Bybit will begin restricting access to its platform for residents of Japan from next year as it moves to align more closely with the country’s financial regulations.

The exchange, one of the largest globally by trading volume, attributed this step as a compliance measure rather than a sudden exit, signaling a controlled wind-down of Japanese exposure.

"As part of our proactive efforts to comply with Japanese regulations, we have decided to discontinue services for residents of Japan and gradually implement account restrictions," it announced.

Japan’s Strict Rules Push Exchanges to the Edge

Japan operates one of the most demanding regulatory regimes for digital asset trading, with exchanges required to register with the Financial Services Agency and comply with rules on customer protection, asset segregation and anti-money laundering.

Platforms that fail to meet these standards often face pressure to shut down operations or leave the market entirely. Authorities plan to go further by requiring local cryptocurrency platforms to maintain liability reserves that can absorb losses from hacks and other operational failures.

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That measure would place additional capital and risk-management obligations on exchanges and bring them closer to the framework that already applies to traditional securities firms.

In its notice to users, Bybit links the planned restrictions directly to Japanese requirements and presents the shift as part of efforts to comply with local rules. The language indicates that the exchange prefers to limit services in advance instead of facing enforcement action once new obligations take full effect.

Bybit says it will communicate with affected customers as the timetable becomes clearer, suggesting a phased process rather than an abrupt shutdown. That approach aims to reduce disruption for users while the platform adjusts its exposure to Japan’s tightening regulatory environment.

Japan Retreat Follows UK Return

In October, Bybit said it would suspend onboarding new users and that it will affect both Japanese residents and nationals. The timing of the decision stands out because it comes only days after Bybit confirmed it had returned to the U.K. market, about two years after tougher rules on crypto marketing and promotions forced it out.

The exchange has re-entered Britain under a structure designed to fit within the Financial Conduct Authority’s regime, underscoring its willingness to adapt when it decides a market remains strategically important.