In response to regulatory changes in the United Kingdom, cryptocurrency exchange Bybit has announced its decision to suspend operations in the country. This move comes just a week after the company stated it was exploring all possible options to continue operating within the U.K. market. Starting October 1, new customers will no longer be able to open accounts with Bybit. Subsequently, from October 8 onwards, existing customers will face restrictions.
Bybit to place restrictions on old customers by October 8
Bybit also noted that old customers won’t be allowed to add funds, create new contracts, or increase their positions on the platform. However, they will retain the ability to reduce and close their positions and withdraw their funds from the platform, as outlined in an official statement on Bybit’s website. The significance of October 8 lies in the fact that it marks the deadline for firms to comply with U.K. rules governing advertising and promotions related to cryptocurrencies. These rules require crypto businesses to be registered with the Financial Conduct Authority (FCA) to gain approval for their advertisements and communications.
Notably, Bybit is not included in the FCA’s crypto register, leading to its decision to suspend operations in the U.K. Bybit’s action is not isolated, as other crypto firms have also responded to the new regulatory landscape in the U.K. In the previous month, payments giant PayPal announced its temporary suspension of crypto services in the country until the following year. Similarly, Luno, owned by CoinDesk’s parent company, Digital Currency Group, has taken steps to prevent some U.K. clients from making further investments through its exchange.
Impact of the UK regulations on exchanges and investors
The decision to suspend operations in the U.K. was framed by Bybit as a proactive response to the Financial Conduct Authority’s introduction of new rules regarding marketing and communications by crypto businesses. These rules, outlined in the June 2023 Policy Statement (PS23/6) titled ‘Financial Promotion Rules for Crypto assets,’ have prompted Bybit to embrace regulation and temporarily halt its services in the U.K. The move underscores the growing influence of regulatory bodies in the cryptocurrency industry as governments around the world seek to establish clearer frameworks for crypto-related activities.
The U.K.’s regulatory changes have forced crypto businesses operating in the country to either comply with the new rules or cease their operations. Bybit’s decision is expected to impact its user base in the U.K., particularly those who have been actively using the platform for trading and investment purposes. Existing customers will need to adjust to the limitations imposed on their accounts, while new customers seeking to enter the crypto market through Bybit will no longer have that option. The suspension of operations also highlights the challenges faced by cryptocurrency exchanges and service providers in navigating the evolving regulatory landscape.
As governments introduce new guidelines and requirements, businesses operating in the crypto sector must adapt to remain compliant and continue to serve their customers. Looking ahead, Bybit’s response to U.K. regulations serves as a reminder of the need for regulatory clarity in the cryptocurrency industry. Clear and well-defined regulations can provide businesses with a stable operating environment while offering protection to consumers. The evolving regulatory landscape will continue to shape the industry’s future, impacting both established players and newcomers seeking to participate in the crypto market.