Bybit will gradually restrict accounts for its Japanese users starting in 2026 in a bid to comply with local regulatory requirements. Bybit has started notifying Japanese users that it will “discontinue services” and “gradually implement account restrictions” in an effort to comply with Japanese regulations, the exchange said in a December 22 announcement. “If you’re a resident of Japan, please note that starting from 2026, your account will be subject to gradual restrictions. You’ll receive additional updates on the remediation process in subsequent communications,” the announcement said. Bybit is one of the largest platforms in the cryptocurrency industry in terms of volume and has been operating in Japan for several years, despite not having obtained the necessary local registration or license. Starting in 2021, Japan’s Financial Services Agency began issuing repeated public warnings to Bybit and other platforms for operating an unregistered crypto exchange business, a violation of the country’s fund settlement laws. Over the next few years, the FSA continued to issue warnings to Bybit for non-compliance. Subsequently, in 2025, the regulator asked both Apple and Google to suspend the app store availability of five cryptocurrency exchanges, including Bybit, MEXC Global, LBank, Bitget, and KuCoin. In response, Bybit took a more measured approach and moved to demonstrate its intent to comply with Japanese regulations by voluntarily announcing plans to suspend new user registrations in Japan, as continued discussions with the FSA remained underway. Japan to work on crypto regulations Japan’s regulatory framework is considered one of the most stringent environments in the world when it comes to the crypto sector. Japanese regulators are expected to formally discuss a legislative overhaul in the upcoming 2026 parliamentary session to reclassify cryptocurrencies as “financial products.” That would bring crypto oversight more in line with traditional securities and improve investor protection and market integrity. As such, crypto-facing entities would be required to comply with more rigorous mandates that include obtaining a Type 1 Financial Instruments Business license. This comes with additional obligations like stringent security, capital, and risk management requirements. Other planned measures include enhanced disclosure requirements for listed tokens, insider trading bans, and mandatory emergency reserve funds to cover hacks or operational failures. Bybit reevaluates its global footprint Last year, Bybit scaled back its presence across Asia after it exited Hong Kong in May 2024, following regulatory scrutiny from the Securities and Futures Commission. Bybit was placed on the SFC’s list of suspicious platforms and flagged for operating without a license. In response to the regulatory pressure, Bybit affiliate Spark Fintech Limited formally withdrew its license application and suspended most services for local users by the end of May. Bybit has also exited several other markets such as the United States, mainland China, Singapore, Canada, and France, along with jurisdictions like Iran, North Korea, and Russian-controlled regions of Ukraine. However, in some jurisdictions, it has resumed or expanded operations after working toward compliance. For instance, Bybit is re-entering the UK market after a two-year absence by offering spot and peer-to-peer trading services under a promotions arrangement approved by Archax. Meanwhile, earlier this year, it also resumed full operations in India, where it had temporarily suspended services in January 2025 due to non-compliance. The company later became fully compliant after registering with the Financial Intelligence Unit and paying a penalty. The post Bybit begins phasing out services in Japan following FSA warnings appeared first on Invezz
