- Bybit sets firm compliance deadline as Japan users face phased access limits
- Regulatory pressure accelerates Bybit withdrawal, reshaping options for Japanese crypto traders
- KYC requirements redefine market access as overseas exchanges retreat from Japan
Japanese crypto traders are facing renewed uncertainty after Bybit confirmed plans to end services for users residing in Japan. The exchange said the move reflects a strategic response to rising regulatory pressure and signals a clear shift in regional operations.
Bybit disclosed that account restrictions will begin rolling out in 2026, following earlier limits on new registrations. Consequently, Japanese residents now have a defined timeline to complete compliance steps or prepare alternative trading arrangements. Moreover, the update shows how enforcement actions increasingly shape access to global crypto platforms.
Users identified as Japanese residents must complete Level 2 identity verification by January 22, 2026. This process requires proof of address to confirm residency status. Hence, users who fail to meet the requirement will face progressive account limitations once enforcement begins.
Additionally, users who believe their residency was misclassified may update account details before the deadline. Compliant users may retain access to Bybit’s global website. However, separate guidance will follow for accounts confirmed as belonging to Japanese residents.
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Gradual Restrictions Force Decisions for Existing Users
Earlier developments already signaled this direction. Bybit halted new registrations from Japan in late October, marking the initial phase of its withdrawal. Moreover, the platform removed its application from local app stores earlier this year. These steps pointed to a controlled retreat rather than an abrupt shutdown.
As a result, existing users must now decide whether to complete verification, relocate assets, or exit the platform entirely. Besides, the timeline allows for orderly planning without sudden disruption. Bybit emphasized that restrictions will increase gradually instead of taking effect all at once.
Initially, affected users may encounter limits on trading features or deposits. Subsequently, additional controls may apply as enforcement progresses. Additionally, the exchange urged users to review account status early to avoid operational complications.
Regulatory Pressure Narrows Options for Overseas Platforms
Japan has tightened oversight of overseas crypto exchanges in recent years. Regulatory changes strengthened supervision of crypto derivatives trading. Consequently, unregistered platforms now face reduced flexibility when serving Japanese residents.
Bybit has received multiple warnings from regulators since 2021, according to public disclosures. Moreover, enforcement actions led to the removal of certain crypto applications from domestic app stores. Hence, Japanese traders increasingly depend on locally registered exchanges.
Despite the exit shock, some market observers view the move as strategic rather than permanent. Other global exchanges previously withdrew before returning under licensed frameworks. Additionally, Bybit’s global scale suggests the company may reassess the Japanese market if regulatory alignment becomes feasible.
Also Read: Kiyosaki Goes Quiet on Bitcoin as BTC Struggles Below $100,000
