A CeFi platform founded by a Bybit co-founder. A promise of full U.S. compliance from day one. A plan to integrate deposits, yield, trading, and spending into one seamless fiat-to-crypto bridge. And then, silence — followed by an orderly liquidation just five months after the announcement.
ABFinance never launched. There was no token, no TVL, no user funds lost to a flash loan. Yet its death is more instructive than a dozen DeFi exploits. Because it exposes the single biggest lie the industry has been told: that regulatory compliance is just a checkbox, and that a star founder’s pedigree can shortcut it.
Helen Liu, co-founder of Bybit, stepped down from her role on April 30, 2026 — a full year after ABFinance was announced and shut down. The timing suggests she was already preparing her exit from Bybit when she conceived ABFinance. The project was her second act: a regulated, one-stop CeFi platform targeting the U.S. market. But by March 2025 — five months after the announcement — the team had already pulled the plug. Yields are transient; infrastructure is permanent. The infrastructure here was never built.
I’ve been in this space since 2017, auditing Solidity code in Mumbai. Back then, I caught an integer overflow that would have cost a DEX $2 million. That experience taught me to distrust surface-level narratives. ABFinance’s story is not about a failed product — it’s about a failed assumption. The assumption that U.S. regulators would welcome a CeFi platform with open arms if it just filed the right forms. But the protocol is neutral; the user is the variable. The user here is the SEC, and its variable is unpredictable.
Let me be clear: ABFinance wasn’t a scam. It wasn’t a rug pull. The team voluntarily chose liquidation, likely to avoid a regulatory showdown. That’s rational. But it’s also a signal that the U.S. regulatory environment for CeFi is not just unclear — it’s deliberately opaque. The SEC’s regulation-by-enforcement approach doesn’t come from ignorance of technology. It comes from a calculated decision to keep the rules vague, so that every new platform must tread on eggshells. ABFinance cracked them.
From my own yield farming experiments in 2020, I learned that CeFi platforms like BlockFi and Celsius were structurally fragile. Their high APRs were subsidized by new deposits, not by real revenue. ABFinance never got to the point of offering yield, but its business model would have faced the same Howey test trap. The SEC’s argument: if you pool user funds and promise returns, that’s an unregistered security. ABFinance’s “day one compliance” was a noble intention, but it couldn’t alter the legal reality. The project’s 5-month lifespan suggests it hit a wall: either it couldn’t secure a banking partner willing to work with crypto, or the SEC sent a quiet warning. I suspect the latter.
Speed is a feature, not a bug, until it breaks. The speed of ABFinance’s rise and fall is almost comical. But it’s not a bug — it’s the natural outcome of a market that still treats CeFi as a viable category. After FTX, Celsius, and BlockFi, the message should have been clear: CeFi is a ticking time bomb under U.S. law. Yet new projects keep appearing, backed by big names, convinced they can navigate the minefield. ABFinance is proof that even with a Bybit co-founder at the helm, the minefield is still a minefield.
Where my contrarian take comes in: Maybe ABFinance’s shutdown isn’t a failure. Maybe it’s the most mature decision any CeFi project has ever made. No dramatic collapse. No user funds locked in bankruptcy court. No criminal charges. Just a quiet, orderly exit. That’s rare. In a world where most projects would rather crash and burn than admit defeat, ABFinance chose to walk away. That deserves respect. But it also highlights the opportunity cost: the energy, capital, and talent that went into this project could have been deployed into a more resilient structure — like a decentralized protocol that doesn’t need to ask permission.
During my 2022 post-bear market audit of Layer 2 solutions, I saw how fragile centralized infrastructure is. I analyzed 100,000 transactions on Optimism and Arbitrum, and found that even decentralized rollups had data availability bottlenecks. But at least they had a fallback: the base layer. CeFi has no fallback. The moment a regulator frowns, the entire business model evaporates. ABFinance had no fallback, and it evaporated.
What does this mean for the market? First, the narrative of “regulated CeFi” is dead. It was already wounded after FTX, but ABFinance’s quiet death is the final nail. Second, capital will continue to flow toward DeFi and self-custody solutions. Not because DeFi is perfect — it’s full of hacks and MEV — but because it doesn’t have a single point of regulatory failure. Third, we’ll see a rise in “hybrid finance” (HyFi) — platforms that use DeFi rails for back-end operations while presenting a compliant front-end to users. The smart money is already moving there.
Art is the metadata of human emotion. The ABFinance story is not just a case study in regulatory failure. It’s a portrait of an industry still trying to find its identity. We want the freedom of DeFi, but we also want the safety of regulated banking. The two are contradictory. Until we admit that, we’ll keep seeing 5-month ghosts appear and disappear.
Curation is the new consensus mechanism. The market will curate which projects survive. Those that ignore the regulatory tension will fail. Those that embrace it — not by begging for approval, but by building protocols that are regulatory-agnostic — will thrive. ABFinance chose to engage with the system and lost. The next generation of founders will choose to build outside it.
Takeaway: The next time you see a CeFi platform with a famous founder and a “compliant from day one” tagline, ask yourself: what’s the exit plan? Because if ABFinance couldn’t make it, who can?
