Bybit’s Regulatory Illusion: UAE Front & Seychelles Offshore

[Douseen]

Bybit’s Regulatory Illusion: How a UAE Front and Seychelles Offshore are Used to Confiscate Personal User Deposits

Full Investigation Article on Medium:
https://medium.com/@onlysanchos/bybits-regulatory-illusion-how-a-uae-front-and-seychelles-offshore-are-used-to-confiscate-7c2e4f40a407

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Core Case Summary:
Bybit has engineered a two-tiered operational scheme. To the outside world, they present a facade of a "regulated UAE exchange" to attract global deposits. However, behind the scenes, user accounts are systematically contracted under a Seychelles offshore entity (MIRA Limited / Bybit Technology Ltd). This architecture exists for one primary purpose: to operate in a zone of absolute impunity, using account freezes and ultimatums to forcibly extract users' personal deposits.

https://i.postimg.cc/SNGv4Zfw/ultimatum.png

Facts, Timeline & Proof of Systemic Extortion:

1. 100% Account Freeze as Financial Blackmail
Account access is completely frozen without justification or proof of rule violations. The freeze is not a compliance measure; it is designed to strip the user of their assets and create maximum psychological leverage.

2. Two Outcomes of One System: Proof of Coercion
Bybit’s leverage-driven design is clearly proven by comparing two accounts subjected to the exact same ultimatum:
• Scenario A (UID 74309958) — Compliance under duress: The moment consent for fund deduction was signed under pressure, the account was unblocked in exactly 31 minutes. There was no security audit; as soon as Bybit secured the funds, the restriction was immediately lifted.
• Scenario B (UID 57999814) — Refusal: Upon refusing to surrender personal deposit funds, Bybit permanently freezes the entire balance indefinitely.

https://i.postimg.cc/L6VbSy37/31.png

3. Official Admission of a Systemic Practice (SOP)
When questioned during regulatory inquiries regarding this tactic, Bybit explicitly stated on the official record: "This is our standard procedure." This is an official admission that holding user deposits hostage is an established corporate Standard Operating Procedure.

https://i.postimg.cc/4N1SG8QD/standart.png

4. Confiscation of Personal Principal Deposits
Bybit does not merely cancel trading profits; they directly confiscate the users' original personal principal deposits transferred onto the platform from external sources.

5. The Jurisdictional Trap
When appealing to UAE regulators (CMA/SCA), they issue a formal rejection: "This account is contracted under the Seychelles offshore entity; we have no jurisdiction."

[img]https://i.postimg.cc/NfxztNkZ/otkazurisd.png

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Main Conclusion:
Bybit engineered the "UAE Front + Seychelles Offshore" structure with deliberate intent. UAE licensing and marketing serve merely as a deceptive shield to build trust and attract global capital, while actual operations are tucked away in an offshore black hole. In this lawless environment, holding balances hostage and coercing users into surrendering their personal principal deposits has been turned into a routine, highly profitable corporate policy.

[Slow death]

But who still believes and takes seriously when an exchange says it's regulated in a country that isn't a major European or US country? Even if it were regulated, we all know that most exchanges don't have physical offices and their owners are anonymous, so taking seriously when an exchange says it's regulated is something people shouldn't do ( I mean, don't take too seriously the fact that an exchange is regulated in a country with lenient laws, and don't think that just because the exchange is regulated in a country with lenient laws, then you can put a lot of money into the exchange ). Instead, they should investigate online how the exchange behaves with its clients. For example, with this exchange, in just 5 minutes of searching on Google, I already found this:

September = 113 scam accusations against them

October = 83 scam accusations against them

source: https://www.trustpilot.com/review/bybit.com

Just look at that number, we're talking about only 30 days and they had 113 scam accusations against them in September alone. The following month, October, the number decreased slightly, but it's still a very frightening number: 83 cases of scam accusations, and October isn't over yet. Today is October 24th, and that number of 83 scam accusations against them will probably rise. This shows how dangerous it is to use this exchange, but unfortunately, people are too lazy to research the sites before using them.

[Bitcoin_Arena]

Awkward!

I have never seen a case where use profits get confiscated by an exchange. This happens with casinos, but an exchange? Maybe if they would return the profits to the other trader or traders who lost the trades. It doesn't make sense to me.