Bybit, one of the world's leading cryptocurrency exchanges, announced that it will suspend services for users in Japan.
The exchange will implement gradual restrictions on accounts starting from 2026. This step means withdrawing from one of Asia's fastest-growing cryptocurrency markets.
Bybit Gradually Ending Access for Users in Japan
Bybit announced this decision with an official statement. The cryptocurrency exchange stated that the step taken is in line with efforts to comply with regulatory requirements in Japan.
Bybit's announcement stated: 'As part of our active efforts to comply with regulations in Japan, we have made the decision to suspend our services for residents in Japan and implement gradual restrictions on accounts... If you reside in Japan, please note: starting from 2026, your account will be gradually restricted.'
The platform, which serves approximately 80 million users worldwide, announced that affected users would be informed about the process and detailed on what steps they need to take. Additionally, it requested users who were misclassified to complete additional identity verification processes.
These users must complete the Identity Verification Level 2 (POA/KYC2) process by January 22, 2026. Otherwise, these accounts will be classified as Japan-based and subjected to restrictions.
Bybit also stated: 'To ensure uninterrupted access to bybit.com, please update or complete your Identity Verification Level 2 (POA/KYC2) process as soon as possible. We thank you for your prompt attention to this important matter and apologize for any potential disruptions. We sincerely appreciate your understanding and support as we strengthen our compliance with regulatory standards.'
This step is a continuation of some previous measures. The exchange had suspended new user acquisitions in Japan in October 2025.
Japan's Financial Services Agency (FSA) had increased its oversight of unregistered cryptocurrency exchanges at the beginning of the year. In February 2025, the agency requested the removal of the applications of five platforms operating without registration in Japan from Apple and Google stores.
Among these platforms were Bybit, MEXC Global, LBank Exchange, KuCoin, and Bitget. Apple complied with this request and removed the applications from the App Store.
Japan's Cryptocurrency Growth Paradox
On the other hand, Japan continues to be an attractive market thanks to its advanced cryptocurrency adoption. According to Chainalysis's report, Japan saw a 120% increase in on-chain transaction value from June 2024 to June 2025. Japan's growth rate outpaced Indonesia, South Korea, India, and Vietnam in the Asia-Pacific region.
The report shared the information that 'the strongest growth was observed in Japan among the top five major markets in APAC.'
The country has made significant progress in the stablecoin sector and integrated Bitcoin mining into its national grid. However, during the same period, regulators signaled tighter oversight for cryptocurrency lending and digital asset treasury (DAT) companies.
All these developments indicate that Japan is pursuing a dual strategy: on one hand, supporting the spread of technology and infrastructure, while on the other hand, tightening regulatory controls to mitigate systemic and individual risks.
Still, the complexity of regulations significantly affects investor behavior. According to a survey conducted by the financial consulting firm 400F with 894 Japanese investors, tax complexity caused 22.2% of former cryptocurrency investors to exit the market. According to the same survey, the proportion of those who exited the market due to price volatility remained at 19.4%. For those still holding cryptocurrencies, volatility (61.4%) and tax obligations (60%) stand out as the biggest concerns.
