Bybit, the second-largest cryptocurrency exchange globally by trading volume, has announced a suspension on new user sign-ups in Japan effective October 31. This decision is in response to new regulations proposed by Japan’s Financial Services Agency (FSA).
The exchange stated this strategy reflects their “proactive approach” towards adapting to Japan’s evolving regulatory landscape for digital currencies, as per a recent announcement.
“It has always been Bybit’s commitment to operate responsibly and in compliance with local laws and regulatory expectations.”
Existing users in Japan will not face any immediate impacts, with all current services still available. The exchange plans to provide updates as discussions with regulators develop.
Japan’s FSA Considers Allowing Banks to Hold Bitcoin
Last week, it was reported that the FSA is contemplating modifications to regulations that would allow banks to hold cryptocurrencies like Bitcoin and run licensed exchanges.
The proposal will undergo evaluation at an upcoming Financial Services Council meeting, aimed at integrating digital assets with traditional financial instruments such as stocks and government bonds.
The FSA is expected to create a framework to address potential risks associated with cryptocurrency volatility, which may require banks to satisfy new capital and risk-management standards before handling digital assets. This shift could pave the way for enhanced institutional adoption within Japan’s regulated banking environment.
Cointelegraph reached out to Bybit for insights but had not received a response prior to publication.
Japan’s Regulatory Environment and its Impact on Crypto
In July, Maksym Sakharov, the co-founder and CEO of decentralized bank WeFi, expressed to Cointelegraph that Japan’s regulatory challenges, rather than taxation, are the main factors driving crypto innovation away from the country. He remarked that even if a proposed 20% flat tax on crypto profits is enacted, Japan’s slow and risk-averse regulatory approvals will continue to drive startups and liquidity away.
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