Bybit Halts New User Registrations in Japan
In a strategic shift, Bybit, a prominent cryptocurrency exchange, has decided to put a hold on new user registrations in Japan amidst growing pressure from the Financial Services Agency (FSA). This move, announced in a press release on October 30, will take effect from October 31, as the exchange prioritizes an internal assessment to better meet the stringent and evolving regulatory requirements set by the FSA.
Impact on Current Users
While this decision may seem to open a significant gap in the Japanese market for Bybit, which ranks as the world’s second-largest exchange by trading volume, the company reassured its current Japanese users that their services will remain unchanged for the time being.
“There will be no immediate changes to the services available for existing Japanese users at this stage,”
Bybit stated, promising further updates if any changes arise in the future. The exchange also expressed regret for any potential inconvenience this pause might cause to its user base in Japan.
Regulatory Changes and Compliance
The rationale behind this decision is rooted in the FSA’s overhaul of its regulatory framework concerning cryptocurrencies. The agency is in the process of migrating regulatory oversight from the earlier Payment Services Act to the more stringent Financial Instruments and Exchange Act (FIEA). This transition raises the compliance standards for cryptocurrency exchanges like Bybit by classifying cryptocurrencies as financial instruments, akin to those applied to securities.
Future of Cryptocurrency Regulations
In addition to this shift, the FSA is reportedly considering a significant initiative that could permit traditional banks to directly hold Bitcoin, potentially transforming the financial landscape and necessitating stricter operational controls for all licensed entities in the sector.
Bybit’s Challenges and Security Concerns
Bybit’s regulatory challenges in Japan mark a crucial moment for the exchange. Established in 2018, Bybit quickly gained traction in the crypto space, amassing over 70 million users globally. However, earlier this year, the firm faced a considerable setback when it was the target of a massive security breach, with losses estimated at $1.5 billion due to a hack attributed to the North Korean Lazarus Group. This incident underscores the heightened risks in the volatile cryptocurrency market and adds extra urgency to Bybit’s current compliance efforts in Japan.
