Digital currency exchange Bybit has confirmed its plans to temporarily suspend its operations in the United Kingdom, citing the introduction of new rules as a reason for its exit from the scene.
Bybit stated that the decision to pause its services in the U.K. is in line with its internal policy of complying with existing regulations. The move follows the approaching Financial Conduct Authority’s (FCA) deadline for unregistered digital currency service providers to comply with new promotion rules.
Under the new rules, digital currency exchanges are expected to promote their services through official channels, with offenders facing the grim prospect of fines and criminal prosecution.
Following a recent FCA warning, Dubai-based Bybit has announced a phased approach to its suspension, starting with the restriction on registering new U.K. customers, identified as U.K. resident or nationals, by October 1. Existing users will be barred from making deposits or increasing the size of their existing positions starting on October 8, with the exchange noting that users have the right to withdraw funds from the company.
Per the update, users have until 2024 to liquidate their trades on the exchange or face the risk of an automatic liquidation.
“UK customers who are implicated by these measures are strongly encouraged to take action by January 8, 2024, 8AM UTC to manage and wind down their positions,” read the update. “After the stipulated deadline, their open positions will be liquidated, and the liquidation funds will be available for withdrawal.”
The exchange hinted that it will be making a return to the U.K. at a later date, after updating its internal processes to meet the requirements of the FCA.
“Bybit has made a choice to embrace the regulation proactively and pause our services in this market,” read the update. “The suspension will allow the company to focus its efforts and resources being able to best meet the regulations outlined by the UK authorities in the future.”
The FCA’s rules, in addition to the restriction of promotional activities, urge digital currency providers to impose a “cooling-off” period for first-time investors and prohibit referral bonuses.
However, the financial regulator revealed in a recent update that unregistered digital currency service providers have failed to engage with the FCA despite its best efforts.
FCA’s crusade for regulatory compliance
The financial watchdog has heightened its supervision over the digital currency sector in recent months, focusing on compliance with regulatory standards. The FCA has previously teamed up with the Advertising Standards Authority (ASA) to impose stricter rules on digital currency promotions.
In the summer of 2023, the FCA extended its crusade to unregistered digital currency ATMs in the U.K., shutting down 26 ATMs for failing to comply with its directives. Despite the calls for registrations, the FCA only approved 38 firms out of a staggering 291 applications, with over 150 firms withdrawing their applications.
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