Key Takeaways
- Starting October 31, ByBit will halt onboarding of Japanese users to align with the country’s evolving guidelines.
- The Financial Services Agency has been ramping up regulation this year.
- After a $1.5 billion hack in February, Bybit has been doubling down on third-party audits.
Crypto exchange Bybit has announced it will suspend new user registrations in Japan starting October 31, as the platform works to align with Japan’s tightening financial regulations.
The move comes amid one of ByBit’s most challenging years yet, still reeling from its massive February hack, which may have helped pave the way for its latest regulatory-first approach.
ByBit Pauses Operations In Japan
From 12 p.m. UTC on October 31, Bybit will no longer accept new account sign-ups from Japanese residents or nationals.
Existing Japanese users will not be affected for now, with all current services remaining available, the company said in a press release sent to CCN.
On Thursday, Oct. 30, the world’s second-largest crypto exchange by trading volume said the move reflects its “proactive approach to embracing local regulations.”
ByBit added that it was committed to operating responsibly under the framework set by Japan’s Financial Services Agency (FSA).
“This decision will allow Bybit to focus its efforts and resources on reviewing local regulatory requirements and evaluating how to best meet the standards outlined by Japanese authorities in the future,” the firm wrote.
ByBit apologized for any inconvenience to Japanese users and thanked them for their “understanding and continued support.”
Japan has taken a strict approach to crypto oversight, requiring exchanges to register with the FSA and comply with robust consumer protection.
Japan’s Crypto Oversight
Japan has steadily been building one of the world’s most comprehensive regulatory frameworks for digital assets under the oversight of the FSA.
In August, the agency proposed a “Crypto Assets and Innovation Division” to better respond to the fast-evolving landscape of crypto.
Under the proposal, the new division was seen as a necessary step to strengthen its capacity to monitor crypto assets and encourage responsible innovation.
ByBit’s Challenging Year
Bybit has endured one of its most testing years yet, marked by its massive $1.5 billion hack in February 2025 that had the potential to have destabilized the exchange.
The attack, attributed to North Korea’s Lazarus Group, was one of the largest in the industry’s history.
These experiences have likely shaped Bybit’s emphasis on regulatory alignment, particularly in markets with strong oversight such as Japan.
During his annual keynote address in August, CEO Ben Zhou described the attack as a defining moment for the company.
“Ever since the fall of FTX, we’ve implemented monthly proof-of-reserve reporting, and during this hack, our third-party auditors were able to verify that our assets remained fully solvent,” Zhou said.
Independent auditor Hacken confirmed Bybit’s reserve ratio exceeded 100% in the days following the incident, greatly reducing the panic amongst its customers.
Bybit’s audited proof-of-reserve model closely mirrors the FSA’s expectations for operational transparency which is likely setting a decent groundwork for future approval.
Changing Tides
The suspension of new user registrations comes just a couple of months after Japan’s FSA introduced new frameworks to move crypto oversight from its Payment Services Act to the Financial Instruments and Exchange Act (FIEA).
The move reclassifies crypto assets as securities, which imposes higher business and compliance standards on exchanges.
Bybit, which has faced scrutiny from the FSA in the past, is now pausing ahead of the rules’ finalization, which will occur at the end of this year.
Presumably, the exchange will work to establish a compliant return. Regardless, this latest announcement has cast doubt over its existing users.
Notably, Japan’s regulators are working to bring crypto under regulation, launch crypto ETFs, and accommodate its thriving, innovative crypto industry.
Now, with a new Prime Minister who isn’t against crypto and acknowledges its potential, the nation could be set for another regulatory overhaul. Though which direction it will take is uncertain.
One thing’s for sure, Japan’s ongoing relations with the U.S. could see them align more closely on crypto regulation in the near future as President Donald Trump makes crypto a key focus under his administration.
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Kurt Robson is a London-based reporter at CCN, specialising in the fast-moving worlds of crypto and emerging technology. He began his career covering local news in Cornwall after graduating from Falmouth University with First Class Honours in Journalism. There, he cut his teeth on everything from council meetings to missing swans.
He quickly rose through the ranks to become a frontline journalist at several of the UK’s leading national newspapers. Over the years, he has interviewed musicians and celebrities, reported from courtrooms and crime scenes, and secured multiple front-page exclusives.
Following the upheaval of the COVID-19 pandemic, Kurt shifted his focus to technology journalism—just ahead of the AI boom. With a natural curiosity and a trained eye for emerging trends, he has found a new rhythm in reporting on innovation.
At CCN, Kurt's work focuses on the cutting edge of crypto, blockchain, AI, and the evolving digital world. Drawing on his background in people-first reporting and his deep interest in disruptive tech, Kurt delivers stories that are insightful, entertaining, and human-centric.
Eddie is a gaming and crypto writer at CCN. Covering the often weird and wonderful world of Web3 with an adoring, but skeptical eye.
Prior to CCN, Eddie has spent the past seven years working his way through the crypto, finance, and technology industry. He began with PR and journalism with Bitcoin PR Buzz and BitcoinNews.com, eventually working his way to become a copywriter with a dozen firms, including the likes of Polkadot before returning to journalism in 2023.
Having studied Radio production and journalism at University in the UK, Eddie spent a few years making podcasts and presenting on a local London radio station as he built up his writing chops.
A lifelong skateboarder, Eddie can often be found at the skatepark or touring the streets looking for something new to try. That, or kicking back playing JRPGs on his original PSP.
