Bybit to Exit Japan in 2026 Over Regulatory Compliance Issues

Core Viewpoint - Bybit will discontinue services for Japanese residents starting in 2026 to comply with local regulations, marking a complete withdrawal from the Japanese market [1][4]. Regulatory Pressure - The decision follows increased regulatory scrutiny from Japan's Financial Services Agency (FSA), which has intensified oversight of unlicensed crypto platforms [2]. - Bybit had previously suspended new user registrations from Japan in October 2024 to assess compliance with local regulations [2]. Compliance History - Japan's regulatory framework for crypto exchanges has been in place since 2017, requiring FSA-issued permits for platforms serving Japanese residents [3]. - The FSA issued formal warnings to Bybit in November 2024 and March 2023 for operating without proper authorization [3]. Service Disruption - Following the October registration pause, existing services remained operational until the latest announcement, which signifies a full market exit [4]. - Apple blocked Japanese users from downloading Bybit's app in February, indicating further operational challenges in the region [4]. Customer Engagement - The FSA has claimed that Bybit targets Japanese clients through Japanese-language interfaces and customer support despite lacking domestic licenses [5]. - Bybit has apologized for any inconvenience and will provide updates to affected users regarding the remediation process [5]. Global Strategy - Bybit is facing regulatory challenges across Asia and is exploring relocation of staff to Dubai and Hong Kong, where regulatory frameworks are more favorable [6]. - The exchange is reportedly in talks to acquire Korbit, South Korea's fourth-largest crypto exchange, to facilitate its entry into the South Korean market [7].