- Bybit will stop accepting new account applications from UK residents starting October 1 due to new marketing rules imposed by the UK’s Financial Conduct Authority (FCA).
- The FCA’s rules, which include a ban on incentives like referral bonuses for crypto promotions, will take effect on October 8.
- Bybit will suspend its services in the UK market to comply with these regulations.
Crypto Exchange Bybit, which stated earlier this month that new marketing rules in the UK would impede its operations, will no longer accept new account applications from UK citizens from October 1.
The new rules, published by the UK’s Financial Conduct Authority (FCA), apply to all cryptocurrency marketing, including the prohibition on referral bonuses. According to the regulator, the rules will go into force on October 8.
To comply with FCA regulations, crypto exchange Bybit will halt its services in the UK market beginning October 8. “Bybit has made a choice to embrace the regulation proactively,” the platform said in its press release.
According to the company, existing UK users “will no longer be able to make any new deposits, create new contracts, or increase any of their existing positions for all products and services” as of October 8.
Furthermore, UK customers are encouraged to exit their positions before January 8, 2024. According to the corporation, open positions will be liquidated beyond the deadline.
The FCA’s effort to analyze crypto businesses to ensure compliance with its new marketing regulation is “clear, fair, and honest,” according to Lucy Castledine, FCA’s Director of Consumer Investments.
“As a proportionate regulator, we’re giving firms that apply a little more time to get the other reforms requiring technology and business change right,” she explained at the time.
The decision comes as regulators globally are concerned about the failure of global crypto enterprises like FTX, and the tightening of standards indicates more regulatory monitoring of crypto corporations.
Bybit said it would continue to expand in worldwide markets and was on a “mission to deliver next-level trading experiences to all crypto believers with the necessary guardrails in place.”
FCA’s “Final Warning”
Bybit’s resignation from the UK market comes after the FCA issued a “final warning” to crypto businesses regarding the forthcoming financial promotions regime.
In a letter dated September 21, the regulator stated that all enterprises offering crypto assets to UK customers must prepare for this regime.
“This regime is important for reducing and preventing harm to consumers from investing in crypto assets that do not match their risk appetite,” noted the watchdog. “The regime will also create a fairer, more consumer-focused landscape in which firms can compete and innovate.”
The letter also stated that many overseas crypto asset firms refused to participate with the FCA due to regulatory tightening, with only 24 out of 150 firms responding to the regulator’s survey.
“If unregistered cryptoasset firms continue to promote cryptoassets to UK consumers once the regime enters into force, they are likely to be in breach of section 21 of the Financial Services and Markets Act 2000 (FSMA). This would be a criminal offense punishable by up to 2 years imprisonment, an unlimited fine, or both.”
The financial regulator also cautioned intermediaries such as social media platforms and search engines, app stores, and payment companies to ensure that unregistered cryptocurrency businesses do not promote illicit marketing to UK users.