Crypto exchange Bybit has announced plans to restrict access for users based in Japan, as regulatory scrutiny tightens and authorities step up enforcement against unregistered digital asset platforms operating in the country.
The move follows growing pressure from Japan’s Financial Services Agency (FSA), which has repeatedly warned overseas cryptocurrency exchanges against offering services to Japanese residents without proper registration. Bybit is not licensed under Japan’s Payment Services Act, a requirement for any platform facilitating crypto trading for local users.
According to industry sources, the restrictions will be rolled out gradually and are expected to limit new account registrations from Japan while placing constraints on certain services for existing users. This may include reduced access to derivatives trading, promotions, and other high-risk products that Japanese regulators have long sought to curb.
Japan maintains one of the world’s most stringent crypto regulatory regimes, shaped by past exchange collapses and consumer losses. Regulators require exchanges to meet strict standards on custody, capital adequacy, anti-money laundering controls, and consumer protection. Platforms that fail to comply face warnings, blacklisting, or forced exit from the market.
Bybit’s decision reflects a broader trend among global crypto exchanges reassessing their exposure to tightly regulated jurisdictions. In recent years, Japan’s FSA has issued multiple public notices naming foreign exchanges accused of illegally soliciting Japanese users, increasing reputational and legal risks for non-compliant firms.
The exchange has signaled that the restrictions are part of a wider compliance strategy as it prioritises markets where it holds clear regulatory approval. While Bybit has not ruled out pursuing registration in Japan in the future, doing so would require significant operational restructuring and ongoing regulatory oversight.
For Japanese traders, the move further narrows the field of available offshore platforms, reinforcing the government’s push to funnel crypto activity toward licensed domestic exchanges. Analysts say the development underscores how regulatory fragmentation continues to shape access, competition, and growth in the global digital asset market.
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