Bybit Bids Adieu to French Market Amid Regulatory Tightening

Crypto exchange faces regulatory hurdles, leading to market exit.

Cryptocurrency exchange Bybit has announced its exit from the French market, citing "recent regulatory developments" as the primary reason. The decision comes amidst increased scrutiny from French financial regulators and the implementation of new European Union crypto legislation. Beginning August 2, French users will face restrictions on their Bybit accounts, including the inability to open new positions or purchase any products. By August 13, all unclosed positions will be automatically liquidated, and users will only be able to withdraw their remaining funds.

Bybit’s exit from France follows a series of regulatory challenges. In May 2024, the Autorité des Marchés Financiers (AMF), France’s financial regulator, warned French citizens that Bybit was operating without proper registration as a Digital Asset Service Provider (DASP). The AMF had previously blacklisted Bybit in 2022 for non-compliance with French regulations.

The move is part of a broader trend of cryptocurrency exchanges adapting to evolving regulatory landscapes. The implementation of the European Union’s Markets in Crypto-Assets (MiCA) regulation, which sets guidelines for crypto providers and stablecoin issuers, has further complicated the regulatory environment. While some provisions of MiCA took effect in June 2024, the remaining rules for cryptocurrencies and service providers will be implemented starting December 30, 2024.

Other major exchanges have also faced scrutiny from French authorities. For instance, Binance’s founder, Changpeng Zhao, was forced to relinquish ownership of Binance France in December 2023 to comply with U.S. sanctions. Despite these regulatory challenges, Bybit has managed to grow significantly in the global cryptocurrency market. As of August 2024, it stands as the second-largest exchange by trading volume, processing over $5.5 billion on August 1, second only to Binance’s $11.4 billion.

However, Bybit’s growth has been accompanied by a series of market exits. In addition to France, the exchange has previously withdrawn from markets in Canada and the United Kingdom due to tightening regulations. Bybit’s website currently lists the United States, the UK, China, Hong Kong, Singapore, and Canada among the jurisdictions where it no longer operates.

Bybit has stated that it looks forward to returning to the French market in the future, once it has secured the appropriate licenses under French law. For now, French users of Bybit will need to find alternative platforms for their cryptocurrency trading activities.

photo source / Blockonome