- From October 31, 2025, Bybit will not be accepting new user sign-ups in Japan.
- Japan’s FSA plans to classify crypto assets as financial products.
- Japan is weighing allowing banks to hold and trade cryptocurrencies.
Bybit, the world’s second-largest cryptocurrency exchange by trading volume, is suspending new user registrations in Japan starting October 31, 2025.
The move comes as the country’s Financial Services Agency (FSA) prepares to implement tighter regulations that could reclassify crypto assets as financial products.
The exchange said the suspension is part of its “proactive approach” to align with Japan’s evolving legal framework.
Bybit pauses onboarding of new Japanese users.
Beginning at 12 p.m. UTC on October 31, Bybit will halt the creation of new accounts for Japanese residents and nationals.
Existing users, however, will continue to have full access to all services for the time being.
In a statement, Bybit said it remains committed to operating “responsibly and in compliance with local laws and regulatory expectations.”
The company added that the pause will allow it to focus on reviewing local requirements and determining how to meet the new standards being drafted by the FSA.
This announcement comes amid growing scrutiny of global exchanges by Japanese regulators, who have been tightening oversight to protect investors and ensure transparency.
FSA prepares sweeping crypto reforms
Japan’s Financial Services Agency is preparing sweeping changes that could reshape how crypto is regulated in the country.
Japan’s crypto market has grown rapidly, with more than 12 million registered accounts as of early 2025.
Despite this growth, the FSA remains cautious about retail investor exposure.
About 80% of domestic accounts hold less than ¥100,000 ($670), raising concerns about the risks faced by small investors relying on limited information.
In August, the FSA established a new “Crypto Assets and Innovation Division” to monitor the fast-evolving industry while promoting responsible innovation.
The FSA now plans to amend the Financial Instruments and Exchange Act (FIEA) in 2026, reclassifying cryptocurrencies from a “means of settlement” to “financial products.”
This shift would give regulators greater power to investigate and penalise insider trading and market manipulation in the crypto market.
A working group within the FSA is also drafting Japan’s first legal definition of insider trading in crypto, which could soon make it a punishable offence.
These developments mark a decisive step toward aligning Japan’s crypto oversight with that of its traditional securities markets.
At the same time, the FSA is considering allowing banks to hold cryptocurrencies such as Bitcoin for investment purposes.
If approved, this would reverse a 2020 restriction and open the door for banks to participate in crypto trading and custody services under strict risk and capital requirements.
A challenging year for Bybit
Bybit’s suspension in Japan follows what has been one of the company’s most turbulent years.
In February 2025, the exchange suffered a $1.5 billion hack, one of the largest in the industry’s history, reportedly linked to North Korea’s Lazarus Group.
In the aftermath, Bybit intensified its compliance efforts, introducing monthly proof-of-reserve reports and expanding third-party audits to reassure users and regulators.
Independent auditor Hacken later confirmed that Bybit’s reserve ratio remained above 100% following the incident, easing customer concerns.
The exchange’s heightened transparency and regulatory cooperation mirror Japan’s broader expectations for crypto firms.
Bybit’s approach aligns with the FSA’s emphasis on accountability, financial soundness, and investor protection.
