Bybit Announces Gradual Exit from the Japanese Market
Leading crypto exchange Bybit confirmed its plans to discontinue services for Japanese residents starting in 2026. This strategic decision aligns with increased regulatory scrutiny from Japan’s Financial Services Agency (FSA) targeting operations of unregistered exchanges.
Why Is Bybit Leaving Japan?
In a detailed announcement, Bybit revealed that its withdrawal is part of its effort to meet Japan’s stringent compliance requirements for cryptocurrency platforms. Customers based in Japan will face gradual account restrictions beginning in 2026. Users affected by this shift are encouraged to verify their identities through an updated Identity Verification Lv. 2 (POA/KYC2) by January 22, 2026, ensuring uninterrupted account access and mitigating restrictions.
Regulatory Tightening in Japan’s Crypto Landscape
Japan remains a critical player in the global crypto space, demonstrating significant adoption rates. A recent Chainalysis report showed that Japan achieved a 120% year-over-year growth in on-chain value between June 2024 and June 2025, outpacing other APAC nations like South Korea, India, and Vietnam. However, the FSA has intensified regulatory oversight, leading to enforcement actions such as requesting Apple and Google to remove apps from unregistered platforms like Bybit and KuCoin.
Japan’s Cryptocurrency Market at a Crossroads
While Japan continues to be an attractive market with its advancements in stablecoins and Bitcoin mining (even integrating it into the national energy grid), regulatory complexities pose challenges. A survey by advisory firm 400F highlighted that tax regulations remain a significant deterrent, with 22.2% of former investors citing these reasons when exiting the market.
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What’s Next for Bybit Users in Japan?
Bybit’s decision sends a clear signal about the growing importance of regulatory compliance in the cryptocurrency market. For users, ensuring complete identity verification and staying informed about any new updates will be critical. As the crypto ecosystem evolves globally, Japan stands as a testament to balancing innovation with regulatory standards.
