- Bybit will gradually scale back services for Japanese users beginning in 2026 amid ongoing regulatory pressure.
- Japan’s strict licensing rules force unregistered crypto exchanges to limit or leave the market.
- While Bybit withdraws from Japan, it is expanding in the United Kingdom and the Middle East under clearer regulatory frameworks.
Bybit is preparing to gradually reduce services for users located in Japan starting in 2026, marking another shift in how global cryptocurrency exchanges navigate one of the world’s most tightly regulated digital asset markets.
This decision follows months of regulatory scrutiny and earlier steps by the exchange to reduce its footprint in the country.
Bybit said the process will involve rolling account restrictions applied over time rather than an immediate shutdown, aligning its operations with Japan’s regulatory framework.
The move highlights the uneven global regulatory landscape for crypto platforms, as the exchange pursues growth in regions with clearer or more accessible rules.
Regulatory pressure in Japan
The phased limitations will apply to users identified as Japanese residents, with Bybit implementing measures on an ongoing basis.
Users who believe they have been incorrectly identified have been asked to complete additional identity verification 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 is widely regarded as one of the strictest globally, shaped by past exchange failures and a strong focus on consumer protection.
These rules limit the ability of foreign platforms to operate freely in the country without local licensing.
Bybit’s decision to begin a structured withdrawal in 2026 reflects the growing difficulty for unregistered foreign exchanges to maintain access to Japanese users.
Earlier restrictions in Japan
The latest announcement builds on earlier actions Bybit took to limit its exposure to the Japanese market.
In October the exchange stopped registering new users in Japan, citing ongoing discussions with regulators.
That move signaled that continuing full operations without registration was becoming increasingly untenable.
Regulatory scrutiny intensified in February when Japan’s Financial Services Agency asked app stores operated 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 request reinforced Japan’s position that access to local users must be tightly controlled.
Industry participants have warned that this regulatory bottleneck is encouraging innovation to migrate elsewhere.
In July, Maksym Sakharov, co-founder and CEO of WeFi, said Japan’s strict oversight is pushing crypto development out of the country as companies look for more flexible jurisdictions.
Despite scaling back in Japan, Bybit remains one of the most active exchanges globally.
Rather than fully exiting heavily regulated markets, Bybit has increasingly adopted jurisdiction-specific strategies, restricting certain services while expanding in regions with clearer or more accommodating frameworks.
Expansion beyond Japan
As it winds down in Japan, Bybit is simultaneously building presence in other markets.
The exchange is returning to 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 scheme approved by Archax rather than via direct UK registration.
Bybit has also strengthened its position in the Middle East.
Last month it received a Virtual Asset Platform Operator License from the Securities and Commodities Authority of the United Arab Emirates, following principal approval eight months earlier.
The license allows the exchange to expand services in a region actively positioning itself as a hub for digital asset businesses.