Bybit Halts Japan Signups as Regulators Tighten the Screws

Bybit, one of the world’s largest cryptocurrency platforms, will stop taking on new users in Japan from the end of October, marking the latest flashpoint in the country’s long-running campaign to bring offshore crypto firms under local control.

The platform said it will cease onboarding Japanese residents and nationals at 12:00 UTC on October 31. Existing customers can keep using their accounts for now, but the move ends years of unsimple coexistence with Japan’s Financial Services Agency (FSA), which has twice warned Bybit for operating without a license — first in 2021 and again in 2023.

The decision comes as Tokyo prepares another tightening of its already dense rulebook. Japan built one of the world’s most comprehensive digital-asset regimes later than the collapses of Mt. Gox and Coincheck. A 2016 amendment to the Payment Services Act forced platforms to register, verify customers and segregate assets; 2019 revisions extended securities-law derivatives and curbed marketing; and a 2022 overhaul brought the global “travel rule” for tracing transfers into domestic law.

Now, in 2025, regulators are pushing further. A recent FSA discussion paper outlines plans to require platforms to retain customer assets onshore for quicker recovery in the event of failure and to explore insider-trading rules for tokens. Local reports suggest the agency may soon classify cryptocurrencies as financial products, bringing them under the stricter .

For a company repeatedly cited for unregistered activity, the cleanest path is to pause new accounts while working toward compliance. “If you’ve had public warnings, you stop the inflow and rebuild under supervision,” said a Tokyo-based legal adviser familiar with crypto licensing.

Bybit, founded in 2018 and based in Dubai, routinely ranks among the top global platforms by derivatives volume. But its rapid rise has drawn scrutiny far beyond Japan. It suspended UK operations last year ahead of the Financial Conduct Authority’s marketing-rule rollout, shut services in it, and reached a 2022 settlement with Ontario regulators that barred new Canadian users.

Those run-ins coincided with growing operational risk. In February 2025, Bybit suffered one of crypto’s largest thefts — an estimated $1 — and pledged to compensate affected clients. The episode has reinforced regulators’ insistence on cold-wallet custody and tight limits on hot-wallet exposure, principles that Japan embedded in law years earlier.

Within Japan, the enforcement structure is multilayered. The FSA overviews licensing and supervision; the Japan Virtual and Association (JVCEA), a self-regulatory body approved by the FSA in 2018, writes detailed operational standards, from the travel-rule implementation to token-listing protocols. platforms that fail to join or comply with the JVCEA have little hope of accessing Japanese customers.

Local regulators’ focus has also shifted toward market conduct. The FSA’s 2025 paper raised the prospect of treating token trading like conventional securities dealing, including restrictions on insider use of material information. That mirrors a global trend as major economies — from the US to the EU — viewk to fold crypto under existing financial-market laws rather than build bespoke regimes.

For Bybit users in Japan, nothing changes immediately. But the pattern elsewhere is clear: when the company left the UK and France, withdrawal-only phases preceded full closures. Unless it secures a license or partners with a registered domestic platform, Japanese customers may face a similar path.

Licensed local platforms such as bitFlyer, GMO Coin and Coincheck are likely to benefit from the shift, capturing new-account demand under Japan’s tightly controlled custody and AML framework. They already operate under travel-rule tracking and cold-wallet custody thresholds far more rigid than most offshore venues.

Bybit’s pause is less about retreat than recalibration. Japan’s new agenda — onshore asset retention, insider-trading oversight, and stricter marketing limits — raises the bar for any global platform viewking access to its investors. The country’s regulators have made clear they expect foreign platforms to play by domestic rules, not skirt them from abroad.

The platform’s move, then, fits a familiar pattern: when the watchdogs get louder, Bybit steps back, rewires, and waits for a clearer path. Whether that path leads to registration, partnership, or a permanent exit from the Japanese market will depend on how rapidly it can match Tokyo’s exacting standards — and how far Japan goes in redefining what a “compliant” crypto platform really means.