Bybit plans to gradually exit Japan as crypto regulations tighten.

Bybit, a prominent cryptocurrency exchange, plans to gradually reduce services for its Japanese users starting in 2026, responding to ongoing regulatory pressures in one of the world’s most tightly controlled digital asset markets. This decision follows several months of heightened scrutiny and previous measures aimed at scaling back its operations in Japan.

Regulatory Pressures in Japan

The phased restrictions will specifically apply to users identified as residents of Japan. Bybit will implement these measures progressively over time to comply with the Japanese regulatory framework.

Users who believe they have been incorrectly classified are encouraged to undergo additional identity verification to clarify their status.

Bybit operates without registration with the Financial Services Agency (FSA), which mandates that cryptocurrency platforms servicing Japanese residents require local approval before offering services. The Japanese regulatory landscape is known for its strictness, shaped by past exchange failures and consumer protection concerns.

This regulatory environment has severely limited the ability of foreign platforms to operate freely in Japan without a local license. Bybit’s decision to initiate a structured withdrawal from the Japanese market by 2026 reflects the increasing challenges faced by unregistered exchanges in maintaining access to Japanese users.

Previous Restrictions in Japan

This latest announcement builds on Bybit’s earlier efforts to minimize its exposure to the Japanese market. In October, the exchange suspended new user registrations from Japan, citing ongoing discussions with regulators.

This move indicated that maintaining full operations without registration was becoming increasingly untenable. Regulatory oversight intensified in February when Japan’s Financial Services Agency requested application stores managed by Apple and Google to halt downloads of five unregistered cryptocurrency platforms.

Alongside Bybit, the list included MEXC Global, LBank Exchange, KuCoin, and Bitget, reinforcing Japan’s stance that access to local users must be tightly regulated.

Industry figures have warned that this regulatory bottleneck is driving innovation elsewhere. In July, WeFi co-founder and CEO Maksym Sakharov indicated that Japan’s stringent oversight was pushing crypto development out of the country as firms seek more flexible jurisdictions.

Despite its retreat from Japan, Bybit remains one of the most active cryptocurrency exchanges in the world. Rather than completely exiting heavily regulated markets, Bybit has increasingly adopted jurisdiction-specific strategies, limiting certain services while expanding in regions with more transparent or accommodating frameworks.

Expansion Beyond Japan

As it scales back operations in Japan, Bybit is simultaneously rebuilding its presence in other markets. The exchange is re-entering the UK after a two-year hiatus, launching a platform that offers both spot and peer-to-peer trading services.

This UK launch is structured under a promotional agreement approved by Archax, rather than through direct registration in the UK.

Bybit has also strengthened its foothold in the Middle East, securing a virtual asset platform operator license from the UAE’s Securities and Commodities Authority last month, just eight months after obtaining its initial approval.

This license permits the platform to expand its services in a region actively positioning itself as a hub for digital asset companies.