Bybit plans to leave the UK due to impending cryptocurrency marketing regulations set by the Financial Conduct Authority.
Bybit, a leading global cryptocurrency exchange, plans to withdraw from the UK due to imminent regulatory changes. The Financial Conduct Authority (FCA) is set to introduce new rules, targeting the marketing transparency and accuracy of crypto products. With these regulations on the horizon, several major crypto platforms, including Bybit, are strategizing their next moves.
The upcoming regulations, effective from Oct. 8, will introduce significant shifts, especially in marketing strategies. The FCA hopes that the revised rules, like the inclusion of a cooling-off period for novice investors, will usher in greater clarity and truthfulness in the promotion of cryptocurrency products.
Bybit’s CEO, Ben Zhou, has recently hinted at their intention to leave the UK market soon. This isn’t the company’s first move in response to tightening regulations; they’ve already left the French market. With the FCA’s proactive approach, reaching out to major players like OKX, Binance, and Bybit, crypto platforms are reassessing their marketing tactics to ensure compliance.
One of the new regulatory stipulations involves the use of the English language for marketing. If exchanges employ English for promotions, the FCA might consider it as a solicitation attempt targeting their users. This specifically challenges the reverse solicitation method which many exchanges have utilized to cater to UK clients, even after the 2021 ban on crypto derivative products in the UK. Consequently, Bybit, along with other exchanges, might decide to sever their ties with the UK.
Impact of New Regulations on Global Crypto Firms
The upcoming promotional regime isn’t only affecting UK-based firms. George Morris, associated with Simmons & Simmons, emphasized the expansive nature of the new regulations. As per Morris, even websites accessible to UK users could be deemed as promotional, making them fall under these rules. This suggests that the ripple effects of the regulations could be felt internationally, impacting a myriad of firms outside the UK.
Bybit, established in 2018, initially focused on derivatives. However, over the years, they’ve expanded their offerings, delving into other areas like spot trading. Their strong foothold in the derivatives market remains evident with a staggering 23% share in open interest across bitcoin futures, as per data from The Block Research.
The crypto world is on the brink of yet another regulatory transformation, and companies like Bybit are bracing themselves for the changes. The upcoming months will be crucial in determining the path of crypto exchanges in the UK and potentially globally.