Leading cryptocurrency exchange Bybit announced its exit from the UK market as the country’s new regulator, the Financial Conduct Authority (FCA), gears up to enforce new rules for crypto businesses from October.
In a statement released on September 22, 2023, Bybit stated that the exchange would be pausing its activities in the UK in the wake of FCA’s decision to introduce new rules related to marketing activities and communications of crypto assets firms. The new rules have been released as part of the UK’s June 2023 policy guidelines, ‘Financial Promotion Rules for Crypto Assets’.
The new rules formulated by the UK authority include a “cooling-off period” for first-time crypto investors and are being enforced to introduce more transparency and accuracy in crypto dealings.
Starting October 1, the exchange will not be entertaining any new applications from UK citizens. Once the rules are enforced on October 8, Bybit’s current UK users will not be able to make any new deposits, create new contracts, or increase their positions for any product or service. The users, however, will be able to close or reduce their positions and withdraw their funds.
The Bybit team has set January 8, 2024, as the deadline for its UK clients to wind down all their positions. Any open positions after the deadline will be liquidated and the resulting funds will be made available for withdrawal.
There are no reports as to how long Bybit would halt its services in the UK, however, the crypto exchange stated that the period would give the company the time and space needed to focus on regulatory requirements in the UK in the future.
At the same time, Bybit isn’t the only crypto exchange whose plans have been impacted by the new set of guidelines. According to reports, leading exchanges for the Top 10 cryptocurrencies like Binance and OKX have been reevaluating their strategies in the wake of FCA’s guidelines. In a media interview, Zhou said the new rules could imply that by simply maintaining a website that can be accessed by UK customers, a crypto business is promoting itself. He had also said that the exchange saw crypto rules becoming stricter which may cause Bybit to retreat in many nations.
Zhou also stated that new rules could have an impact on how solicitation works. Even though the UK has banned crypto derivative products since 2021, there are exchanges that have been able to offer the facility through reverse solicitation.
Analysts monitoring the UK markets said they are closely monitoring live cryptocurrency prices to gauge the impact of such a move on the sector. Meanwhile, Bitcoin-centric exchange CoinCorner is also discontinuing its affiliate programme in the UK from October in the wake of the new rules.
Disclaimer: This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
