The crypto industry is marred by financial scam attempts. Bybit cited a 2025 report by Chainalysis, which stated that nearly $17 billion in cryptocurrency was lost globally to scams and fraud last year. This underscores the urgent need for proactive risk management across the digital asset ecosystem, the company said.
Bybit, in its press release, explained how its Dynamic Risk Based Protection System is designed to prevent losses before they occur. The system categorises suspicious withdrawals into three risk tiers. Tier 1 is the low risk ‘Early Warning’ tier, where the system uses big data heuristics to identify unusual patterns such as multiple withdrawals to a newly created wallet address, following which the platform deploys automated surveys and pre emptively blacklists high risk destinations.The second tier is the medium risk ‘Real Time Alert’ category, where accounts flagged through credential stuffing databases or linked to suspicious withdrawal addresses trigger real time alerts during withdrawal. “These alerts prompt users to pause and reassess transactions, helping counter social engineering scams that rely on urgency and emotional pressure,” the company said.The third and final tier is the high risk ‘Immediate Blocking & Cooling Off’ zone. “For wallet addresses associated with confirmed fraud schemes, including ‘pig butchering’ investment scams, Bybit enforces real time withdrawal blocking along with a mandatory one hour cooling off period, allowing users to verify transactions before funds are moved,” Bybit said.
The crypto exchange said this initiative helped it intercept and recover $300 million out of the $500 million withdrawals flagged in Q4 2025, protecting over 4,000 users from potential loss of life savings. The system also identified 350 high risk investment fraud addresses through proprietary AI detection.
Bybit claimed this shielded 8,000 users from fraudulent withdrawals, blocked over 3 million credential stuffing attempts in 2025, and labelled and tagged 950 suspicious addresses through automated and manual operations.The crypto exchange emphasised that ecosystem wide collaboration remains central to its security philosophy. “Our mission in 2025 was to transform risk control from a ‘silent shield’ into an active, intelligent guardian,” said David Zong, Head of Group Risk Control at Bybit.
“By integrating AI driven on chain monitoring with real time intelligence from industry partners such as TRM, Elliptic and Chainalysis, we not only protect Bybit users but also help map the DNA of fraudulent networks. We are sharing these standardised monitoring clues across the ecosystem because a safer industry for one is a safer industry for all,” the company said in its press release.
It added that the platform will continue improving AI powered detection models and strengthening partnerships with global intelligence networks to build a safer and more resilient digital asset ecosystem.
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