Bybit Halts UK Operations After FCA’s Crypto Marketing Crackdown

Bybit, a leading crypto-trading gamification platform, has announced the suspension of its UK operations in response to a warning from the UK Financial Conduct Authority (FCA). The decision, effective from October 2023, comes as the FCA enforces stricter regulations on crypto businesses, particularly around marketing and communications. Bybit’s move highlights the challenges crypto exchanges face in navigating evolving regulatory landscapes while maintaining user trust and compliance.

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The FCA’s new rules, outlined in its June 2023 Policy Statement, mandate transparent and fair marketing practices for crypto firms, effective October 8, 2023. These regulations prohibit misleading promotions and ban incentives like referral bonuses, with non-compliance potentially leading to criminal charges. Bybit, known for gamifying crypto trading to attract users, decided to proactively suspend services rather than risk regulatory penalties. New UK account applications ceased on October 1, 2023, with existing users required to close positions and withdraw funds by January 8, 2024, or face automatic liquidation.

This suspension follows Bybit’s earlier exit from Canada due to similar regulatory pressures, signaling a broader trend of crypto platforms retreating from heavily regulated markets. Despite CEO Ben Zhou initially denying UK exit rumors, the FCA’s firm stance left Bybit with little choice. The platform, headquartered in Dubai, has emphasized its commitment to future compliance, suggesting the suspension is temporary while it aligns with FCA guidelines.

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Bybit’s gamified trading model, which makes investing engaging through rewards and interactive features, has drawn millions globally but operates without full regulation, raising concerns about investor protection. The FCA’s warning highlighted Bybit’s lack of authorization, prompting scrutiny of its operations. While Bybit avoids fiat deposits to sidestep some regulatory requirements, the FCA’s actions underscore the need for oversight as crypto gains mainstream traction.

For UK users, this means finding alternative platforms, while Bybit focuses on markets like Cyprus, where it recently secured a custody services license. The suspension reflects the crypto industry’s ongoing struggle to balance innovation with regulatory demands, a challenge that will shape its future.