Today I'm not sure if we're the biggest but for a long period of time we're the biggest exchange for USD AOM. And Athena is the stablecoin based on the concept of doing arbitrage on the exchange and then offer the yield to the client. With this whole mechanism they offer this stablecoin, right?

44:01The reason we saw it interesting because first and foremost, we are a big derivative exchange. If this project ever wants to survive, it's almost like this project is built for Bybit or exchange-like Bybit, BitMEX or OKX or Binance with big OI and good funding fees to arbitrage. So I just thought it was a cool idea. and so we think they're going to become pretty big at some point. So we want to support. So that's how the partnership happened. When was that? Oh, I think that was like two, three years ago when they first started. Nobody know them. They just, the founder guy came to me and talked about this idea.

44:45And we were like, okay, it sounds like a cool idea. Let's give you some support. At the same time, look, I'm not doing it for free. This stablecoin is based on trading volume. so they will trade massively on Bybit so we're like okay this is interesting if they actually take off it will contribute a lot of revenue to the exchange so why not you said we thought they would become big three years have happened yeah what do you think about the project and the partnership today three years later you think it's probably one of the largest projects that came out of this last circle I mean, if we look at the last bull run and the whole cycle, who really came out of it?

45:28It's probably USD, Hyperliquid. Who else? Some prediction markets maybe. Yeah, a prediction market. Yeah, definitely. So these are the three main things that came out of it. All the rest are kind of, I don't know what's going on with them, right? So I think definitely we made the right bet. And the partnership is still ongoing. It's still good. Athena yeah Athena got a bit a hit during that October 11th thing I think there was some DPAC happening but I think they came back yeah looks pretty good yeah what's your only thoughts on a product like Hyperliquid that is pretty incredible for the space but it is also at the same time a big competitor yeah In what aspect do you mean my thoughts on them?

46:24Do I think of them as a competitor? Do you think of them as a competitor? Do you... Because I feel like it's this project that most of the space or the entire space is actually behind in terms of ethos, the way it's been built. Is there something that a Bybit could do with a project like Hyperliquid? for example I saw Byreal leveraging Hyperliquid for perps yeah so we're not we're not competing with them we're instead working with them a lot of times Bybit likes to work with the partners rather than trying to compete with each other what are you doing with a project like Hyperliquid what do I do you say we're partnering with them oh you mean Byreal so Byreal is is one of their brokers leveraging their derivatives But although I think the buy real volume is very small, I don't think Hyperliquid even care about buy real.

47:21But as an exchange perspective, I don't really see Hyperliquid as a competition

47:34because a lot of our clients, we haven't seen a lot of our clients leave Bybit because they want to go to a Hyperliquid type of deal. a lot of times our clients go is simply because we cannot serve that clients anymore due to licensing or compliance for example this is going to happen very soon europe got mika license last year we got a mika license and then very soon we need to migrate the mika eu clients into our mika site mika site doesn't have derivatives even if you have a mifid license which is is the derivative license for EU, it offers up to 10 leverage. It's nowhere competitive to hyperliquid.

48:22So what happens to those clients who wants to trade high leverage? They will go there. So I think hyperliquid positioning is quite unique in a way that we cannot compete. We are not competing, right? But I also do have concern that when regulation catch up, hyperliquid might have issues. That's my honest view. is that during the 2017-18 age of BitMEX, nobody was KYC'd, everyone was happy. And I feel like that momentum shifted to DAX. But I think regulation will catch up. And gradually, if we offer a better or a similar compliance product, even with 10 leverage, I think a lot of clients will stay with us.

49:09So eventually, I don't think, but there's also taxation issues there's also people who are just paranoid with KYC and they might go to Dex so at the end of the day it's things we cannot offer so I don't consider them as a competitor competitor is someone who offers the same thing and competing with me on the same offering right yeah Quick one I want to thank our partners who help us make this show possible thank you Trezor my favorite cold wallet to store my crypto and make sure I sleep well at night. If you want to order a treasure wallet and sleep well at night too, you can use my promo code WSH10 to get a 10 % discount.

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50:30Another partner of Bybit. I read recently some headlines Coinbase would invest in Bybit at the$25 billion valuation and help you guys launch in a compliant way in the USA. Is this correct? Yeah, that's a rumor. It's a rumor. Yes, yes. Can you tell us something about the rumor? I can't comment on the rumor. I tried.

50:57What's Bybit doing to prepare for an AI-driven world? I read some stuff about the Bybit AI Hub. Yeah. Do you want to tell us what that is? So it's, well, everyone's trying to use their agent to connect to the exchange today, right? One of the things we find we didn't have is our API and all of the API infrastructure was built for trading firms. It wasn't built for AI. So for AI to connect to a Bybit API, it needs to make a lot of mistakes. it would need to burn a lot of token to figure out the most optimum way to use our product to place the order to buy a earned product to i don't know to do basic things so the first thing we did was to but the infrastructure is there everything is there it's just that there is no road sign for the ai the ai gets lost so immediately we like okay we need to build all the road signs and print a map for the AI so they know.

52:02So those are basically the open API specs, which is for AI to read. Immediately they will get, okay, this is how I place the order. And then a bunch of skills for them to learn very quick to know how the internal API structure works so they can place orders. Yeah, and then the lastly is we build a bunch of MCP servers. how do you say that? So the spec is like when you go to a restaurant, there's a menu. So previously, there's no fucking menu. The AI just come in and they just, what am I going to eat, right? I have to figure out, go to the kitchen, figure out what the fuck is going on. So now there's a menu, but still there needs to be waitress.

52:47If you don't have waitress, they have to open, go all the way to the kitchen. And how to get to kitchen is a bit complicated. So we built a bunch of MCPs which the servers standing by. If the AI needs something, it will grab and fold them immediately and pack it to them. Yeah, so that's what we did. And then we realized one more thing we're lacking is we need to be prepared for AI world, AI agent world, that most clients will be worried their AI will freak out and lose a bunch of money. So we need to create this AI sub-account. So you as the master of your slaves or AI, whatever you call it, you can set stop loss, maximum leverage or you can enable only the product you want.

53:32And also there are certain security features like you cannot make internal transfers. You cannot, even if my AI gets hacked, they cannot do many things because I will block all these things from my side. So these are the things we're building. Essentially, one word to say is we're trying to build an AI-ready world with an AI-ready exchange. you've been in crypto for a long time you are probably very interested by AI for a long time also where is AI or where is crypto compared to each other in terms of how evolved each ecosystem are because there's so many people now crypto has been a boring phase it happens in a couple of years, they're leaving.

54:23They all go to AI. They all go to AI. The last crypto conference I went, I always thought I was in the AI conference.

54:35Do you sometimes feel like, I mean, obviously you have an incredible business. You're probably doing a lot of investments outside of crypto. Do you sometimes feel like you're missing out now on the next big thing by being in this industry, deep in this industry? do you not care? How do you compare these two industries in terms of where they are in their evolution and kind of phase?

55:02Oh yeah, I think both are extremely early. Maybe crypto is more at least adopted from an infrastructure point of view. Infrastructure, I'm meaning law, regulation, licensing and then how ready are the institution, great service adapting it? You know, you have banks, a lot of trading firms accepting crypto, right? AI, I think, but AI is so fast. They always say when a new technology comes, it will always come in the same events of circles, but just faster. And I just feel like AI is so much faster. Does that mean that there is more opportunities in crypto? I don't think they conflict each other.

55:55I think they actually supplement. Because I look at AI from twofold. One is how can it help me or Bybit as a company to become more efficient or have more deliverables than we today have. Number two is how do I build exchange to make sure when the AI ages here, we are ready. right

56:19so I wouldn't say I'm missing I'm actually always working on it as well from a crypto perspective and I think the two industry will always those two crypto and AI will collide so much because for the Asian they would literally use crypto for transaction for spending most likely so this is why a lot of the crypto folks are focused on AI because I don't think fundamentally they think they are shifting focus they are just seeing a new trend within crypto or the future how those two things would merge right yeah are you happy happy very happy yeah what makes you happy um i can solve problems every day um i almost go to the gym every day so that makes me happy uh the family is all good that also makes me happy yeah so I think so far I don't see anything that makes me not so happy yeah do you feel happier now that you're worth a lot of money if you compare to yourself back in the days

57:30I think the money part is not bringing me happy but what money does it gives me a lot of freedom to make choices on how I spend my time that makes me happy yeah but if i'm just sitting on the money and i just look at the bank account number let's say you add one more digit or two more digits does it make me extra happy i think once you reach to i don't know how much money a year income i would say maybe a few million i don't know there's not much difference in lifestyle with the people so much more billions or whatever from that point. I think everyone's eating the same steak. Everyone is flying the same thing, drinking the same water, living the same bloody, okay, you have more rooms, but it doesn't bring you crazy happiness, right?

58:16But what money does is I think it saves time and you don't have to spend time worrying about security stuff and maybe you can focus on more things that you want to do. So that makes me happy, yeah. What's one thing that you're holding on to but you know you should let go of?

58:38maybe my ethereum i'm just kidding i mean i recently had someone think are you actually asking like in terms of investment i i i thought like they were probably talking about that oh just kidding i'm just kidding yeah uh rephrase the question sorry yeah yeah what i mean it's a good answer

59:03can you just share with us like in terms of portfolio because you're also an investor like how do you see i'm actually not so much of an investor i'm not good at investing i'm definitely much more good at building things but what do you do with your money like mostly do you say i'm just gonna buy bitcoin i'm gonna keep it in cash i'm gonna buy some gold i'm gonna give it to a wealth manager and give them 1 % a year so they can take care of this and I don't look at it? I do a combination, but I would say most of it is very defensive strategy. Just trying to cover my ass that I, you know, I don't want to be broke one day and I have to worry about money.

59:46So a lot of it is just how do I make sure my asset value maintains the value. I do buy a lot of Bitcoins. What do you, when you buy Bitcoins, what's your strategy? Just say, I'm going to keep this forever. Yeah, I think this is a simple strategy when it's cheap. When it gets to 50K, you buy some more. When it goes a bit higher. What does the voice in your head tell you every morning when you wake up and every evening when you go to sleep? It's never the same thing. I don't know who actually has the same thing. What did the voice tell you last night and this morning? This morning is probably...

1:00:38What am I going to say in this interview? No. How do I not say too much shit? Yeah. My problem is I cannot control and I say too much shit. You will never beat the last interviews. I think my wife makes me stressed. Yeah. Imagine the shit I got when I got home But yeah I think I have this Daily in the morning I do a kind of Quick recap of What's on my mind It's so funny So you know how everyone says The AI agent helps you to Remind things like you tell Your claw to Remind you this and this And I found a pattern that even i tell him to remind me i don't look at the remember reminder because i'm i just when the reminder comes like fuck you stop look reminding me shit you know so i realized i still have to use my own brain so after using the ai so much i i kind of came back to where i was i just don't rely on it to become this super agent assistant thing where i still like to use my i don't know brain to remember things and probably because your brain will filter out out of all these reminders what is really important now and all the rest?

1:01:57No, no, exactly. Whenever it asks me to remind me, when it actually reminds me, I look at it and I'm like, this is not important. And then I have to ask myself what's important and then I just do it based on what I think is important. But at the time, I thought it was super important for some reason, right? So, yeah, so in the morning, I would check out on that. At night, I really try not to think. If I still think, I won't be able to sleep. And my problem is that my sleeping is I'm not sleeping enough. How do you not, how do you try not to think? How do you not think? You play some sleeping meditation.

1:02:34So I actually play some sleeping meditation that there's a lady I listen to almost every night. She's like, no, try to sleep, relax, let go. You know, this type of slow voice. Yeah, English. Slow, slow, very slow voice. And I try to listen to it. I don't want to think at night. before I go to bed. Yeah. Tell me one thing that you learned in the last 15 years that I can take with me for the next 15 years of my life. I think when it boils down to, it's kind of accept who you are and accept the way you do things and don't have the conflict within so much. a lot of times i feel like the first maybe five six years of my career i have to do many things because i i care about not care about like i still care about it's just that a lot of things internally there's a conflict and i do things maybe because of that person or because i feel like i'm a ceo i should be doing that or i'm a manager i should be doing that it's just a lot of expectation um in this interview i should be doing this and that but after all these years I just feel like you should just be yourself and because the result of twisting and not be who you are it's never the things I want the result that turns out so I just try to be who I am and don't conflict and battle with myself too much yeah let's finish the interview with this conversation with the most important question who is Ben?

1:04:20you ask me I think almost every single time the first time I did but now because you're saying I need to not have this internal conflict which is so interesting because yesterday I had a therapy session I see a therapist every two weeks and she was telling me you have this internal conflict and you're doing these things but actually this is not you right and I'm struggling so much with this

1:04:46is that what you tell yourself at night this morning i probably did but like yeah just who is ben when you say like i don't who is the ben that when he's himself doesn't have too many internal conflicts

1:05:05i think deep down um first of all you have many faces um that as a person you're never defined by one. I mean, that's my struggle as well, is that I see some people just always consistent. Like I have a few friends who are just constantly very consistent in every single phase. Maybe only that's the phase I see, but I can see myself when in a company, when in a family, when with my friends or with my pals, almost different side comes out, right? And And the struggle is which side is really me, right? What it boils down to all of them are, I think, is problem solver. I think I enjoy being solve a problem.

1:05:58Also, I enjoy responsibilities. So when there is an act based on responsibilities, this is why I'm in a company, I'm in home, because I'm the responsible father or the husband. so who is Ben I think is responsibility driven problem solver probably that's how I describe myself thank you so much for doing this Ben for coming a third time on when shift happens and I think a lot of people I mean not I think so many people told me this guy is so amazing after last podcast they nailed it they did pretty much everything right in terms of PR in terms of operations and it's not we've seen so much of the opposite in this industry right and so I think the industry was super impressed by you and by the way you guys handle that and I mean you come back today you say within 8 months we're good like now we're on another level it's amazing to see and it's amazing that you despite all that you can just be yourself and not care too much about the way you say things.

1:07:12Thank you. Thank you so much for doing this. That was awesome. Thank you. As you probably know by now, I host some of the biggest names in Bitcoin and crypto on my podcast. But a lot of the best stuff never makes it on air. The Shift newsletter is where I share that raw behind the scene alpha, the insights, stories, and lessons straight from my guests that you won't hear anywhere else. If you want the real insight take on Bitcoin and crypto, join my newsletter, the shift in the description down below.