Bybit to Stop UK Services as Fin Regulators Clamp Down – Are You Affected?
Cryptocurrency exchange Bybit has revealed its decision to suspend services in the United Kingdom (UK) due to impending regulations from the country’s Financial Conduct Authority (FCA).
In a Friday announcement, the exchange said it would begin the suspension process on October 1 and would no longer accept new account applications.
This will be followed by the suspension of new deposits, new contracts, and changes to positions for existing UK users on October 8.
Due to recent UK regulatory changes, Bybit will suspend its services in the UK. New account applications cease from Oct 1, 2023, 8AM UTC. Existing UK users, please manage your positions before Jan 8, 2024, 8AM UTC. #Bybit— Bybit (@Bybit_Official) September 22, 2023
Find out more here: https://t.co/ubKN3NrFhE pic.twitter.com/06ucS4giKV
The move comes in response to the FCA’s introduction of new rules regarding marketing and communications by crypto businesses.
“Bybit has made a choice to embrace the regulation proactively and pause our services in this market,” the firm said.
“The suspension will allow the company to focus its efforts and resources being able to best meet the regulations outlined by the UK authorities in the future.”
Back in June, the FCA announced a revised financial promotions regime regarding the marketing of cryptocurrency assets.
On September 21, the agency issued a warning, reminding firms of the October 8 deadline and the potential risk of criminal charges.
While the FCA indicated that some firms may have until January 2024 to comply with the marketing rules, they would need prior approval from the regulator.
Bybit Continues to Wind Down Operations Across the World
This is not the first time Bybit has scaled back its services across the world in response to regulatory developments.
In May, the exchange announced plans to exit Canada, citing growing regulatory scrutiny in the country.
However, Bybit has also expanded into new markets, such as Kazakhstan, where it received in-principle approval to operate as a crypto custody service provider in May.
Earlier this month, Bybit CEO Ben Zhou explained that the new marketing rules set to be enforced in a few weeks will tighten the market, possibly forcing the firm off the UK market.
“We do see regulation becoming more strict. Most likely, we’ll have to retreat in many countries. I think the UK, we’ll have to exit very soon. We recently exited France.”
Zhou added that the new amendment has changed the ecosystem around financial solicitation to the extent that it makes it impossible to practice reverse solicitation, a practice most firms adopted to maneuver the previous laws.
Meanwhile, Bybit will not be alone in facing the challenges caused by the new FCA rules as several industry executives and observers have pointed out the effect of such policy.
On Sept 11, cryptocurrency exchange Luno revealed plans to halt certain clients from investing in crypto from Oct 6 two days before the enforcement of the new FCA rules.
Similarly, Delphi Labs general counsel Gabriel Shapiro has warned that most crypto firms will struggle to comply with the new financial promotions regulations.
tbh as a lawyer in the space I am close to capitulating. no one is going to be able to afford the work required to comply with this except CEXs and a few blue chip DeFi projects…even for them, there is not enough time…. https://t.co/KJrNELjmOH— _gabrielShapir0 (@lex_node) September 11, 2023