• Bybit will gradually exit the Japanese market starting in 2026 due to regulatory pressures.
• Japanese users must complete Level 2 KYC by January 22, 2026, to avoid restrictions.
• The withdrawal mirrors moves by other major exchanges amid stricter Japanese crypto regulations.

Major cryptocurrency exchange Bybit has announced that it will begin a phased withdrawal from Japan starting in 2026. 

The company stated that this decision comes after years of regulatory challenges with Japan’s Financial Services Agency (FSA), which has repeatedly targeted Bybit for operating without a license. The FSA has previously issued warnings to the exchange in May 2021, March 2023, and November 2024.

Source: Bybit

Bybit’s measure will impact existing accounts of Japan residents. If customers fail to complete Level 2 KYC verification, which includes address verification, before January 22, 2026, their access will become increasingly limited.

Bybit also stated that customers who are mistakenly identified as Japan residents can maintain their access if they update their KYC details before then. Procedures for Japan residents will be clarified later, but this tier is intended to ensure that customers can transition smoothly.

Also Read: Bybit Teams with Circle to Expand USDC Access and Strengthen Crypto Markets

Bybit Suspends Services and App Access in Japan

The rules for crypto exchanges operating abroad are getting tougher in Japan. In 2024, an amendment to the Financial Instruments and Exchange Act tightened rules on the trading of crypto derivatives, as well as increased fines imposed on unregistered operators of this kind of business.

Because of this, numerous crypto exchanges abroad are considering changing the way they do business in Japan.

Bybit had already removed its app from Apple and Google stores last year and suspended new registrants in October. Other major platforms, such as Binance, have taken similar actions.

For instance, Binance returned to Japan in August 2023 through a domestically registered entity called Binance Japan. Some market analysts believe that Bybit may be exiting Japan or may also intend to establish a locally compliant platform in the future.

Japan Exit Signals Major Shift for Traders

Bybit operates as the second-largest global trading platform in terms of trading volumes, with more than 70 million global users.

The decision by Bybit to withdraw from the Japanese market will impact many users, who may have to find alternative ways, such as relocating their assets, in order to continue trading.

The development shows just how important compliance is becoming in the global crypto market. Japan stands out as one of the toughest regulators.

Also Read: Bybit Relaunches UK Operations Following Two-Year Exit