Bybit Withdraws from French Market Amid Regulatory Pressures and MiCA Implementation

Bybit, a leading cryptocurrency exchange, announced its withdrawal from the French market due to "regulatory developments." Starting August 13, French users will only be able to withdraw existing funds, as all accounts will be restricted to a "close-only" mode, prohibiting new positions or product purchases.

Regulatory Challenges and AMF Warnings

The French market has been a contentious area for Bybit. In May, the Autorité des Marchés Financiers (AMF), France's financial regulatory authority, flagged Bybit for operating without proper registration. The exchange was blacklisted in 2022 for "non-compliance with current French regulations," and the AMF reiterated that Bybit had not registered as a Digital Asset Service Provider (DASP), making its operations in France illegal.

MiCA and European Regulatory Landscape

Bybit's exit from France coincides with the broader implementation of the Markets in Crypto-Assets (MiCA) regulation across Europe. Introduced on September 24, 2020, and ratified by the European Parliament in April 2023, MiCA establishes comprehensive guidelines for crypto providers and stablecoin issuers. The regulation, which includes strict capital and liquidity requirements for stablecoins, began taking effect in June 2023, with additional provisions set to be enforced from December 30, 2024. These will cover marketing communications, anti-money laundering measures, and enhanced consumer protection protocols.

Bybit's Global Operations

Bybit has faced regulatory challenges in other regions as well. The exchange exited the Canadian and UK markets in 2023 and currently does not serve users in the US, China, Hong Kong, Singapore, and Canada. It also restricts access in countries like North Korea, Cuba, Iran, Uzbekistan, Russian-controlled regions of Ukraine, and Syria. Despite these restrictions, Bybit has maintained significant trading volume, becoming the second-largest exchange by trading volume behind Binance, with $5.5 billion traded on a recent Thursday compared to Binance's $11.4 billion.

Future Prospects

Bybit's decision to withdraw from the French market and its efforts to comply with evolving regulatory landscapes underscore the challenges and complexities facing cryptocurrency exchanges globally. The exchange's commitment to providing a compliant trading environment, as evidenced by its recent launch in the Netherlands, indicates its ongoing efforts to adapt and grow within the rapidly changing regulatory framework.