Bybit to Shut UK Operation, Cites FCA’s Crypto Derivatives Ban

Bybit, one of the leading cryptocurrency derivatives exchanges, announced on Friday its decision to wrap up its services for the United Kingdom-based clients from March 31, 2021.

“If you are either a U.K. resident or citizen, please close all your positions and withdraw all account balances by 8 AM UTC, March 31, 2021,” the Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term noted. “Thereafter, customers located in or are residents of the U.K. will be restricted from accessing or performing any trading activities on Bybit.”

The decision came as the exchange has to comply with the local regulations against the retail sale of cryptocurrency derivatives products that was imposed by the Financial Conduct Authority (FCA) Financial Conduct Authority (FCA) The Financial Conduct Authority (FCA) is the largest financial regulator for all financial markets in the United Kingdom (UK).The UK regulator is responsible for the conduct of firms authorized under the Financial Services and Markets Act 2000. Moreover, the FCA is also responsible for the regulation of behavior in retail and wholesale financial markets, supervision of the trading infrastructure that supports those markets, and the prudential regulation of firms not regulated by the PRA. Its rol The Financial Conduct Authority (FCA) is the largest financial regulator for all financial markets in the United Kingdom (UK).The UK regulator is responsible for the conduct of firms authorized under the Financial Services and Markets Act 2000. Moreover, the FCA is also responsible for the regulation of behavior in retail and wholesale financial markets, supervision of the trading infrastructure that supports those markets, and the prudential regulation of firms not regulated by the PRA. Its rol Read this Term).

Risk vs Profit

Established in 2018, Bybit became one of the top cryptocurrency exchanges handling billions of dollars in daily volume. The exchange consistently maintained its position among the top five global crypto derivatives exchanges, as per Coinmarketcap.com data.

In general, derivatives actively track the price of an underlying asset. Traders only trade the contracts without owning the real asset. These instruments are very popular due to the possibility of gaining a massive profit when compared to standard spot trading.

The British regulator’s ban on the retail crypto derivatives products was imposed on January 6, calling these products too risky for retail traders. The decision prompted many UK-based brokerages to stop offering leveraged crypto products. Most recently, IG Group removed all cryptocurrency contracts for difference (CFDs) instruments from its offerings to UK traders.

Though Bybit does not offer any trading opportunities directly with the pound sterling, its exit from the UK market is justified given the possibility of a regulatory backlash against the exchange.