A planned exit for the cryptocurrency exchange is due to FSA compliance concerns, but instead, markets in other countries like the UK and UAE also offer growth potential.
Duty Binding Company’s Withdrawal from Japan
The cryptocurrency exchange platform, Bybit, has announced its decision to withdraw its services from Japanese nationals starting 2026.
This is a result of the stringent regulatory environment in Japan, where the Financial Services Agency (FSA) is mandated to register all cryptocurrency exchange platforms before they can offer their services in the country.
However, bybit is an unregistered platform that has been under intense scrutiny by the regulator.
The FSA has also imposed regulations on unregistered platforms.
In February 2025, it requested that the apps of several unfit exchanges, such as Bybit, be taken down from the stores of both Apple and Google.
Indeed, it had previously sent warnings to Bybit and other unfit exchanges on matters of registration.
Bybit decided to suspend new registration of users from Japan effective October 31, 2025, as an interim measure towards full compliance.
Japan’s regulatory framework supports consumer protection and anti-money laundering practices, making it difficult for foreign exchange platforms to operate in this market.
The FSA’s policy stance has resulted in the review of their market operations by different exchange platforms.
In the case of Bybit, it seems that the cost exceeded the benefit of continuing to operate in Japan.
Bybit Redirects Its Focus to Compliant Markets
While Bybit is withdrawing from Japan, it is expanding into other countries that offer clearer regulatory conditions.
The exchange recently acquired a Full Virtual Asset Platform Operator License from the Virtual Asset Regulation Division of the Securities and Commodities Authority of the UAE on October 9, 2025, enabling regulated trading, brokerage, and custody activities.
The move was preceded by In-Principle approval earlier that year.
In the UK, Bybit resumed operations in late 2025 after a previous exit and now provides spot trading and peer-to-peer transactions in collaboration with domestic companies.
The re-entry corresponds with the UK’s developing regulation of the crypto market under the Financial Conduct Authority.
Impact on the Global Cryptographic Market
The Japanese withdrawal by Bybit reveals how regulatory matters are affecting the cryptocurrency market.
Trading platforms must now focus primarily on markets in which they can achieve full regulatory compliance.
Japan, for instance, may witness a shift in users from other platforms to others that are fully licensed.
This action also indicates a trend of how, due to government regulation, there are more obstacles for those that are not registered.
The fact that Bybit has shifted their operations to the UK and the UAE indicates their plan to develop in a sustainable manner, taking into consideration government regulations in their environment.
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