Digital Assets Exchange Bybit Suspends Services in the UK
Bybit, a digital assets exchange, has announced that it will no longer accept new account applications from UK residents starting October 1. This decision comes in response to new marketing rules introduced by the UK’s Financial Conduct Authority (FCA), which will take effect from October 8. The FCA’s rules include a ban on incentives like referral bonuses for all crypto promotions.
To comply with the FCA’s guidelines, Bybit will suspend its services in the UK market from October 8. Existing UK users will not be able to make new deposits, create new contracts, or increase existing positions for any products and services. By January 8, 2024, UK customers are encouraged to wind down their positions, as open positions will be liquidated after the deadline.
The FCA’s scrutiny of crypto businesses and implementation of new marketing rules is seen as fair and honest by Lucy Castledine, Director of Consumer Investments at the FCA. The move aligns with global regulators’ increasing concern over the failure of crypto businesses and their efforts to tighten regulations on crypto firms.
Bybit has stated that it will continue to expand in global markets while ensuring necessary regulatory compliance.
FCA’s “Final Warning”
Bybit’s decision to exit the UK market follows a “final warning” issued by the FCA to crypto businesses regarding upcoming financial promotions regulations. In a letter dated September 21, the regulator emphasized that all firms promoting cryptoassets to UK consumers must prepare for this regime.
The new regime aims to protect consumers by ensuring that they invest in cryptoassets that align with their risk appetite. It also seeks to create a fairer and more consumer-focused landscape for firms to compete and innovate. The FCA noted that many overseas crypto asset firms have refused to engage with them due to the regulatory tightening, with only 24 out of 150 firms responding to a survey.
“If unregistered cryptoasset firms continue to promote cryptoassets to UK consumers once the regime enters into force, they are likely to be in breach of section 21 of the Financial Services and Markets Act 2000 (FSMA). This would be a criminal offense punishable by up to 2 years imprisonment, an unlimited fine, or both.”
The FCA also warned intermediaries such as social media platforms, search engines, app stores, and payment firms to prevent unregistered crypto businesses from engaging in illegal marketing activities targeting UK users.
Hot Take: Bybit Complies with FCA Regulations, Exits UK Market
Bybit’s decision to suspend its services in the UK market reflects its proactive approach to embrace regulatory compliance. The company’s move aligns with the FCA’s efforts to protect consumers and create a fairer crypto landscape. With the new marketing rules coming into effect, Bybit prioritizes adhering to guidelines set by the FCA.
While this development may disappoint UK residents who were using Bybit’s services, it underscores the importance of regulatory compliance for crypto businesses. Bybit aims to continue its growth in global markets while providing traders with secure and innovative trading experiences.
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