Bybit set UK withdrawal as new promotion rules approached

Bybit announced on September 22, 2023 that it would suspend its products and services for customers in the United Kingdom, linking the decision to the Financial Conduct Authority’s approaching cryptoasset financial-promotion regime.

The exchange established a phased withdrawal rather than an immediate shutdown. Bybit said it would stop accepting applications from identified UK residents or citizens at 08:00 UTC on October 1. Beginning at 08:00 UTC on October 8, existing UK customers would be unable to make new deposits, create new contracts or increase existing positions across its products and services.

Existing customers would still be able to reduce or close positions and withdraw funds. Bybit also said any positions remaining after 08:00 UTC on January 8, 2024 would be closed, with the resulting funds made available for withdrawal. Those dates were announced plans as of September 22, not evidence that each later step had already occurred.

A marketing regime with operational consequences

The FCA had published Policy Statement PS23/6 in June 2023. Its rules were scheduled to take effect on October 8 and applied to firms marketing qualifying cryptoassets to UK consumers regardless of where the firm was based or what technology it used.

The framework classified qualifying cryptoassets as restricted mass-market investments. It subjected promotions to the requirement that they be fair, clear and not misleading while adding measures including prominent risk warnings, restrictions on incentives, a 24-hour cooling-off period for first-time buyers, client categorization and appropriateness assessments.

The underlying legal perimeter was broader than conventional paid advertising. Firms wishing to communicate cryptoasset promotions legally needed to use an available route: communication by an authorized person, approval by an authorized person, communication by a cryptoasset business registered with the FCA under the money-laundering regulations, or reliance on an applicable exemption.

Bybit described its suspension as a step toward compliance and said the pause would let it concentrate resources on meeting UK requirements in the future. That wording did not establish whether the exchange had sought authorization, an approval arrangement or another lawful route. It also did not establish that the suspension would be permanent.

Why the announcement mattered

The September 22 decision demonstrated that a communications regime could reshape product availability even without amounting to comprehensive regulation of crypto trading itself. An offshore platform could not treat its location outside Britain as sufficient insulation when its website, application or other communications reached UK consumers.

For customers, the practical distinction between marketing regulation and market access was therefore narrow. Bybit’s announced restrictions covered deposits, contracts and position increases, translating a rule concerned with promotions into a planned reduction in what existing users could do on the platform.

The decision also arrived during a period in which the FCA was publicly pressing crypto firms to prepare for the October 8 deadline. Bybit’s response was company-specific; it did not prove that every offshore exchange would leave Britain or that the FCA had ordered Bybit to suspend service. The surviving records support a voluntary suspension attributed by Bybit to the new regulatory framework, not an individualized enforcement action.

The limits of the event-day record

No verified event-day dataset establishes how many UK customers, deposits, contracts or positions were affected. Bybit did not disclose a UK customer count or quantify the financial effect in the cited announcement. Coinburn therefore makes no claim about market share, trading volume, asset prices or a measurable market reaction.

What September 22 established was narrower but institutionally important: a major offshore exchange had set dated restrictions for UK customers because of rules that would apply across borders from October 8. Whether Bybit eventually returned under a compliant structure remained unresolved in the event-day record.