Bybit to End Services for Japanese Users from 2026 - A Strategic Retreat or Regulatory Reality?

Bybit pulls the plug on Japan. The crypto exchange announced it will cease all services for Japanese users starting in 2026, marking a major shift in its Asia-Pacific strategy.

The Regulatory Squeeze

This isn't a voluntary exit—it's a forced march. Japan's Financial Services Agency (FSA) has been tightening the screws, demanding strict compliance that some global platforms find too costly to implement. Bybit's move follows a pattern of international exchanges either adapting to Japan's rigid rulebook or bowing out entirely.

A Market Left Behind

For Japanese traders, it's back to the drawing board. The 2026 cutoff gives users time to offload positions and move assets, but it slams the door on one of the world's most accessible global platforms. Local, FSA-licensed exchanges will see a surge—convenient for regulators, less so for users who valued Bybit's product depth.

The Bigger Picture: Compliance Over Growth

Bybit's retreat highlights a brutal truth in crypto: growth means nothing without a license. Exchanges are choosing markets where the regulatory math works. For some, Japan's high compliance costs don't add up—better to reallocate resources to friendlier jurisdictions, where the only thing growing faster than user numbers is regulatory loopholes.

So, another one bites the dust in the land of the rising sun. Traders lose a venue, regulators get a quieter landscape, and Bybit lives to trade another day elsewhere. Just another chapter in finance where the rules are written by those who can afford the lawyers.

Japan enforces stricter crypto rules

The move follows a series of regulatory actions in Japan. In October, Bybit paused new user registrations. Moreover, earlier this year, the FSA asked Apple and Google to remove several unregistered crypto apps, including Bybit, KuCoin, MEXC, LBank, and Bitget.

The primary reason behind issuing a warning was the customer protection standards, hot wallet segregation, and a lack of legal recourse in the case of insolvency and security violations.

Japan maintains one of the world’s most stringent crypto regulatory regimes. While aimed at protecting consumers, industry observers say these rules have pushed some crypto businesses to shift operations overseas.

Separately, in November, Japan’s Financial Services Agency (FSA) approved a pilot program for yen-backed stablecoins led by the country’s three largest banks, Mitsubishi UFJ Financial Group (MUFG), Sumitomo Mitsui Banking Corporation (SMBC), and Mizuho Financial Group. 

The project is being carried out under the FSA’s Payment Innovation Project, which aims to encourage financial innovation while keeping regulatory risks under control.

Bybit’s global expansion efforts

Even as it scales back in Japan, Bybit has expanded its presence in other regulated markets. On December 20, Bybit reentered the UK market after a two-year exit, relaunching spot and peer-to-peer trading services.

The relaunch is supported by a partnership with Archax, an FCA-licensed digital asset exchange that oversees Bybit’s financial promotions and regulatory compliance.

Earlier, on October 20, Bybit secured the United Arab Emirate’s (UAE’s) first Virtual Asset Platform Operator License from the Securities and Commodities Authority (SCA). The approval allows the exchange to offer trading, custody, brokerage, and fiat conversion services to retail and institutional clients, making it the only fully licensed crypto exchange operating under the UAE’s national framework.

Bybit executives said the UAE license reflects the company’s focus on regulatory alignment. The exchange plans to expand its regional operations by hiring more than 500 employees in Abu Dhabi and Dubai and increasing its involvement in Web3 education initiatives.

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