Bybit Decides to Exit UK Market in Response to Regulatory Shifts
Crypto exchange Bybit plans to exit the United Kingdom market due to upcoming harsh and unenforceable regulations.
Crypto exchange Bybit has revealed its intention to withdraw from the UK market, coinciding with the Financial Conduct Authority’s (FCA) impending enforcement of enhanced marketing regulations. These regulations are slated to become effective on October 8 and are designed to enhance transparency and accuracy in the marketing of crypto products. Among the new rules is the introduction of a “cooling-off” period for new investors.
Ben Zhou, Bybit’s co-founder and CEO, indicated that the tightening regulatory environment is pushing the company to reduce its presence in various countries. He said that Bybit also recently withdrew from the French market.
The Implications of New Solicitation Rules
The upcoming FCA regulations are set to reshape how crypto exchanges interact with potential customers. Despite the UK’s ban on crypto derivatives since 2021, exchanges like Bybit have continued to cater to UK customers through a method known as “reverse solicitation.”
However, the viability of this workaround may diminish once the new rules take effect. Bybit’s Zhou mentioned that the FCA has been in touch with major players, including Bybit, OKX, and Binance, inquiring about their compliance plans regarding the updated law. Notably, the new law brings a significant shift: if marketing materials are presented in English, regulators may interpret this as active solicitation.
This alteration could effectively render the use of “reverse solicitation” as a strategy to serve UK customers obsolete.
Which #crypto project should we list next on our exchange?— Bybit (@Bybit_Official) September 14, 2023
Bybit’s Position in the Crypto Market
Founded in 2018 with a focus on derivatives, Bybit has expanded its services to encompass spot trading and more. The exchange currently commands a substantial 23% market share in open interest for Bitcoin futures.
In light of this significant market presence, Bybit’s decision to withdraw from the UK market highlights the mounting tension between crypto exchanges and regulatory authorities.
Bybit’s impending departure from the UK raises questions about how other crypto exchanges will navigate the increasingly strict regulatory landscape. Will other exchanges follow suit in scaling back their geographical operations, or will they seek to adapt to the new regulations?
These developments may serve as a pivotal moment for the crypto industry’s relationship with global regulatory frameworks.
Any data, text, or other content on this page is provided as general market information and not as investment advice. Past performance is not necessarily an indicator of future results.
The Trust Project is a worldwide group of news organizations working to establish transparency standards.