Bybit, one of the leading cryptocurrency derivatives exchanges, announced on Friday its decision to wrap up its services for the United Kingdom-based clients from March 31, 2021.
“If you are either a U.K. resident or citizen, please close all your positions and withdraw all account balances by 8 AM UTC, March 31, 2021,” the exchange noted. “Thereafter, customers located in or are residents of the U.K. will be restricted from accessing or performing any trading activities on Bybit.”
The decision came as the exchange has to comply with the local regulations against the retail sale of cryptocurrency derivatives products that was imposed by the Financial Conduct Authority (FCA).
Risk vs Profit
Established in 2018, Bybit became one of the top cryptocurrency exchanges handling billions of dollars in daily volume. The exchange consistently maintained its position among the top five global crypto derivatives exchanges, as per Coinmarketcap.com data.
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In general, derivatives actively track the price of an underlying asset. Traders only trade the contracts without owning the real asset. These instruments are very popular due to the possibility of gaining a massive profit when compared to standard spot trading.
The British regulator’s ban on the retail crypto derivatives products was imposed on January 6, calling these products too risky for retail traders. The decision prompted many UK-based brokerages to stop offering leveraged crypto products. Most recently, IG Group removed all cryptocurrency contracts for difference (CFDs) instruments from its offerings to UK traders.
Though Bybit does not offer any trading opportunities directly with the pound sterling, its exit from the UK market is justified given the possibility of a regulatory backlash against the exchange.