Bybit, one of the world’s major cryptocurrency exchange operators, is preparing to exit the United Kingdom. The move is set to take effect in the coming weeks due to upcoming marketing regulations.
Ben Zhou, the co-founder, and CEO of Bybit, anticipates the need to withdraw from numerous countries as regulations tighten. He mentioned that the UK is one of the countries they will likely exit, following their recent exit from France.
“We do see regulation becoming more strict. Most likely, we’ll have to retreat in many countries. I think the UK — we’ll have to exit very soon. We recently exited France,” Ben Zhou, co-founder and CEO of Bybit, explained.
The Financial Conduct Authority (FCA) is scheduled to implement new regulations on October 8th, which include introducing a cooling-off period for first-time cryptocurrency investors. These rules aim to enhance transparency and accuracy in the marketing of cryptocurrency products. Zhou explained that these regulations will alter the dynamics of solicitation. While crypto derivative products have been prohibited in the UK since 2021, some exchanges have still served UK customers through reverse solicitation. However, this practice may no longer be viable after October 8th.
The FCA has contacted major cryptocurrency exchange operators, including Bybit, OKX, and Binance. The authority is inquiring about their plans to comply with the new law. According to Zhou, if English is used in communications, the FCA may interpret it as an attempt to solicit UK users. Consequently, many in the industry are grappling with how to navigate these new regulations.
Is it a Good or Bad thing?
Starting on October 8th, enhanced regulations will provide increased protections for UK consumers when it comes to the marketing of crypto asset firms. These regulations mandate that marketing materials must be transparent, equitable, and devoid of misleading information. They must also prominently feature risk warnings and refrain from offering inappropriate investment incentives. Importantly, these rules have a global reach, applying to firms regardless of their geographic location, and aim to bolster protections against the elevated risks associated with cryptoassets.
“UK consumers will have much greater protection as crypto asset firms’ marketing must be ‘clear, fair and not misleading,’ labeled with prominent risk warnings and must not inappropriately incentivize people to invest. These rules apply to firms wherever they are based globally and help strengthen how people are protected from the high risks associated with crypto assets,” the FCA noted.