- Bybit will gradually reduce services for Japanese users starting in 2026 amid ongoing regulatory pressure.
- Japan’s strict licensing rules force unregistered crypto exchanges to limit services or exit the market.
- While scaling back in Japan, Bybit is expanding in the UK and the Middle East under clearer regulatory frameworks.
Bybit plans to phase down services for users based in Japan beginning in 2026, marking another shift in how global cryptocurrency exchanges respond to one of the world’s most tightly regulated digital-asset markets.
This step follows months of regulatory pressure and prior actions the exchange took to reduce its footprint in the country.
Bybit said the process will involve progressive account restrictions applied over time rather than an immediate shutdown, as the platform aligns with Japan’s regulatory framework.
The move comes even as the platform expands into other jurisdictions, underscoring the uneven global regulatory landscape facing crypto firms.
Japan’s regulatory pressure
The staged restrictions will affect users identified as Japanese residents, and Bybit will implement the measures on an ongoing basis.
Users who believe they were misclassified have been asked to complete additional identity checks to resolve 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 worldwide, shaped by past exchange failures and a strong emphasis on consumer protection.
That framework has limited the ability of foreign platforms to operate freely in Japan without a local license.
Bybit’s decision to begin a structured withdrawal in 2026 reflects the growing difficulty unregistered exchanges face in maintaining access to Japanese users.
Previous restrictions in Japan
The latest announcement builds on earlier steps Bybit took to curb its exposure to the Japanese market.
In October, the exchange halted new user registrations from Japan, citing ongoing discussions with regulators.
That decision signaled that continuing full operations without registration was becoming increasingly unsustainable.
Regulatory scrutiny intensified in February when Japan’s Financial Services Agency asked app stores run by Apple and Google to suspend downloads of five unregistered cryptocurrency exchanges.
Alongside Bybit, the list included MEXC Global, LBank Exchange, KuCoin and Bitget. The action reinforced Japan’s stance that access to local users must be tightly controlled.
Industry figures have warned that these regulatory constraints are pushing innovation to other jurisdictions.
In July, Maksym Sakharov, co-founder and CEO of WeFi, said that Japan’s strict oversight is driving crypto development outside the country as firms seek more flexible regulatory environments.
Despite its withdrawal from Japan, Bybit remains one of the more active exchanges globally.
Rather than fully abandoning heavily regulated markets, Bybit has increasingly adopted jurisdiction-specific strategies—restricting certain services while expanding into regions with clearer or more accommodating frameworks.
Expansion beyond Japan
While scaling back in Japan, Bybit is simultaneously rebuilding its presence elsewhere.
The exchange is re-entering the United Kingdom after a two-year pause, launching a platform that offers spot trading and peer-to-peer services.
The UK offering is structured through a promotional arrangement approved by Archax, rather than through direct UK registration.
Bybit has also strengthened its position in the Middle East.
Last month, it secured an operator license for virtual asset platforms from the UAE’s Securities and Commodities Authority, following an earlier in-principle approval granted eight months prior.
The license enables the exchange to expand services in a region positioning itself as a hub for digital-asset businesses.