Crypto exchange Bybit will stop accepting new user registrations in Japan from Oct. 31. The exchange said it is adjusting to emerging crypto regulations in Japan from the Financial Services Agency (FSA). Bybit called the step a way to align with the country’s developing digital assets framework. Existing Japanese users can still use all current services for now. Bybit said it will give more updates when talks with the regulator move forward.
Bybit stated,
“It has always been Bybit’s commitment to operate responsibly and in compliance with local laws and regulatory expectations.”
The statement shows the pause is tied to Japan crypto regulation, not to its global operations. Bybit is the second largest crypto exchange by trading volume, so a pause in Japan shows how strict Japan FSA crypto rules are becoming for offshore platforms.
At this stage, the Bybit pause affects only new users in Japan. Current Japanese customers can keep trading, depositing, and withdrawing. That structure lets Bybit stay in the Japanese market while it adapts its onboarding, disclosures, and compliance to Japan’s digital assets rules.
Japan FSA Crypto Rules for Banks and Licensed Exchanges
The Japan FSA is also studying reforms that may let Japanese banks hold Bitcoin and run licensed crypto exchanges. The proposal will go to the Financial Services Council for review. The aim is to place crypto assets in the same regulated basket as stocks and government bonds. This is part of a wider move to build a unified Japan digital assets framework.
Because Bitcoin and other crypto assets are volatile, the FSA plans to design rules on capital requirements, risk management, and balance sheet exposure before banks can hold crypto. The framework may require banks to meet new standards before offering crypto trading or crypto custody. This shows that Japan wants crypto activity to stay inside licensed, supervised, and capitalized entities.
These steps explain why exchanges like Bybit must align with Japan crypto regulations before they add more local users. Japan’s system asks offshore platforms to meet domestic rules, not just global ones. Therefore, a temporary pause on new accounts is one way for Bybit to stay compliant while rules are still “emerging.”
Japan Crypto Regulation Still Causes Industry Outflow
In July, Maksym Sakharov, co-founder and CEO of WeFi, said Japan’s regulatory bottlenecks are pushing crypto activity offshore. He said the problem is not only taxes. He called Japan’s process “slow, prescriptive, and risk-averse.” He added that even if Japan keeps a 20% flat tax on crypto gains, startups will still leave if approvals stay slow. That comment matches the current environment of tight Japan FSA crypto oversight.
This environment explains why several projects and exchanges choose to pause, restructure, or limit services when they deal with Japan crypto licensing. Long approval times, strict reporting, and conservative risk standards make the market safe but also heavy. As a result, liquidity often moves to other Asian centers with faster crypto rules.
At the same time, the FSA’s work on letting banks hold Bitcoin shows Japan is not blocking crypto. Instead, it is trying to keep digital assets in Japan under clear, written, and enforceable rules. That is why licensed exchanges, banks, and custodians are central to the model.
Disclosure:This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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Tatevik Avetisyan is an editor at Kriptoworld who covers emerging crypto trends, blockchain innovation, and altcoin developments. She is passionate about breaking down complex stories for a global audience and making digital finance more accessible.
📅 Published: October 30, 2025 • 🕓 Last updated: October 30, 2025
