Bybit, the world’s second-largest cryptocurrency exchange by volume, is navigating a shifting global regulatory landscape. The company recently announced plans to phase out services in Japan starting in 2026, while simultaneously marking a strategic return to the United Kingdom.
Exit Strategy: Japan’s Tightening Regulations
Following years of operating without a license from Japan’s Financial Services Agency (FSA), Bybit will begin implementing gradual account restrictions for Japanese residents in 2026. This move follows a series of regulatory pressures:
- Registration Barriers: Japan requires all exchanges to be licensed by the FSA, a standard Bybit has yet to meet.
- Active Pullback: The exchange stopped onboarding new Japanese users in October 2024 and has been targeted by the FSA in requests to Apple and Google to remove its app from local stores.
- New Legislation: Japan is currently drafting laws to ban crypto insider trading, with legislative proposals expected in 2026. Analysts warn that these rigorous standards, while increasing security, may stifle local innovation.
Expansion Strategy: A Regulated Return to the UK
While retreating from Japan, Bybit is re-establishing its presence in the United Kingdom after a two-year absence. To comply with strict UK financial promotion rules, Bybit is utilizing a unique regulatory bridge:
- The Archax Partnership: Bybit is launching a spot and P2P trading platform under an arrangement with Archax, a firm authorized to approve financial promotions. This allows Bybit to operate legally without holding a direct UK license—a model already used by competitors like Coinbase and OKX.
- Focus on Compliance: Company leadership emphasized that future UK product launches will prioritize transparency and local regulatory alignment.
Global Standing
Despite these regional shifts, Bybit continues to expand its licensed footprint elsewhere, recently securing a Virtual Asset Platform Operator License in the UAE. As it handles over $4.3 billion in daily transactions, the exchange is clearly pivoting toward markets with established, navigable regulatory frameworks.
