- From October 31, 2025, Bybit will stop accepting new user registrations from within Japan.
- Japan’s Financial Services Agency (FSA) is preparing to reclassify crypto assets as financial instruments.
- Japan is also considering permitting banks to hold and trade cryptocurrencies.
Bybit, the world’s second-largest cryptocurrency exchange by trading volume, will suspend new user onboarding in Japan beginning October 31, 2025.
The move comes as Japan’s Financial Services Agency is preparing stricter rules that could reclassify crypto assets as regulated financial instruments.
Bybit described the suspension as a proactive step to align its operations with the evolving legal and regulatory framework in Japan.
As of 12:00 UTC on October 31, Bybit will no longer accept new account registrations from residents and nationals of Japan.
Existing users, however, will retain full access to all services for the time being.
In a statement, Bybit said it remains committed to operating “responsibly and in accordance with the expectations of local laws and regulations.”
The exchange added that the pause will allow it to review local requirements and determine how best to meet the new standards the FSA is drafting.
The announcement arrives amid heightened scrutiny of global exchanges by Japanese regulators, who are intensifying oversight to protect investors and ensure transparency.
FSA Prepares Major Cryptocurrency Overhaul
Japan’s Financial Services Agency is preparing sweeping changes that could reshape how cryptocurrencies are regulated domestically.
The Japanese crypto market has grown rapidly and, as of early 2025, counts more than 12 million registered accounts.
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 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 is now planning to amend the Financial Instruments and Exchange Act (FIEA) in 2026 to reclassify crypto assets from “means of payment” to “financial instruments.”
This change would strengthen regulators’ authority to investigate and penalize insider trading and market manipulation within crypto markets.
A working group within the FSA is also drafting Japan’s first legal definition of insider trading as it applies to crypto, which could soon make such behavior explicitly punishable.
These measures represent a decisive step toward aligning crypto oversight with the regulatory regime applied to traditional securities markets.
At the same time, the FSA is considering allowing banks to hold cryptocurrencies such as Bitcoin for investment purposes.
If approved, the 2020 restrictions would be lifted and banks could participate in crypto trading and custody services under strict risk and capital requirements.
A Challenging Year for Bybit
Bybit’s decision to pause new registrations in Japan follows one of the most turbulent years in the company’s history.
In February 2025, the exchange suffered one of the largest hacks in industry history — a breach reported at approximately $1.5 billion and allegedly linked to North Korea’s Lazarus Group.
Following the incident, Bybit stepped up its compliance efforts, implemented monthly Proof of Reserves reports to reassure users and regulators, and expanded third-party audits.
Independent auditor Hacken later confirmed that Bybit maintained a solvency ratio above 100% after the incident, helping to ease customer concerns.
The exchange’s increased transparency and cooperation with regulators reflect broader expectations in Japan for cryptocurrency firms.
Bybit’s approach emphasizes accountability, financial soundness, and investor protection—principles that align with the FSA’s regulatory priorities.