Bybit suspends new user registration in Japan in line with Financial Services Agency regulations

Bybit, the world’s second-largest cryptocurrency exchange by trading volume, has announced that it will suspend new user registration in Japan from October 31st in order to comply with new regulations from Japan’s Financial Services Agency (FSA).

The company said in a statement on Wednesday that the move is part of an “aggressive approach” to align with Japan’s new regulatory framework for digital assets.

“It has always been Bybit’s commitment to operate responsibly, in accordance with local laws and regulatory expectations,” the exchange said.

Existing Japanese customers are currently unaffected and all current services will continue to operate. Bybit said it will share further updates as discussions with regulators progress.

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Japan’s Financial Services Agency considers allowing banks to hold Bitcoin

Last week, it was reported that the Financial Services Agency is considering regulatory reforms that would allow banks to acquire and hold virtual currencies such as Bitcoin (BTC) and operate licensed virtual currency exchanges.

The proposal will be considered at an upcoming meeting of the Financial Services Board, with the aim of aligning digital assets with traditional products such as stocks and government bonds.

The FSA will design a framework to address risks associated with cryptocurrency volatility, potentially requiring banks to meet new capital and risk management standards before holding digital assets. The move could open the door to broader institutional implementation within Japan’s regulated banking sector.

Cointelegraph reached out to Bybit for comment, but did not receive a response in time for publication.

Related: Japanese megabanks to jointly issue yen-pegged stablecoin: Report

Japanese regulations encourage cryptocurrency outflows

In July, Maksim Sakharov, co-founder and CEO of decentralized on-chain bank WeFi, told Cointelegraph that the real reason Japanese crypto innovation is moving away from Japan is regulatory bottlenecks, not taxes.