- Bybit will gradually reduce services for Japan-based users beginning in 2026 amid ongoing regulatory pressure.
- Japan’s strict licensing rules force unregistered crypto exchanges to limit or exit the market.
- While withdrawing from Japan, Bybit is expanding in the UK and the Middle East under clearer regulatory frameworks.
Bybit is preparing to phase out services for users located in Japan starting in 2026, signaling another shift in how global crypto exchanges handle one of the world’s most tightly regulated digital asset markets.
This move follows months of mounting regulatory pressure and earlier steps the exchange took to scale back its presence in the country.
Bybit said the process will involve rolling account restrictions applied periodically rather than immediate account closures, as it aligns its approach with Japan’s regulatory framework.
The development comes as Bybit broadens operations elsewhere, highlighting the uneven global regulatory landscape that crypto platforms must navigate.
Regulatory pressure in Japan
Restrictions will be implemented gradually for users identified as residents of Japan, with Bybit carrying out these measures in sequence.
Users who believe they have been incorrectly classified have been asked to complete additional identity verification reviews to clarify their status.
Bybit is not registered with the Financial Services Agency (FSA), which requires crypto exchanges serving Japanese residents to obtain local approval before offering services.
Japan’s regulatory regime has long been regarded as one of the strictest globally, shaped by past exchange failures and strong consumer protection concerns.
That framework has limited the ability of foreign platforms to operate freely in the country without local licensing.
Bybit’s decision to begin a structured withdrawal from 2026 reflects the growing difficulty unregistered foreign exchanges face in maintaining access to Japanese users.
Earlier restrictions in Japan
The recent announcement builds on prior steps Bybit took to reduce its exposure to the Japanese market.
In October, the exchange stopped accepting new user registrations from Japan, citing ongoing discussions with regulators.
That decision indicated that continuing full operations without registration had become increasingly unsustainable.
Regulatory scrutiny intensified in February, when the Financial Services Agency asked app stores operated by Apple and Google to suspend downloads of five unregistered crypto exchanges.
Alongside Bybit, the list included MEXC Global, LBank Exchange, KuCoin and Bitget. The move reinforced Japan’s stance that access to local users must be tightly controlled.
Industry figures have warned that such strict regulation drives innovation to other jurisdictions.
In July, Maksym Sakharov, co-founder and CEO of WeFi, said Japan’s stringent oversight was prompting crypto development to leave the country as companies seek more flexible regulatory environments.
Despite pulling back from Japan, Bybit remains one of the most active exchanges globally.
Rather than exiting regulated markets entirely, Bybit is increasingly taking a jurisdiction-specific approach: limiting certain services in some regions while expanding where regulatory frameworks are clearer or more accommodating.
Expansion outside Japan
As it scales back in Japan, Bybit is simultaneously rebuilding its presence in other markets.
The exchange re-entered the UK after a two-year pause, launching a platform that offers spot trading and peer-to-peer services.
The UK return was structured through promotional arrangements approved by Archax rather than via direct UK registration.
Bybit has also strengthened its foothold in the Middle East.
Last month, it obtained a Virtual Asset Service Provider (VASP) license from the United Arab Emirates’ Securities and Commodities Authority, eight months after receiving a principles-based approval.
The license allows the exchange to expand services in a region that has actively positioned itself as a hub for digital asset firms.