Bybit’s New Licensing Milestone Signals a Regulated Institutional Future for Crypto

Bybit just grabbed a golden ticket. The exchange secured a critical license from Dubai's Virtual Assets Regulatory Authority (VARA), a move that screams institutional ambition and regulatory compliance in one fell swoop.

Why This License Matters More Than Most

Forget basic operational permits—this is a full Virtual Asset Service Provider (VASP) license. It’s the kind of regulatory green light that lets Bybit offer a full suite of services to institutional clients and retail traders in a major financial hub. It’s not just about opening an office; it’s about building a fortress of legitimacy.

The Institutional On-Ramp Is Officially Open

This milestone isn't subtle. It's a direct signal to the big money—asset managers, hedge funds, family offices—that Bybit is playing by the rulebook. The exchange is constructing the very on-ramps these cautious giants demand: regulated custody, compliant trading pairs, and a framework that doesn’t keep their legal teams up at night. It’s a pivot from crypto's wild west roots toward a future where infrastructure matters as much as innovation.

A Blueprint for Survival in the New Crypto Era

Let's be real—the era of operating in regulatory gray areas is closing. Exchanges now face a simple choice: get licensed or get sidelined. Bybit’s Dubai play provides a clear blueprint. It shows how to engage proactively with regulators, adopt stringent compliance, and still build a competitive platform. Others will follow, or they'll watch their market share evaporate.

The move strategically positions Bybit in a nexus of global wealth and forward-looking regulation. It’s a long-game play for credibility in a sector still haunted by past collapses—a necessary step for any platform that wants to be a fixture, not just a flash in the pan. After all, in traditional finance, the most profitable businesses are usually the most boringly compliant ones. Crypto is finally learning that expensive lesson.

Zhou says Bybit saw an increase in institutional activity in Q4

At the Bybit Institutional Gala event in Dubai, Ben Zhou, Bybit’s co-founder and CEO, revealed a rise in institutional activity across the exchange. He said that the exchange recorded an increase in asset inflows from approximately $1.3 billion in Q3 to $2.88 billion in Q4. Zhou added that the assets under management also expanded from $40 million in Q3 to $200 million in Q4, reflecting a trend towards platforms that can demonstrate scale, governance, and transparent operations.

Source: Bybit; Ben Zhou, Bybit co-founder and CEO, delivering a keynote speech

Bybit CEO outlined how its retail infrastructure supports institutional adoption through several offerings, including card, payment, and fiat integrations in 13 regions. According to Zhou, the retail infrastructure contributes to a DEEP liquidity pool for professional traders. He acknowledged that Bybit has expanded its partnerships with financial institutions across Europe and the Middle East to strengthen its role as an execution venue for institutional clients.

Ben Zhou described the  Virtual Asset Platform Operator (VAPO) license as the foundation for the exchange’s compliance-focused strategy as they head into 2026. He reiterated that the VAPO regulatory framework provides institutional clients with a clear environment for participation, as well as supporting Bybit’s custody development, increasing liquidity, and improving infrastructure services.

Wang reports major upgrades in Bybit’s INS Credit Suite and MMGW

Yoyee Wang, Head of Business to Business at Bybit, added on Ben Zhou’s remarks by delivering two major institutional upgrades to the exchange’s ecosystem. Wang revealed an expanded INS Credit Suite and a redesigned Market Maker Gateway (MMGW) execution layer.

According to Wang, the upgraded Credit Suite will offer up to 5X leverage, TradFi-aligned loan-to-value parameters, and support for up to 1,000 sub-accounts. Wang revealed that demand for the INS Credit Suite program continues to grow, highlighting that the exchange recorded $1.1 billion in INS loans in the fourth quarter. According to Wang, the exchange’s INS loan represented a 26% quarter-over-quarter increase.

The head of Business to Business at Bybit outlined that the key component of the recent upgrade is the integration of custody-based real-world asset tokens into Bybit’s off-exchange credit ecosystem. According to Wang, the integration enables institutions to hold assets in custody, earn returns through tokenized money-market RWAs, and unlock credit. Wang described the integration as a combination of custody, yield, and credit deployment into one operational workflow.

Bybit’s execution infrastructure, MMGW environment, was also redesigned to feature a reduced round-trip latency for institutional clients from 30 milliseconds to just 5 milliseconds. Wang also revealed that a 2.5 millisecond execution is underway, scheduled for release in 2026. She noted that the upgrades will improve consistency, stability, and predictability for market-making institutions. According to her, the credit and execution upgrades FORM part of the exchange’s plans to provide integrated institutional services combining custody, credit access, execution performance, and governance standards.