- From October 31, 2025, Bybit will not accept new user registrations in Japan.
- Japan’s Financial Services Agency (FSA) plans to classify crypto assets as financial products.
- Japan is considering allowing banks to hold and trade cryptocurrencies.
Bybit, the world’s second-largest cryptocurrency exchange by trading volume, will suspend new user registrations from Japan starting October 31, 2025.
The move comes as the country’s Financial Services Agency (FSA) prepares to implement tighter regulations that could reclassify crypto assets as financial products.
The exchange said the suspension is part of its “proactive approach” to align with Japan’s evolving legal framework.
Bybit is pausing onboarding of new Japanese users.
Effective 12:00 UTC on October 31, Bybit will stop creating new accounts for Japanese residents and citizens.
Existing users, however, will continue to have full access to all services for the time being.
In a statement, Bybit said it remains committed to operating “responsibly and in compliance with local laws and regulatory expectations.”
The company added that the pause will give it time to review local requirements and determine how to meet the new standards the FSA is preparing.
This announcement comes amid increased scrutiny of global exchanges by Japanese regulators, who have tightened oversight to protect investors and ensure transparency.
FSA prepares sweeping crypto reforms
Japan’s Financial Services Agency is preparing comprehensive changes that could reshape how crypto is regulated in the country.
Japan’s crypto market has grown rapidly, with more than 12 million registered accounts by early 2025.
Despite this growth, the FSA remains cautious about retail investor exposure.
About 80% of domestic accounts hold less than 100,000 yen (around $670), raising concerns about the risks faced by small investors who may rely on limited information.
In August, the FSA established a new “Crypto Assets and Innovation Division” to monitor the fast-evolving industry while promoting responsible innovation.
The FSA now plans to amend the Financial Instruments and Exchange Act (FIEA) in 2026 and reclassify cryptocurrencies from a “means of settlement” to “financial products.”
This change would give regulators greater authority to investigate and punish insider trading and market manipulation in crypto markets.
A working group within the FSA is also drafting Japan’s first legal definition of crypto insider trading, which could soon make such conduct a criminal offense.
These developments mark a significant step toward aligning Japan’s crypto oversight with its traditional securities markets.
At the same time, the FSA is considering allowing banks to hold cryptocurrencies such as Bitcoin for investment purposes.
If approved, this would reverse a 2020 restriction and open the door for banks to engage in crypto trading and custody services under strict risk and capital requirements.
A challenging year for Bybit
Bybit’s suspension in Japan follows one of the exchange’s most turbulent years.
In February 2025, the exchange suffered a $1.5 billion hack, one of the largest in industry history, allegedly linked to North Korea’s Lazarus Group.
In the aftermath, Bybit stepped up its compliance efforts by introducing monthly proof-of-reserves reports and expanding third-party audits to reassure users and regulators.
Independent auditor Hacken later confirmed that Bybit’s reserve ratio remained above 100% after the incident, easing customer concerns.
The exchange’s increased transparency and regulatory cooperation reflect Japan’s broader expectations for crypto firms.
Bybit’s approach aligns with the FSA’s emphasis on accountability, financial soundness, and investor protection.