Dubai-headquartered Bybit announced on Friday, September 22, that it is terminating services to UK residents. The crypto exchange clarified that it would suspend the services starting in October, citing the regulatory changes.
The crypto exchange indicated that suspending service provision in the UK is inevitable, citing that the pending rules are prohibitive. The crypto exchange of Dubai origin indirectly cited the pending rules that the UK regulator, the Financial Conduct Authority (FCA), has devoted to enforcing.
Bybit Embraces Phased Exit From UK Market
The Friday announcement indicated that Bybit would terminate the application of new accounts by October 1. The crypto exchange is projected to suspend the receipt of new deposits. Also, Bybit is considering suspending new contracts by October 8, when it intends to alter the positions of the existing users.
The firm admitted that introducing new promotional rules is altering the marketing and communications made by crypto businesses. The firm confirmed its decision to proactively embrace the upcoming regulation and pause services in the UK market.
The date Bybit announced to wound down services provision coincides with the October 8 deadline announced for all crypto asset firms to comply with the promotion rules. FCA directs all firms marketing to the UK and should guarantee clarity, fairness, and not misleading market approach.
FCA Underscores Strict Enforcement of Promotional Rules
The FCA issued a final warning lamenting that only two dozen crypto firms responded to the inquiry from a possible list extending beyond 150. In a subsequent reminder from the June statement, the financial regulator issued a final warning on Thursday, September 21. In particular, it reminded the firms of the October 8 deadline and that they risked criminal charges for the non-compliant operators.
Bybit considers the pause as necessary to enable the company to allocate resources and efforts toward complying with the new regulations issued by the UK authorities. FCA has indicated that it would take certain firms until the end of 2023 to comply with the new marketing rules. However, it would require prior approval from the FCA.
ByBit Sustain Expanding Global Footprint
The approach adopted by Bybit mirrors the May 2023 approach adopted to wind down services in Canada. The crypto exchange firm cited the regulatory development enforced by the Canadian regulator.
The exit from Canada hardly slowed Bybit’s quest for new markets. Instead, Bybit announced the expansion in Kazakhstan. The May expansion arose from Bybit’s securing principle approval to offer crypto custody services.
Bybit would, in a month, announce entry into Cyprus in a move considered a strategic expansion of its global footprint of custody services into Europe. The license secured in June would enable Bybit to offer crypto exchange in the Cyprus and European Union markets.
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