Cryptocurrency exchange Bybit plans to halt operations in the UK due to impending marketing regulations,
- Bybit cryptocurrency exchange anticipates ceasing UK operations due to upcoming marketing regulations, which may consider the use of English as solicitation.
- The UK’s Financial Conduct Authority (FCA) is pressing Bybit and other exchanges for compliance, introducing restrictions on serving UK citizens.
- Until October 8, crypto firms can use reverse solicitation when clients initiate contact, but it becomes more complex after this date.
- Despite aiming to become a digital asset hub, the UK’s strict regulations may disappoint US-based crypto firms seeking a more favorable regulatory environment.
In the wake of upcoming marketing regulations in the United Kingdom, cryptocurrency exchange Bybit anticipates that it will no longer be able to operate within the country. Bybit’s CEO, Ben Zhou, expressed concerns that crypto firms within the UK may be held responsible for solicitation simply by using the English language.
At Bybit, we consider the UK to be a highly important market for the advancement of crypto and blockchain technologies. Our commitment to this market is unwavering, and we intend to maintain our presence in the UK for the long term. Meanwhile, we are dedicated to working…
— Bybit (@Bybit_Official) September 14, 2023
Troubles with New Marketing Rules
Bybit faces the challenge of navigating increasingly strict regulations, causing the exchange to consider withdrawing from several countries, including the UK. The Financial Conduct Authority (FCA) of the UK has reached out to Bybit, as well as rival exchanges such as Binance and OKX, to understand how these firms will comply with the new law. The law sets restrictions on how cryptocurrency firms can serve UK citizens.
Until October 8, crypto firms can still use reverse solicitation to serve UK clients, as long as the clients initiate the business relationship. However, the rules become more complicated after this date.
According to Zhou, “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. Everyone is in trouble. So everyone is thinking of plans for how to deal with this new law.”
The law also requires approval for any promotions related to crypto companies and prohibits inappropriate incentives for investment. Failure to comply with the regulations by next month may result in unlimited fines or up to two years in prison.
Exiting the UK seems to be the simplest option for Bybit. Zhou stated, “We recently exited France.”
United Kingdom versus United States
This year, the United Kingdom passed the Financial Services and Markets Bill, which classified cryptocurrency and stablecoins as regulated financial activities under the authority of the FCA. UK Prime Minister Rishi Sunak has expressed interest in transforming the UK into a digital asset hub.
However, the UK’s strict regulations may dash the hopes of US-based crypto firms seeking refuge from their own country’s hostile regulatory climate. Brian Armstrong, CEO of Coinbase, has suggested relocating to the UK if his company cannot obtain legal clarity on cryptocurrency in the US. The US Securities and Exchange Commission has already filed several lawsuits against firms like Coinbase, Kraken, and Binance for violating securities laws.
