- Starting October 31, 2025, Bybit will no longer accept new user registrations from Japan.
- Japan’s Financial Services Agency (FSA) plans to reclassify cryptocurrencies as financial products.
- Japan is considering allowing banks to hold and trade cryptocurrencies.
Bybit, the world’s second-largest crypto exchange by trading volume, will suspend new user registrations in Japan effective October 31, 2025.
The decision comes as the country’s Financial Services Agency prepares to implement stricter rules that could reclassify cryptocurrencies as financial instruments.
The exchange said the suspension is part of its “proactive approach” to align with changes in Japan’s evolving legal framework.
Bybit pauses onboarding of new Japanese users.
From 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 allow it to review local requirements and determine how best to meet the new standards being developed by the FSA.
This announcement arrives amid increased regulatory scrutiny of global exchanges by Japanese authorities, who have tightened oversight to protect investors and improve transparency.
The FSA prepares sweeping crypto reforms
Japan’s Financial Services Agency is preparing major changes that could reshape how cryptocurrencies are regulated in the country.
The crypto market in Japan has expanded rapidly, with more than 12 million accounts registered as of early 2025.
Despite this growth, the FSA remains cautious about retail investor exposure.
About 80% of domestic accounts hold less than 100,000 yen (roughly $670), raising concerns about the risks faced by small investors who often rely on limited information.
In August, the FSA established a new “Crypto Assets and Innovation Division” to monitor the fast-evolving sector while promoting responsible innovation.
The FSA now plans to amend the Financial Instruments and Exchange Act (FIEA) in 2026, reclassifying cryptocurrencies from a “means of settlement” to “financial products.”
That reclassification would give regulators greater authority to investigate and penalize insider trading and market manipulation within the crypto market.
An FSA working group is also drafting Japan’s first legal definition of crypto insider trading, which could soon make such activity a punishable offense.
These developments mark a decisive move toward aligning Japan’s crypto oversight with the supervision applied to 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 participate in crypto trading and custody services, subject to strict risk and capital requirements.
A challenging year for Bybit
Bybit’s suspension of new registrations in Japan follows one of the company’s most turbulent years.
In February 2025, the exchange suffered a $1.5 billion hack—one of the largest in industry history—an attack that was reportedly linked to the Lazarus Group from North Korea.
After the breach, Bybit stepped up its compliance efforts by introducing monthly proof-of-reserve reports and expanding third‑party audits to reassure customers 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 broader expectations in Japan for crypto firms.
Bybit’s approach aligns with the FSA’s emphasis on accountability, financial soundness, and investor protection.