Key Takeaways
Crypto exchange Bybit is bidding adieu to the French market, attributing the decision to the recent regulatory shifts in Europe, particularly Markets in Crypto-Assets Regulation (MiCA).
As one of the largest crypto exchanges in the bloc, its exit is poised to leave a significant void. The company is now searching for a new base, with a long list to choose from.
Effective Aug. 13, French users on Bybit will be limited to withdrawing existing funds, with no options to open new transactions or purchase additional products.
The exchange has shifted user accounts in France to a “close-only” mode, preventing further buying or trading activities.
This move has sparked discontent within the cryptocurrency community, with many expressing concerns over France’s increasingly stringent regulations and perceived hostility towards the industry.
Bybit’s departure from the region follows a similar exit by Binance, the world’s largest cryptocurrency exchange, which also ceased operations in France in 2023. The exodus of prominent exchanges from the country raises questions about the future of crypto businesses in France and the impact of regulatory policies on the industry.
Bybit’s operations in France have faced scrutiny for some time. In May, the Autorité des Marchés Financiers (AMF) highlighted that Bybit had been operating without proper registration as a digital asset service provider (DASP), which is mandatory under French law.
This resulted in Bybit being blacklisted last year for non-compliance with French regulations. Despite the challenges in France, Bybit has continued to express its commitment to compliance, citing its recent launch in the Netherlands as a sign of its engagement with European regulatory standards.
Bybit’s decision follows the broader impact of the MiCA regulations enacted by the European Commission.
These rules, part of a comprehensive digital finance package, impose strict guidelines on crypto providers and stablecoin issuers. With these regulations taking effect, Bybit, like many other exchanges, is reassessing its service strategy across Europe.
The remaining provisions for cryptocurrencies and related services will be implemented by all EU member states by the end of December 2024, marking significant changes in market operations and consumer protection measures.
For Bybit or any other cryptocurrency exchange considering relocating or establishing a new base, several countries emerge as promising options as they establish themselves as hubs for cryptocurrency and blockchain innovation, offering favorable regulatory environments and tax incentives to attract businesses and investors.
Portugal is one such country that offers favorable tax conditions. Long-term crypto holdings are exempt from taxation, making the country an attractive destination for investors and firms.
The Netherlands is known for its balanced regulatory framework, which provides clear guidelines for cryptocurrencies and initial coin offerings and fosters a supportive environment for blockchain startups and financial technology innovations.
Luxembourg also stands as a solid option. Its financial sector and regulatory support for blockchain technology make it an attractive destination for crypto funds and startups.
Malta is also making a strong case as a hub for crypto companies. Recently, OKX, a top crypto exchange, chose Malta over France as its base for MiCA operations, citing the country’s progressive approach to regulating cryptocurrencies.