Cryptocurrency exchange Bybit has announced the shutdown of several Web3 services, marking a major strategic shift following a significant security breach earlier this year. The company, which previously positioned itself as a key player in the decentralised finance and NFT spaces, is now scaling back to concentrate on its core offerings.

Multiple Web3 Services Set to Close by May 31

In an official statement released on 16 April, Bybit confirmed that it will discontinue several of its Web3 services by 31 May. These include its Cloud Wallet (a custodial wallet), Keyless Wallet (a non-custodial wallet with no seed phrase), NFT marketplace, multi-chain decentralised exchange (DEX) DEX Pro, and the Swap & Bridge cross-chain swap widget.

Additionally, Bybit’s internal loyalty programme, Web3 Points, will end on 28 April. This scheme had rewarded onchain user activity with points redeemable for trading discounts, airdrop benefits and early-access perks.

End of NFT and DEX Services

Bybit had already announced earlier this month that it was shutting down its NFT marketplace. The latest update confirms that the firm is also winding down the decentralised NFT marketplace NFT Pro, its inscription marketplace, and the Apex Pro derivatives DEX gateway. Furthermore, the fiat-to-crypto on-ramp and initial DEX offering service will also be discontinued.

This move mirrors a similar decision made by NFT platform X2Y2, which also stepped back from the struggling NFT market.

Focus Shifts to Bitcoin Yield Products

Despite the extensive cuts, Bybit is not withdrawing entirely from innovation. The company has recently partnered with Avalon, a lending protocol, to offer Bitcoin yield products. This new service enables users to earn returns on their Bitcoin holdings through arbitrage opportunities on Avalon’s fixed-rate institutional borrowing platform.

Strategic Refocus After $1.4 Billion Hack

The restructuring follows a major hack in February that led to an estimated $1.4 billion in losses. Although the company has denied any liquidity issues, the incident has prompted a closer look at operational efficiency.

Bybit stated, “In line with our commitment to the evolving onchain ecosystem and delivering high-quality services to our Web3 users, we will be optimising our current Web3 product and service offerings.”

The company has assured its users that all client assets remain fully backed and solvent, regardless of whether the losses from the hack are recovered.

Clarification on Token Listing Fees

Meanwhile, Bybit has rejected recent social media claims suggesting it charges $1.4 million to list a token on its exchange. The company labelled the allegations as unfounded and reaffirmed its commitment to transparency and fairness in its listing process.

With the crypto landscape evolving rapidly, Bybit’s latest moves indicate a shift towards consolidation and strengthening of its core exchange services, while reducing exposure to the more volatile and experimental ends of the Web3 space.