Crypto exchange Bybit is preparing a phased withdrawal from Japan, announcing plans to restrict access for Japanese residents beginning in 2026.
The move comes after years of mounting pressure from Japan’s financial regulators and reflects the country’s strict stance on unlicensed crypto platforms.
Why Bybit Is Pulling Back From Japan
At the center of the decision is Japan’s Financial Services Agency (FSA), which requires all crypto exchanges serving Japanese residents to be fully registered and locally licensed. Bybit has never obtained this authorization, placing it in ongoing violation of Japanese regulations.
The FSA has issued repeated warnings to Bybit since 2021, signaling persistent enforcement risk rather than a temporary compliance dispute. Over time, this regulatory pressure has made continued operations in Japan increasingly untenable.
Timeline for Restrictions
Bybit has already taken initial steps toward exiting the market. New user registrations from Japan were suspended on October 31, 2025. Starting in 2026, existing Japanese residents will face gradual account restrictions as part of a phased withdrawal process.
There is, however, a narrow window for users who believe they have been incorrectly flagged as Japanese residents. These users must complete Identity Verification Level 2, including proof of address, by January 22, 2026, to avoid having their accounts restricted.
App Store Removal Signaled Escalation
Regulatory pressure intensified further in February 2025, when the FSA asked Apple and Google to remove several unregistered crypto apps from Japanese app stores. Bybit’s app was among those targeted, effectively cutting off one of the platform’s main distribution channels in the country.
This step marked a shift from warnings to direct enforcement, making a long-term presence in Japan increasingly impractical.
A Broader Strategic Shift
Bybit’s exit from Japan appears to be part of a wider strategic realignment. Rather than pursuing licenses in some of the world’s most restrictive jurisdictions, the exchange has focused on markets with clearer regulatory frameworks and defined approval pathways.
Notably, Bybit has expanded operations in the United Kingdom and the United Arab Emirates, where it has secured the necessary regulatory approvals to operate legally.
What This Signals for the Industry
Japan remains one of the most tightly regulated crypto markets globally, prioritizing consumer protection and strict oversight over rapid market expansion. Bybit’s withdrawal underscores a growing divide in the global crypto landscape: exchanges are increasingly choosing between full regulatory compliance or strategic exits.
For Japanese users, the message is clear, access to global crypto platforms will increasingly depend on local licensing. For exchanges, Japan continues to set a high compliance bar that not every operator is willing, or able, to meet.
