Bybit, a digital asset exchange, citing the UK’s impending fresh marketing regulations as a setback to its operations, is ceasing new account applications from UK residents as of October 1. Expected to impact cryptocurrencies across the board, the new guidelines released by the UK’s Financial Conduct Authority (FCA) ban incentives such as referral bonuses and are slated for enforcement from October 8.
In aligning itself with the forthcoming FCA rules, Bybit is responding proactively by suspending services starting October 8. An official press statement reveals the exchange’s commitment to ensuring that existing UK users “will no longer be able to make any new deposits, create new contracts, or increase any of their existing positions for all products and services” from the same date. Meanwhile, users are being urged to unwind their positions neck and neck with the impending regulatory change, with a deadline set for January 8, 2024.
Observers note that the FCA’s actions ring an alarm, highlighting its commitment to making crypto businesses comply with its new marketing rule. The FCA maintains that the move is deemed “clear, fair and honest,” according to the Director of Consumer Investments, Lucy Castledine. Furthermore, the timeline affords firms the opportunity for adequate business and system adaptations to the new rules.
The prevalence of global crypto businesses facing regulatory issues, such as FTX, has fuelled a global regulatory resolve to enforce stringent rules on crypto firms. Despite its exit from the UK market, Bybit hints at a continued global growth trajectory, promising an assurance of comprehensive ‘guardrails’ for all crypto believers.
In what seems to be the final straw, Bybit’s decision comes in the wake of a ‘final warning’ from the FCA to all crypto businesses about a forthcoming financial promotions regime. The implication of this is that crypto assets promoted to UK consumers will come under stricter scrutiny, rendering a more balanced and consumer-focused competitive atmosphere for firms.
The action, however, has led to a decline in engagements between overseas crypto asset firms and the FCA, as observed in their recent survey where a discouraging 24 out of 150 firms responded. The penalty for unregistered firms promoting crypto assets to UK users post-regime reads an intimidating two years imprisonment, unlimited fines, or both. As a reinforcement, the financial regulator has equally cautioned intermediaries such as social media platforms, search engines, app stores and payment firms against enabling illegally promoted material by unregistered crypto businesses targeting UK users.
Source: Cryptonews
