Bybit Announces Phased Restrictions for Japanese Residents Starting 2026

Bybit draws a line in the sand for its Japanese user base. The exchange confirms a multi-stage exit strategy, with full restrictions taking effect in 2026.

Navigating the Regulatory Maze

This move isn't happening in a vacuum. It's a direct response to Japan's tightening financial regulations, spearheaded by the Financial Services Agency (FSA). The phased approach suggests Bybit is buying time—for users to adjust and for itself to potentially explore compliance pathways, though that door seems to be closing.

The Global Exchange Shuffle

For traders in Japan, it's another reminder that in crypto, geography is destiny. Your access to global liquidity pools can be revoked with a regulatory pen stroke, forcing a scramble to local, often less liquid, alternatives. It's the classic finance playbook: build walls first, ask questions later—usually about fees.

Bybit's calculated retreat from Japan underscores a brutal truth for the industry: global ambition constantly slams into national rulebooks. For now, the platform is following the oldest rule in finance: when the regulator speaks, you listen.

Japan has increased scrutiny over crypto assets and operations

Bybit has been pulling back from the Japanese market in recent months. The exchange stated in October that it would stop accepting new users while in talks with the FSA. In February, Japan’s Financial Services Agency also urged Apple and Google to remove download access for five crypto exchanges operating without registration, including Bybit and MEXC Global. Now, with the phased restrictions, the exchange is further limiting its exposure in the country. 

Globally, the Asian nation is considered one of the most rigorous crypto regulatory regimes, which, according to analysts and key players like WeFi co-founder and CEO Maksym Sakharov, will stifle innovation. In October, Nikkei Asia had even reported that Japan’s financial authorities were planning to ban insider trading in the cryptocurrency market explicitly.

According to the report, the Securities and Exchange Surveillance Commission (SESC) would be required to investigate questionable crypto trades and impose fines based on illegal gains, with the most serious cases referred for criminal proceedings. 

The Financial Instruments and Exchange Act WOULD also need to be updated, as it currently excludes cryptocurrencies from insider-trading provisions. Additionally, the FSA would need to establish a working group by the end of 2025 and submit legislative proposals in 2026.

Earlier this year, the agency had also published a discussion paper examining crypto regulations, which suggested that future rules could cover insider trading in crypto transactions. Previous reporting indicates that the agency intended to classify cryptoassets under the FIEA, thereby subjecting them to existing securities laws.

Bybit is re-entering the UK market after two years

Meanwhile, Bybit is also staging a return to the UK following a two-year hiatus, introducing a new platform for spot and peer-to-peer trading that runs under a promotions arrangement approved by London-based crypto exchange Archax. 

Archax holds a special regulatory permit enabling it to approve financial promotions, effectively allowing firms without direct UK authorization to operate through its platform. So far, the platform has enabled both Coinbase and OKX to operate in the UK without having direct authorisation.

Mykolas Majauskas, senior director of policy at Bybit, commented on the company’s return to the UK, saying, “ In the months ahead, we aim to embody this innovative spirit by introducing new products tailored to the needs of UK users, always within a framework that prioritises transparency and compliance.”

The exchange also received its VIRTUAL Asset Platform Operator License from the UAE’s Securities and Commodities Authority last month, building on the in-principle approval it had received eight months prior. The platform is still commonly listed as the world’s second-largest by trading volume, processing approximately $4.3 billion in transactions in just the last 24 hours, according to CoinGecko.

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