Bybit Withdraws from French Market Amidst New EU Crypto Regulations

Bybit announced its decision to exit the French market on Thursday, attributing its departure to regulatory changes as Europe anticipates the enactment of its comprehensive crypto legislation. This strategic shift underscores the ongoing transformation in the regulatory landscape and how it governs the engagement of both corporations and individuals with cryptocurrencies.

Effective August 13, the firm will limit the capabilities of French users on its platform, essentially restricting activities to the withdrawal of existing funds. Bybit’s move to a “close-only” mode for these accounts signifies that users will no longer have the liberty to open new positions or embark on new product purchases.

Bybit’s operational challenges in France are not new. The national financial authority, AMF, had previously issued warnings to the public regarding Bybit’s unregulated status, highlighting its absence from the country’s digital asset service provider (DASP) registry in 2022. This lack of registration rendered Bybit’s presence in France not only contentious but outrightly illegal under French legislation.

In discussions with Decrypt, Bybit expressed its commitment to maintaining a secure and compliant trading environment globally, pointing to its recent successful inauguration in The Netherlands as evidence of its proactive engagement with European regulatory frameworks.

The backdrop to Bybit’s withdrawal is the European Union’s Markets in Crypto-Assets (MiCA) regulation, part of a broader digital finance package unveiled by the European Commission in late 2020. Following ratification by the European Parliament in April 2023, MiCA seeks to establish a more structured guideline for crypto stakeholders, with initial provisions becoming effective in June 2023. As the regulations progressively come into full force, member states, including France, will implement comprehensive measures encompassing marketing communication standards, anti-money laundering protocols, and heightened consumer protection by the end of 2024.

Bybit’s decision to cease operations in France mirrors its earlier exits from Canada and the United Kingdom, reflecting the growing stringency in global regulatory landscapes targeting the crypto sector. The exchange lists several jurisdictions, including the U.S., the U.K., China, Hong Kong, Singapore, and Canada, as areas no longer serviced, alongside stringent restrictions in territories like North Korea, Cuba, Iran, and parts of Ukraine under Russian control.

Despite these restrictions, Bybit has ascended to become the second-largest crypto exchange by trading volume, trailing only behind Binance. This notable achievement underscores its considerable footprint in the crypto exchange domain, despite regulatory hurdles in pivotal markets.

Bybit’s narrative in France and its broader global strategy underscore the intricate dance between crypto enterprises and regulatory bodies, illustrating the pivotal role of compliance in shaping the future landscape of digital finance.