Bybit will phase out services for Japan-based users as part of an effort to align more closely with the country’s tightening digital asset regulations. The move is a reaction to Japan’s increasingly strict stance on overseas exchanges and highlights the growing pressure on global platforms to localize operations in highly regulated markets.
Bybit Winds Down Services to Japan-Based Users
Bybit plans to implement the phase-out in stages, rather than abruptly cutting off access, giving existing users time to adjust their positions and withdraw funds.
The exchange intends to limit new registrations from Japan, restrict certain products, and then progressively narrow trading functionality for accounts that register with Japanese residency or IP information.
Users in Japan can expect clear in-app notifications and email alerts outlining key deadlines for closing positions and transferring assets to external wallets or locally approved platforms.
The exchange aims to avoid forced liquidations by providing reasonable notice periods and guidance on how to exit leveraged or complex positions before restrictions fully take effect.
Regulatory Pressure and Strategic Compliance
Japan’s Financial Services Agency (FSA) maintains one of the world’s most demanding registration and oversight regimes for crypto asset exchanges. Platforms that serve Japanese residents must register locally, meet capital and security standards, and adhere to strict rules on token listings, advertising, and customer protection. Authorities have repeatedly warned that unregistered foreign exchanges that target Japanese users risk enforcement action.
Bybit’s decision to pull back from Japan signals a strategic choice to prioritize regulatory compliance over short-term market share. The exchange mitigates legal and reputational risk by stepping out of a jurisdiction where it lacks full licensing, despite Japan remaining a significant market for digital asset trading.
The move also aligns with a broader industry pattern in which major platforms either fully localize, through licensing and joint ventures, or retreat from markets with intensive regulatory oversight.
Japan-based traders will likely shift activity to domestically licensed exchanges or global platforms that already maintain local registrations. The transition may temporarily reduce liquidity in specific markets that previously drew volume from Japanese users, especially for derivatives and higher-risk products that domestic venues restrict.
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