Bybit has announced plans for a gradual pullback of its services for customers in Japan, introducing phased restrictions to comply with local regulations. The exchange said that it will gradually apply restrictions to Japanese residents, and any users incorrectly identified will be asked to provide additional verification documents.
“If you’re a resident of Japan, please note that starting from 2026, your account will be subject to gradual restrictions. You’ll receive additional updates on the remediation process in subsequent communications,” Bybit announced. The exchange is still not licensed by Japan’s Financial Services Agency (FSA), a requirement for serving users in the Japanese market.
Bybit to pull back from the Japanese market amid increased scrutiny
Bybit has been pulling back from the Japanese market over the past few months. The exchange stated in October that it would stop accepting new users as talks with the FSA continued. In February, Japan’s Financial Services Agency also asked Apple and Google to remove download access for five crypto exchanges operating without registration.
The exchanges in question included Bybit and MEXC Global. Now, with the phased restrictions, the exchange is further limiting its exposure in the country. Globally, Japan is considered one of the most rigorous crypto regulatory regimes, which, according to analysts and key players like WeFi co-founder and CEO Maksym Sakharov, will stifle innovation.
In October, Nikkei Asia had even reported that Japan’s financial authorities were explicitly planning to ban insider trading in the cryptocurrency market. According to the report, the Securities and Exchange Surveillance Commission (SESC) would be mandated to investigate questionable crypto trades and impose fines based on illegal gains, with the most serious cases referred for criminal proceedings.
The Financial Instruments and Exchange Act would also need to be updated, as it currently excludes cryptocurrencies from insider-trading provisions. Additionally, the FSA would need to establish a working group by the end of 2025 and submit legislative proposals in 2026. Earlier this year, the agency had also published a discussion paper examining crypto regulations.
The paper highlighted that future rules could cover insider trading in crypto transactions. Previous reporting indicates that the agency intended to classify cryptoassets under the FIEA, thereby subjecting them to existing securities laws. Meanwhile, Bybit is also staging a return to the UK following a two-year hiatus.
Bybit is introducing a new platform for spot and peer-to-peer trading that runs under a promotions arrangement approved by London-based crypto exchange Archax. Archax holds a special regulatory permit enabling it to approve financial promotions, effectively allowing firms without direct UK authorization to operate through its platform. So far, the platform has enabled both Coinbase and OKX to operate in the UK without having direct authorisation.
