Bybit, the world’s second-largest crypto exchange by trading volume, has announced it will pause new user registrations in Japan starting Oct. 31, 2025, as it adapts to new regulations from the country’s Financial Services Agency (FSA).
The company said the move is part of its “proactive approach” to align with Japan’s emerging regulatory framework for digital assets, according to a Wednesday announcement.
“It has always been Bybit’s commitment to operate responsibly and in compliance with local laws and regulatory expectations,” the exchange said.
Existing Japanese customers will not be affected for now, with all current services remaining operational. Bybit said it will share further updates as discussions with regulators progress.
Related: Circle’s Arc attracts South Korea’s first won-backed stablecoin experiment
Japan’s FSA weighs allowing banks to hold Bitcoin
Last week, it was reported that FSA is considering regulatory reforms that would allow banks to acquire and hold cryptocurrencies such as Bitcoin (BTC) and operate licensed crypto exchanges.
The proposal will be reviewed at an upcoming Financial Services Council meeting, with the aim of aligning digital assets with traditional instruments like stocks and government bonds.
The FSA is expected to design a framework addressing risks tied to crypto volatility, potentially requiring banks to meet new capital and risk-management standards before holding digital assets. The move could open the door for broader institutional adoption within Japan’s regulated banking sector.
Cointelegraph reached out to Bybit for comment but had not received a response by publication.
Related: Japanese mega banks to jointly issue yen-pegged stablecoin: Report
Japan’s regulations drive crypto exodus
In July, Maksym Sakharov, co-founder and CEO of decentralized onchain bank WeFi, told Cointelegraph that Japan’s regulatory bottlenecks, not taxes, are the real reason crypto innovation is leaving the country.
Sakharov said that even if the proposed 20% flat tax on crypto gains is implemented, Japan’s “slow, prescriptive, and risk‑averse” approval culture will continue to push startups and liquidity offshore.
Magazine: Bitcoin OG Kyle Chassé is one strike away from a YouTube permaban
