Bybit exits UK market ahead of regulatory changes
Bybit is suspending its cryptocurrency services for users in the United Kingdom due to impending regulations from the country’s Financial Conduct Authority (FCA).
Starting on October 1, Bybit will cease accepting new account applications from UK residents. On October 8, it will further suspend new deposits, new contracts, and changes to positions for existing users in the UK.
UK customers affected by these changes are advised to take the necessary action by January 8, 2024, at 8 AM UTC to handle and close their positions. After this deadline, any remaining open positions will be liquidated, and the resulting funds will be accessible for withdrawal.
The Dubai-based cryptocurrency exchange added in a statement “In light of the UK Financial Conduct Authority’s introduction of new rules regarding marketing and communications by crypto businesses as outlined in the June 2023 Policy Statement (PS23/6) entitled “Financial Promotion Rules for Crypto assets,” Bybit has made a choice to embrace the regulation proactively and pause our services in this market. The suspension will allow the company to focus its efforts and resources being able to best meet the regulations outlined by the UK authorities in the future.”
The move comes barely a week after Bybit said it was actively exploring options to continue operating in the U.K. despite impending changes in financial promotions rules that are set to come into effect next month. Bybit’s CEO, Ben Zhou, stated that the exchange is in discussions with regulators to determine the most suitable approach going forward.
These new regulations will extend to crypto companies and impact their ability to engage with local customers, requiring them to be registered or authorized by the Financial Conduct Authority when reaching out to U.K. clients. Some firms, like Luno and PayPal, have already adjusted their crypto operations in response to these changes.
Earlier in June, the UK introduced new advertising rules for firms marketing crypto assets to consumers. Citing concern over investor protection, the FCA watchdog suggests that customers should take a brief period to educate themselves further about the risks involved.
Under the new rules, the financial watchdog introduced a 24-hour “cooling-off” period specifically for first-time investors. This pause allows investors to take a step back and reconsider their decision before proceeding with this type of risky investment. Additionally, the practice of offering ‘refer a friend’ bonuses will be prohibited.
The new regulations also require firms promoting crypto products or services to include a clear risk warning in their promotions and verify that individuals have the necessary knowledge and experience to invest in cryptocurrencies.