Troubles with New Marketing Rules
Crypto exchange Bybit expects to cease operations in the United Kingdom due to new marketing regulations set to take effect. According to Bybit’s CEO, Ben Zhou, the strict regulations make it difficult for the exchange to continue operating within the country. The Financial Conduct Authority (FCA) has contacted Bybit and other exchanges like Binance and OKX to assess their compliance with the new law, which restricts how crypto firms can serve UK citizens.
Until October 8, crypto firms can still use reverse solicitation to serve UK clients, but after that, compliance becomes more challenging.
“The new law states that if you use English as a language, they will see you as trying to solicit their users, so you cannot claim that you are in reverse solicitation,” Zhou explained. “Everyone is in trouble. So everyone is thinking of plans for how to deal with this new law.”
The law also requires approval for any promotions of crypto companies and prohibits inappropriate incentives for investment. Non-compliance may result in fines or imprisonment.
United Kingdom versus United States
The United Kingdom has established crypto and stablecoins as regulated financial activities under the Financial Services and Markets Bill. However, the strict regulations in the UK may deter US-based crypto firms seeking refuge from their own regulatory challenges. Coinbase CEO Brian Armstrong has suggested considering a move to the UK if legal clarity on crypto is not achieved in the US. The Securities and Exchange Commission (SEC) has already filed lawsuits against firms like Coinbase, Kraken, and Binance for violating securities laws.
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