Bybit Phases Out Services for Japanese Residents in Compliance with Regulatory Requirements by 2026

Japan Implements Regulatory Limits on Bybit Crypto Exchange Services

The popular cryptocurrency exchange, Bybit, has unveiled plans to gradually restrict services for its users in Japan from the year 2026. The move aligns with its efforts to conform to the country’s regulatory directives concerning cryptocurrency exchanges. The restrictions will be put in place progressively to enable a smooth transition for the platform’s users, and mark a significant shift in Bybit’s operations within the Japanese market.

Rolling Restrictions for Japanese Residents

The cryptocurrency exchange platform stated that the restrictions in Japan will affect users on a rolling basis. For users who have been mistakenly flagged as Japanese residents, there will be a need for further identity verification procedures. Observers in the crypto industry have noted the significance of this development as Bybit represents one of the world’s largest crypto exchanges. In fact, as recently as the date of the announcement, it reportedly processed an estimated $4.3 billion in trades within a 24-hour period. Bybit is yet to register with the Financial Services Agency (FSA) in Japan. The FSA mandates that cryptocurrency exchanges offering services to Japanese users must obtain local approval. This in large part explains the move by Bybit to begin restrictions on accounts belonging to Japanese residents. The exchange has urged its users to stay updated for future communications regarding the process of these restrictions.

Bybit and Japanese FSA Regulations

This progressive implementation of restrictions slipped out of Bybit follows a sustained relationship with Japanese financial authorities. In October, citing ongoing discussions with the FSA, Bybit paused new user registrations. The FSA sought to maintain firm regulatory oversight, requesting Apple and Google in February to suspend downloads of five unregistered cryptocurrency exchanges, one of which was Bybit. Japan’s regulatory measures for cryptocurrencies are regarded as amongst the world’s most stringent. The efforts to enforce regulatory compliance appear to be pushing innovation and emerging exchange platforms out of the country’s landscape, according to some industry experts.

Expansion Plans Amidst Restrictions

While scaling down its operations in Japan, Bybit has concurrently strategized on market expansion into other parts of the world. A case in point is its recent re-entry into the UK market after a two-year hiatus. In the UK, Bybit intends to provide a peer-to-peer service along with spot trading, operating under a promotions arrangement sanctioned by Archax. In addition to its UK ventures, Bybit secured a Virtual Asset Platform Operator License from the Securities and Commodities Authority of the United Arab Emirates (UAE). The license approval came through eight months after receiving preliminary approval from the local UAE authorities.

Conclusion

Maintaining compliance with global regulatory requirements poses inevitable challenges for growing crypto exchanges like Bybit. The move to incrementally restrict services for Japanese residents is an indicative response to Japan’s stern regulatory climate. Nonetheless, Bybit continues to thrive and grow its user base globally, underlining its adaptability and resilience in the face of shifting regulatory landscapes in the global cryptocurrency market.