Bybit to Exit Japan in 2026 Over Regulatory Compliance Issues
Bybit has announced that it’s going to discontinue providers for Japanese residents and progressively implement account restrictions beginning in 2026 as a part of its efforts to adjust to native rules.
The trade, at present the world’s second-largest by buying and selling quantity, notified affected customers by way of electronic mail and urged those that imagine the classification is wrong to full Identity Verification Level 2 by January 22, 2026, or face being deemed a Japanese resident.
The resolution follows months of mounting regulatory stress from Japan’s Financial Services Agency, which has intensified oversight of unlicensed crypto platforms working in the nation.
Bybit had already suspended new user registrations from Japan in October, citing the necessity to evaluation native regulatory necessities and to consider compliance with the requirements set by Japanese authorities.
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@Bybit_Official to cease accepting new customers registration in Japan as FSA intensifies crypto regulation #Bybit #Japan #CryptoRegulationhttps://t.co/ZBbYzcpD83
— Cryptonews.com (@cryptonews) October 30, 2025
Long-Running Compliance Battle With FSA
Japan’s crackdown on unregistered exchanges dates again to 2017 laws requiring FSA-issued permits for platforms serving Japanese residents.
The regulator despatched formal warnings to Bybit in November 2024 and March 2023, claiming the trade performed crypto enterprise with Japanese counterparties with out correct authorization.
While current providers remained operational following the October registration pause, the newest announcement marks a whole withdrawal from the market.
Apple reportedly blocked Japanese users from downloading Bybit’s app in February, returning indefinite “Connecting…” messages or “Cannot join to iTunes Store” errors after they tried to entry it from the Japanese App Store.
The FSA has persistently argued that platforms like Bybit court docket Japanese purchasers via Japanese-language interfaces and buyer help, regardless of missing home licenses.
Downloads from Google Play appeared unaffected on the time, although regulatory stress continued to mount.
Bybit apologized for any inconvenience and mentioned affected customers will obtain extra updates on the remediation course of in subsequent communications.
Global Repositioning Amid Regional Regulatory Shifts
Beyond Japan, Bybit has confronted regulatory hurdles throughout Asia because it expanded into extra crypto-friendly jurisdictions.
The Monetary Authority of Singapore ordered unlicensed digital token service suppliers to stop abroad actions by June, prompting Bybit to reportedly discover relocating workers to Dubai and Hong Kong, the place licensing frameworks supply larger regulatory readability.
In reality, final month, Cryptonews reported that the exchange is in talks to acquire Korbit, South Korea’s fourth-largest crypto trade, to ease its regulatory pathway into the nation.
While there are frictions in some international locations, Dubai’s Virtual Asset Regulatory Authority has not too long ago granted licenses to over 20 corporations, together with Bybit.
Despite regional setbacks, Bybit launched its EU-dedicated platform, Bybit.eu, in July after securing a Markets in Crypto-Assets Regulation license from Austria’s Financial Market Authority.
The absolutely licensed Crypto-Asset Service Provider now operates throughout 29 European Economic Area international locations, reaching roughly 450 million customers, and has its headquarters in Vienna.
Mazurka Zeng, Managing Director and CEO, known as the launch “a long-term dedication to Europe” that balances know-how with sturdy regulatory requirements.
The trade plans to open regional places of work throughout France, Germany, Spain, and Italy whereas providing 24/7 multilingual buyer help.
Japan’s Broader Regulatory Overhaul
Japan’s tightening stance extends properly past particular person trade enforcement actions.
The FSA is making ready sweeping reforms that may outlaw insider trading in cryptocurrencies, require exchanges to maintain devoted reserves in opposition to buyer losses, and decrease crypto revenue taxes to a flat 20% from the present 55% high charge.
The regulator goals to submit amendments to the Financial Instruments and Exchange Act in 2026, reclassifying digital belongings from “technique of settlement” to “monetary merchandise” comparable to shares and bonds.
The reserve requirement proposal would mirror frameworks lengthy used in Japan’s securities trade, with platforms setting apart capital to compensate customers for hacks or operational failures following high-profile incidents, together with DMM Bitcoin’s $312 million theft in May 2024 and Bybit’s own $1.46 billion hack in February 2025.
The FSA can also be contemplating permitting banks to hold cryptocurrencies for investment purposes and allowing financial institution teams to register as licensed exchanges, reversing a 2020 restriction.
Japan’s crypto adoption continues rising regardless of stricter oversight. According to the Financial Services Agency, over 12 million registered accounts as of February 2025, and deposits exceeding ¥5 trillion.
In reality, Chainalysis reported a 120% year-over-year improve in on-chain worth acquired.
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