Bybit to Restrict Services for Japan Residents Amid Stricter Crypto Regulations

Bybit, the world’s second-largest cryptocurrency exchange by trading volume, has announced plans to restrict access to its services for residents of Japan starting next year, as the platform moves to align with the country’s strict financial regulations. The exchange did not disclose which specific services will be affected, but confirmed that impacted users in Japan will receive direct communication as the changes are gradually implemented.

Japan is widely recognized for having one of the most robust regulatory frameworks for cryptocurrencies. Any crypto exchange seeking to operate legally in the country must register with the Financial Services Agency (FSA) and comply with comprehensive requirements related to customer protection, segregation of user assets, and anti-money laundering (AML) controls. Exchanges that fail to meet these standards are often forced to suspend or completely exit the Japanese market.

In addition to existing compliance obligations, Japan’s financial regulator is reportedly planning to introduce new rules that would require domestic cryptocurrency exchanges to maintain liability reserves. These reserves are designed to safeguard users against potential losses stemming from hacks, cyberattacks, or other operational failures, further increasing the compliance burden on crypto platforms.

Bybit’s decision highlights the growing challenges global crypto exchanges face as regulators worldwide tighten oversight of digital asset markets. While the company has not explicitly stated that it will fully exit Japan, restricting services suggests that meeting local regulatory requirements may be increasingly complex or costly.

The announcement comes shortly after Bybit revealed it had resumed operations in the United Kingdom, nearly two years after withdrawing due to tougher crypto marketing and promotion regulations imposed by U.K. authorities. This return signals Bybit’s broader strategy of reassessing regional compliance frameworks and selectively re-entering markets where regulatory clarity allows for sustainable operations.

As global cryptocurrency regulations continue to evolve, exchanges like Bybit are being forced to adapt their strategies on a country-by-country basis. For Japanese crypto users, the upcoming restrictions underscore the importance of regulatory compliance and may prompt traders to explore alternative, locally registered platforms that meet the FSA’s stringent standards.