Bybit Contemplates Departure from U.K. Amidst New Regulatory Landscape

Bybit, a prominent crypto exchange, anticipates having to cease operations in the United Kingdom due to new marketing regulations set to take effect next month. The CEO of Bybit, Ben Zhou, asserts that any crypto firm operating within the country may be held accountable for solicitation simply by using the English language.

Troubles With New Marketing Rules

Zhou explains that regulations are becoming increasingly strict, and as a result, the exchange will likely have to “retreat in many countries,” including the UK. The Financial Conduct Authority (FCA) of the UK has reached out to Bybit, along with other rival exchanges like Binance and OKX, to inquire about their plans for complying with the new law. This law restricts how crypto firms are allowed to provide services to UK citizens.

Until October 8, these firms can continue using reverse solicitation, which means they can serve UK clients as long as the customer initiates the business relationship. However, after that date, the rules become much more difficult to navigate.

“The new law is that if you use English as a language, they will see you as trying to solicit their users, so you cannot claim that you are in reverse solicitation,” Zhou said. “Everyone is in trouble. So everyone is thinking of plans for how to deal with this new law.”

The law also requires that any promotions for crypto companies be approved and not inappropriately incentivize people to invest. Failure to comply with the rules by next month may result in an unlimited fine or up to two years in prison.

Zhou believes that the simplest solution is to exit the UK. He mentions that they recently exited France as well.

United Kingdom Versus United States

Earlier this year, the United Kingdom passed the Financial Services and Markets Bill, which established crypto and stablecoins as regulated financial activities under the jurisdiction of the Financial Conduct Authority (FCA). The Prime Minister of the UK, Rishi Sunak, has expressed interest in transforming the country into a digital asset hub.

However, the stringent regulations in the region may hinder the plans of US-based crypto firms seeking refuge in the UK from their own country’s hostile regulatory climate. Coinbase CEO Brian Armstrong has indicated that his company may consider such a move if they fail to obtain legal clarity on crypto in the US. The Securities and Exchange Commission (SEC) has already filed numerous lawsuits against firms like Coinbase, Kraken, and Binance for violating securities laws.