Bybit begins Japan exit as regulatory pressure intensifies
Bybit said it will begin phasing out services for residents of Japan starting in 2026 as it moves to align with the country’s regulatory framework.
Accounts identified as belonging to Japanese residents will face gradual restrictions introduced on a rolling basis, reports Cointelegraph.
Users who believe they were incorrectly flagged have been asked to complete additional identity verification checks. Bybit is not registered with Japan’s Financial Services Agency (FSA), which requires local authorization for any exchange serving Japanese customers. The exchange said affected users will receive further guidance as the remediation process unfolds. The decision underscores the challenges global crypto platforms face operating in tightly regulated jurisdictions. Despite the move, Bybit remains one of the world’s largest exchanges by trading volume.
Regulatory pressure intensifies in Japan
Japan enforces one of the strictest crypto regulatory regimes globally, prioritizing consumer protection and oversight. In October, Bybit had already paused new user registrations in Japan, citing ongoing discussions with the FSA. Regulatory pressure escalated further in February when the FSA requested Apple and Google to remove several unregistered crypto exchanges from their app stores. Bybit was among the platforms named alongside MEXC Global, LBank, KuCoin and Bitget.
These actions signal Japan’s continued unwillingness to tolerate unlicensed offshore exchanges serving local users. Industry executives have warned that the regulatory bottleneck risks pushing crypto innovation outside the country. Still, Japanese authorities remain firm on enforcing compliance.
Impact on Bybit and the broader market
Bybit’s exit from Japan highlights the trade-off between regulatory compliance and market access for global exchanges. The platform often ranks as the second-largest crypto exchange worldwide by daily trading volume, processing more than $4 billion in trades over 24 hours. While Japan represents a sophisticated market, compliance costs and licensing hurdles have proven difficult for offshore operators. The phased approach allows Bybit to reduce exposure without an abrupt service cutoff, potentially limiting user disruption.
However, the move could redirect Japanese traders toward domestically licensed platforms. More broadly, it reinforces a trend of regulatory fragmentation shaping where and how crypto exchanges operate globally.
Recently we wrote that Metaplanet approved a sweeping overhaul of its capital structure, giving Japan’s largest corporate Bitcoin holder new tools to raise funds through dividend-paying preferred shares.
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