Bybit is planning a phased pullback from Japan beginning in 2026, underscoring how tough local rules are reshaping the strategies of major global crypto platforms. Rather than an abrupt shutdown, the exchange says it will apply account restrictions on a rolling basis for users identified as Japanese residents and has asked anyone who thinks they’ve been misclassified to complete additional identity verification. Why Japan is a challenge Japan’s Financial Services Agency (FSA) requires crypto platforms serving local residents to hold a domestic licence — a regime forged in response to past exchange failures and a strong consumer-protection focus. Bybit is not registered with the FSA, and the new announcement follows months of regulatory pressure that have already narrowed its footprint in Japan. Steps already taken This latest move builds on earlier measures: - In October, Bybit stopped new user registrations from Japan, citing ongoing talks with regulators. - In February, the FSA asked Apple and Google to suspend app-store downloads for five unregistered exchanges — Bybit, MEXC Global, LBank, KuCoin and Bitget — reinforcing Tokyo’s hard line on access for local users. Industry voices say the strict environment is pushing development overseas. In July, WeFi co-founder and CEO Maksym Sakharov warned that Japan’s oversight is driving crypto innovation to more permissive jurisdictions. A targeted global strategy Despite retreating from Japan, Bybit remains highly active worldwide and is taking a jurisdiction-by-jurisdiction approach: trimming or restricting services where local rules are restrictive while expanding where regulation is clearer or more welcoming. Recent moves outside Japan include: - Reentry into the UK after a two-year pause, launching spot trading and peer-to-peer services via a promotions arrangement approved by Archax rather than through direct UK registration. - Strengthening its presence in the Middle East after winning a Virtual Asset Platform Operator Licence from the UAE’s Securities and Commodities Authority last month, following eight months of in-principle approval. What this means Bybit’s gradual exit from Japan highlights the uneven global regulatory landscape confronting crypto exchanges: firms are increasingly balancing compliance costs against market access, opting for tailored strategies rather than a one-size-fits-all presence. For Japanese users, the phased restrictions and KYC follow-ups make it important to check account status and withdrawal options as the 2026 changes roll out. Read more AI-generated news on: undefined/news