Bybit Plagued by Notcoin Woes, Regulatory Scrutiny, and More: What Else Can Go Wrong?

The cryptocurrency community is abuzz with anticipation as Notcoin (NOT), a tap-to-earn game and token integrated as a Telegram Mini App and built on The Open Network, finally makes its debut.

With early adopters and investors showing enthusiasm for its potential to disrupt the market, many see it as a viable alternative to established cryptocurrencies like Bitcoin and Ethereum.

Initially slated for release on 20 April alongside the Bitcoin halving, the launch faced delays before finally commencing trading on 16 May at 12 pm UTC.

Trading for NOT began today across multiple exchanges, including Bybit, Binance, OKX, Kucoin, Gate.io, Bitget, Bitfinex, among others.

At launch, the total and circulating supply of $NOT stood at 102,719,221,714 tokens.

Notably, 100% of these tokens were made available upon listing, though phased claims and allocations may delay immediate market availability.

The initial market cap of NOT stood at $984 million, but as per CoinMarketCap, it currently sits at $657 million, marking a decline of approximately 55%.

Its current trading price stands at $0.006398 while its all-time-high (ATH) is at $0.01445 and all-time-low (ATL) is at $0.006169 as per CoinMarketCap.

Bybit Stumbles on Notcoins Launch Day

Bybit found itself in the midst of a contentious situation surrounding the initial listing of NOT.

The issue stemmed from not all users receiving their airdrop before the market opening, placing them at a disadvantage compared to others who did.

Consequently, the trading price on Bybit was notably lower than that on some other exchanges.

Interestingly, Bybit had previously included Notcoin on its pre-market trading platform back in March, offering its customers access to the meme coin before its spot trading listing.

Presently, traders can engage in buying, selling, and trading NOT tokens against the USDT stablecoin on Bybit.

Deposits and withdrawals for the token are processed through the TON network.

In anticipation of trading commencement, CEO Ben Zhou addressed the Notcoin airdrop balance reflection issue on X emphasizing the diligent efforts of the Bybit team to resolve it.

Zhou also announced that the exchange is in the process of devising a compensation strategy for the 320,000 users impacted by irregular Notcoin account balances on the day of its debut.

He asserted that 70% of eligible users had already received their credits before the market opening.

Suffice to say, not all users were happy.

One user wrote and alleged:

“Binance and Bitget listed [NOT] at 0.01 while Bybit listed at 0.0007. That is why they are talking about compensation to silence people."

Despite that, others had a different story to tell, stating that NOT was listed on Bybit for $0.03 instead, a far cry from the alleged $0.0007.

Information from Binance and Bitget indicates that Notcoin experienced volatile trading activity following its launch, reaching a low of $0.000779 per token and a high of $0.035 within the day.

However, data from Bybit only reflects a peak of $0.01 for the same asset.

French Regulator "Reminds" Bybit of its Blacklist Status

France's securities regulator, the Autorité des Marchés Financiers (AMF), has issued a renewed caution to cryptocurrency investors regarding Bybit's status within the country.

In a notice dated 16 May, the AMF reminded the French public of Bybit's blacklisted status, highlighting its operation as an unregistered crypto platform conducting illegal activities by offering digital asset services on behalf of third parties.

The regulator emphasized its authority to block Bybit's website for its unlawful operations in France.

Bybit's lack of registration as a digital asset service provider (DASP) means it is operating illegally in France, as per the AMF's standards.

The financial regulator stated:

“The Autorité des Marchés Financiers (AMF) is calling on retail investors to exercise the utmost vigilance with regard proposal investments made to the public residing in France by the digital asset trading platform BYBIT. BYBIT is not authorised to provide its digital asset services in France.”

The AMF stated that Bybit has been on the blacklist since 20 May 2022 due to its failure to comply with existing French regulations.

The notice suggests potential enforcement actions against the platform, with the AMF asserting its authority to take legal measures, including blocking the platform's website, under the terms of the Monetary and Financial Code.

Retail investors are cautioned to take precautionary steps to prevent any potential disruption to their access to assets.

Global Regulatory Scrutiny

The AMF's cautionary message aligns with a previous warning issued by Hong Kong's financial regulator.

On 14 March, the Securities and Futures Commission (SFC) included Bybit in its roster of suspicious crypto exchanges, emphasizing its lack of licensing.

The regulator wrote:

“The Securities and Futures Commission (SFC) today warns the public of an unlicensed virtual asset trading platform (VATP) known as Bybit, which offers trading services in crypto-related products in a number of jurisdictions."

The warning list comprises 11 products provided by the Bybit exchange, spanning from Bybit Futures and Bybit Options to Bybit Leveraged Tokens, Dual Assets, Bybit Lending, Bybit Wealth Management, and more.

The regulator added:

“The SFC is concerned that these products have also been offered to Hong Kong investors and wishes to make it clear that no entity in the Bybit group is licensed by or registered with the SFC to conduct any 'regulated activity' in Hong Kong.”

Notably, Bybit's regulatory challenges are not limited to France and Hong Kong.

Last year, the platform withdrew its services from Canada and the United Kingdom (UK), attributing the decision to mounting regulatory pressures.

In a statement dated 22 September 2023, Bybit declared its intention to suspend services for UK residents, which commenced on 1 October with the cessation of new account applications.

Subsequently, on 8 October, the suspension extended to new deposits, new contracts, and alterations to positions for existing users.

Prior to that in a blog post dated 30 May, Bybit announced its decision to halt the acceptance of new account opening applications from Canadians, effective 31 May.

Existing users of the crypto exchange were granted a window until 31 July to make deposits and "increase any of their existing positions" before these services are phased out.

After 30 September, any remaining positions were liquidated.

Bybit did not provide specific details regarding the market exit, attributing it solely to "recent regulatory developments" in Canada.

Then in an April warning letter last year, Japan's Financial Services Agency (FSA) highlighted several foreign cryptocurrency exchanges, including Bybit, MEXC Global, and Bitget, for operating in the country without proper registration, thus contravening Japan's fund settlement laws.

The FSA emphasized that these exchanges had violated regulations governing crypto asset exchange business by lacking the necessary registration.

Notably, the regulator cautioned that the list of unregistered traders may not comprehensively capture all unregistered businesses currently operating in Japan.

In Forbes' latest finding of The World's Best Crypto Exchanges And Marketplaces, under the top 20, Bybit is not in the list.

Coinbase emerges as the top contender among the 20 most reputable platforms, underscoring the importance of prudence in an industry that demands careful navigation.

Source: Forbes's The World's Best Crypto Exchanges And Marketplaces

Bybit Embodying the Mindset "What Doesn't Kill Me Makes Me Stronger”

Bybit made headlines on 28 March this year with the official unveiling of Bybit.nl, its digital asset platform tailored for the Netherlands.

This regulated local trading platform offers Dutch users seamless access to cryptocurrency trading opportunities and educational materials.

According to a spokesperson for Bybit, Dutch users can promptly engage in depositing, withdrawing, trading, and utilising staking features via Bybit card on Bybit.nl.

Before that, on 29 May 2023, the exchange revealed its pre-approval from Kazakhstan's Astana Financial Services Authority (AFSA) to function as a digital asset trading facility and custody services provider within the Astana International Financial Centre (AIFC).

Zhou expressed confidence in the "promising potential" of the Commonwealth of Independent States (CIS) as a region for crypto industry expansion.

Bybit's "in-principle" approval entails adherence to pre-conditions, paving the way for permanent authorisation to serve local clientele once the application process concludes.