Understanding ByCustody Off-ExchangeByCustody Off-Exchange lets you trade on supported centralized exchanges while keeping your assets securely held within ByCustody's custody infrastructure. Instead of depositing assets directly to an exchange, you transfer them to a connected Off-Exchange Vault, where they remain securely held and serve as collateral for your trading activity.
The Off-Exchange Vault operates under a three-party governance model, ensuring that no single party has unilateral control over the assets, reducing counterparty risk while maintaining operational integrity:
Co-Ownership Structure
UserRetains ownership and visibility of assets; approves settlement transactions within the agreed SLA
ByCustodyProvides secure custody, policy enforcement, and transaction orchestration
ExchangeExtends trading credit against the locked collateral and participates in the settlement process
Zero Counterparty RiskByCustody Off-Exchange combines institutional-grade custody with capital-efficient access to centralized exchanges. Keep assets securely held within ByCustody's custody framework, reduce counterparty risk by avoiding direct exchange custody, access exchange liquidity without transferring assets, and settle transactions through predefined workflows and SLAs.
How Off-Exchange WorksByCustody Off-Exchange is powered by Off-Exchange Vaults — dedicated vaults that securely hold your collateral while reflecting an equivalent trading balance in your linked exchange account. These vaults are created in a separate collateral workspace, independent of your primary workspace.Once assets are transferred into an Off-Exchange Vault, they are automatically locked as collateral. The exchange verifies the locked collateral and credits your account with an equivalent available trading balance, so you can trade on the exchange while your assets remain securely held in ByCustody.
The framework also includes additional safeguards: recourse mechanisms for situations in which either the user or the exchange does not meet the agreed obligations or SLAs, and business continuity measures to address temporary disruptions to ByCustody services or Off-Exchange functionality.
My Vault
Off-Exchange VaultCollateral Locked
Exchange CreditTrading Balance
Trade on Exchange
Supported AssetsOnly supported assets can be used with ByCustody Off-Exchange. Contact your ByCustody Relationship Manager (RM) to request support for additional assets. Deposit only supported assets into an Off-Exchange Vault — unsupported assets may not be recoverable. If you accidentally deposit an unsupported asset, contact your RM immediately.
#AssetThresholdChainType
1BTC0.1 BTCBTCNormal
2AAVE2 AAVEETHNormal
3CMBMINT10 CMBMINTETHRWA
4ETH0.5 ETHETHNormal
5LINK7 LINKETHNormal
6METH0.5 METHETHNormal
7QCDT100 QCDTETHRWA
8UMINT1 UMINTETHRWA
9UNI20 UNIETHNormal
10USDC100 USDCETHNormal
11USDE100 USDEETHNormal
12USDT100 USDTETHNormal
13USDTB100 USDTBETHNormal
14XAUT0.03 XAUTETHNormal
15MNT100 MNTMANTLENormal
16SOL1 SOLSOLNormal
17XRP200 XRPXRPNormal
Onboarding ByCustody Off-ExchangeFollow these steps to activate ByCustody Off-Exchange:
1
Contact your ByCustody Relationship Manager (RM) to create your Bybit Custody UID and obtain your API key and API secret from “User Settings”.2
On the “Off-Exchange Vault” tab, the workspace Owner enters the account details and selects one or more Off-Exchange Operators from the list of eligible users. Only users with the Operator role can be assigned as Off-Exchange Operators.3
Off-Exchange Operators are responsible for managing Off-Exchange Vault activities, including settlements and withdrawals.4
Submit the activation request. Once your application is approved, your RM will notify you and you can begin adding collateral to your Off-Exchange Vault.Adding & Removing Collateral
Adding Collateral
1
Deposit supported assets into your “My Vault” address.2
Transfer the assets from “My Vault” to your Off-Exchange Vault. Ensure that the transfer meets the minimum collateral requirement.3
Once the on-chain transfer is confirmed, the collateral is automatically mirrored to your linked exchange account and becomes available for trading.Removing Collateral
1
Ensure that there isn’t a settlement currently in progress. Withdrawals are unavailable while a settlement is active.2
In your Off-Exchange Vault, select the asset you wish to withdraw and click “Transfer Out”.3
Select a destination wallet. The destination address must be whitelisted — contact your ByCustody RM for the whitelisting process.4
Approve the withdrawal in the ByCustody app.5
After the exchange approves the withdrawal, the corresponding available trading balance is deducted from your exchange account.SettlementsExchanges calculate settlements and send settlement instructions to ByCustody for transfers to and from the Off-Exchange Vault. The settlement process includes the following parameters: settlement calculation (gross or net), settlement cycle (varies by exchange), settlement approval SLA, and settlement review SLA.
Settlement ThresholdThe settlement threshold is the minimum amount required for a settlement. Balances below the threshold are not settled. Settlements can be initiated by either the user or the exchange.
Bybit Settlement SLA
ParameterValueDescription
Settlement cycleEvery 2 hoursThe exchange initiates settlement automatically according to its cycle
Settlement approval SLA4 hoursTime allowed for the user to approve outbound settlement transactions
Settlement review SLA72 hoursTime allowed for the exchange to review a rejected settlement
User-Initiated SettlementsYou can initiate a settlement at any time instead of waiting for the exchange’s scheduled settlement cycle. Before starting a new settlement, ensure that there isn’t already one in progress.
1
On the “Off-Exchange” tab, select the vault you wish to settle, then click “Settle”.2
Review the settlement summary generated by the exchange, then click “Settle” to continue.3
Complete two-factor authentication (2FA) to submit the settlement request.4
If outgoing transactions are generated, approve them in the ByCustody app.5
After the outgoing transactions are completed, incoming transactions are generated automatically and credited to your Off-Exchange Vault.Gas Management
Deposits to the Off-Exchange VaultWhen transferring assets from “My Vault” to an Off-Exchange Vault, you are responsible for paying the network gas fee. For non-native tokens (such as ERC-20 or SPL tokens), ensure that your wallet contains enough native tokens to cover the gas fee.
SettlementsFor settlement transactions between ByCustody and the exchange, ByCustody pre-funds the required gas fees to the Off-Exchange Vault address to ensure that the settlement can be completed. These gas funds are not credited to your vault balance and cannot be used or withdrawn. Actual gas fees are tracked and billed to you periodically.
Withdrawals from the Off-Exchange VaultFor withdrawals from an Off-Exchange Vault, ByCustody pre-funds the required gas fees to the Off-Exchange Vault address to ensure that the withdrawal can be completed. These gas funds are not credited to your vault balance and cannot be used or withdrawn. Actual gas fees are tracked and billed to you periodically.
Gas Billing NoteGas fees for settlements and withdrawals are advanced by ByCustody and billed to your account periodically. These amounts do not appear in your vault balance and cannot be used or withdrawn.
Forced Settlements for ByCustody Off-ExchangeA settlement updates asset balances between your Off-Exchange Vault and your linked exchange account. If a settlement requires an outbound transfer, you must approve it — once completed, any inbound assets from the exchange are automatically credited to your Off-Exchange Vault. If a settlement requires your approval and you do not respond before the applicable SLA expires, the exchange may instruct ByCustody to complete the settlement on your behalf if all of the following conditions are met:If You Do Not Approve a SettlementExchanges require outbound settlement transactions to be approved within a specified SLA. If you believe a settlement is incorrect, reject the transaction and contact the exchange before the SLA expires. If no action is taken before the deadline, the exchange may instruct ByCustody to approve and complete the settlement on your behalf.If You Reject a SettlementIf you believe a settlement has been calculated incorrectly, you can reject it. The exchange is notified immediately and reviews the settlement. If the exchange confirms the original settlement is correct, it may authorize ByCustody to complete the settlement after the review SLA expires. If the settlement is found to be incorrect, the exchange adjusts the settlement in the next settlement cycle.
1
You have not approved the settlement.2
You have not rejected the settlement.3
The response SLA has expired.Failed Settlement Due to Blockchain ConditionsSettlement transactions may fail because of blockchain conditions, such as network congestion or chain suspension. If this occurs, a new settlement transaction is generated and you must approve it. If the approval SLA expires without a response, the exchange may instruct ByCustody to complete the settlement on your behalf.
Exchange Default or Unresponsive ExchangeIf your connected exchange becomes insolvent or unresponsive, ByCustody can remove the programmatic lock on your Off-Exchange Vault and terminate the settlement connection. This may occur under the following circumstances:Unlinking the Settlement Connection and SLA
1
The exchange enters bankruptcy, liquidation, restructuring, or is declared insolvent by a court.2
The exchange fails to respond to multiple settlement or authorization release requests within a reasonable timeframe.3
The exchange repeatedly demonstrates abnormal settlement behavior, such as rejecting legitimate withdrawal requests or producing incorrect settlements.4
Other material contractual breaches are confirmed through ByCustody’s internal risk assessment.PhaseTimelineDescription
Initial Response & ConfirmationWithin 48 hoursAcknowledge the request, confirm the incident, and initiate the review
Evidence Verification & ApprovalUp to 7 business daysComplete fact verification and multi-level approvals
Unlink Execution & Restoration2–5 business daysRemove the settlement connection and restore full asset control to the client; complex cases may take longer
Client ProtectionClient assets remain fully segregated within ByCustody vaults. Once the settlement connection is removed, you can immediately withdraw assets, transfer funds, or perform other independent actions. ByCustody provides technical support throughout the transition — for contractual or architecture details, contact your ByCustody RM or submit a support request.
Need help with Off-Exchange?Contact your Relationship Manager or reach our institutional support team.