Bybit to Exit UK Ahead of New Marketing Rules
Bybit, one of the largest crypto exchange operators globally, is preparing to withdraw from the United Kingdom due to upcoming marketing regulations. Ben Zhou, CEO of Bybit, acknowledged that regulatory measures are becoming stricter, leading them to consider retreating from several countries. Bybit recently exited France and anticipates doing the same in the UK soon.
New Rules Enforced by Financial Conduct Authority
The Financial Conduct Authority (FCA) will enforce new rules on October 8th that aim to enhance transparency and accuracy in the marketing of crypto products. These regulations include a cooling-off period for first-time investors. Although crypto derivative products have been banned in the UK since 2021, some exchanges have been able to serve UK customers through reverse solicitation. However, this may change once the new rules come into effect.
Implications for Bybit and Other Exchanges
Zhou stated that the FCA has contacted major players in the industry, including Bybit, OKX, and Binance, to inquire about their plans regarding compliance with the new law. According to Zhou, if English is used as a language for communication, it will be seen as an attempt to solicit users and reverse solicitation cannot be claimed. This puts all exchanges in a difficult position, prompting them to devise strategies for dealing with the new law. For Bybit, it is likely that they will sever ties with the UK entirely.
A Broad Regulatory Regime
George Morris from Simmons & Simmons highlighted that while promotion regulations have long been in place for securities firms, they are now expanding to cover crypto firms as well. The rules are complex and extensive, with even having a website accessible to UK customers potentially being considered as promotion. These requirements apply not only to UK firms but also to any entity with a website accessible in the UK.
Bybit’s Position in the Market
Bybit, founded in 2018 as a derivatives-focused exchange, has diversified its product offerings in recent years, including spot trading. However, derivatives remain a core aspect of the company. Currently, Bybit holds approximately 23% of open interest across bitcoin futures, according to data from The Block Research.
Hot Take: Bybit Prepares to Exit UK Due to Stricter Regulations
Bybit, one of the leading crypto exchanges globally, is making plans to withdraw from the United Kingdom as new marketing regulations approach. The Financial Conduct Authority will enforce rules on October 8th that aim to enhance transparency and accuracy in the promotion of crypto products. Bybit’s CEO, Ben Zhou, stated that these regulations will change how solicitation works and could potentially eliminate the use of reverse solicitation for serving UK customers. As a result, Bybit is likely to sever ties with the UK entirely. This move reflects the broader trend of increasing regulatory scrutiny and highlights the challenges faced by crypto exchanges operating within evolving regulatory frameworks.
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