Whilst the government is setting the UK up to be a hub for cryptocurrency, with regulatory sandboxes, favorable stances and regulation facilitating the introduction of assets like stablecoins, there are still limits to what the country will allow. A recent move to control marketing standards for crypto has, at least temporarily, led to one cryptocurrency exchange withdrawing its services from UK customers.
Based in Dubai, Bybit has been around since 2018 and, whilst the news that it is suspending operations in the UK might be seen as a negative, the announcement on the Bybit website states that the measure has been taken in order to ‘allow the company to focus its efforts and resources being able to best meet the regulations outlined by the UK authorities in the future’. Although this causes an inconvenience for UK users (new accounts will not be accepted from Oct 1st, deposits and many other services will cease on Oct 8th, accounts will be liquidated for withdrawal in Jan 2024), it seems that Bybit intends to return to the UK when it has put sufficient measures in place.
The rules that are coming into effect that have led to this response by Bybit state that any business promoting cryptoassets to a UK audience will be required to comply one of the following restrictions, no matter their jurisdiction:
With this in mind, the decision detailed in Bybit’s announcement, to ‘embrace the regulation proactively and pause our services in this market’ can be taken as a positive sign for the industry as global exchanges seek to do the right thing.
Alongside this, the announcement noted the following: ‘As crypto adoption continues to grow globally, it is Bybit's mission to deliver next level trading experiences to all crypto believers with the necessary guardrails in place.’. Perhaps Bybit has read the regulatory writing on the wall and discerned that only through compliance are crypto services ever going to achieve the growth and market that they are capable of. Regulation is important to ensure these ‘guardrails’ are in place for users and, though it has been slow to come to the industry, many are now realizing that the ‘wild west’ days of crypto are (hopefully) behind us. With regulation, crypto can shuck its image of outlaws and prospectors panning for gold in the hills and show its potential as the Silicon Valley of the future.
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By Matthew Warner