Bybit, one of the world’s leading cryptocurrency exchanges, has announced that it will discontinue its services for Japanese residents.
The exchange will implement gradual account restrictions starting in 2026. This marks a withdrawal from one of Asia’s fastest-growing crypto markets.
Bybit to Phase Out Access for Japanese Residents
Bybit disclosed the decision through an official statement. The exchange noted that the step aligns with its efforts to comply with regulatory requirements in Japan.
“As part of our proactive efforts to comply with Japanese regulations, we have decided to discontinue services for residents of Japan and gradually implement account restrictions…If you’re a resident of Japan, please note that starting from 2026 your account will be subject to gradual restrictions,” the announcement read.
The platform, which serves around 80 million users worldwide, stated that affected users will receive follow-up updates detailing remediation steps. It also asked users who were incorrectly flagged to complete additional identity checks.
These users must finish Identity Verification Lv. 2 (POA/KYC2) by January 22, 2026. Failure to do so will result in their accounts being classified as Japan-based and subject to restrictions.
“Please update or complete your Identity Verification Lv. 2 (POA/KYC2) as soon as possible to ensure your continued access to bybit.com. We appreciate your prompt attention to this important matter and apologize for any inconvenience this may cause. We sincerely appreciate your understanding and support as we enhance our compliance with regulatory standards,” Bybit added.
This step builds on earlier measures. Previously, in October 2025, the exchange paused onboarding new users in Japan.
Japan’s Financial Services Agency (FSA) intensified its scrutiny of unregistered exchanges earlier in the year. In February 2025, the agency requested Apple and Google to suspend app downloads for five platforms operating without registration in Japan.
These included Bybit, MEXC Global, LBank Exchange, KuCoin, and Bitget. Apple complied by removing the apps from its App Store.
Japan’s Crypto Growth Paradox
Meanwhile, Japan remains an attractive market due to its advanced adoption of cryptocurrencies. Chainalysis’s report found Japan saw 120% growth in on-chain value received between June 2024 and June 2025. This rate led all major Asia-Pacific markets, outpacing Indonesia, South Korea, India, and Vietnam.
“Among APAC’s top five markets, Japan saw the strongest growth,” the report noted.
The country has made progress in the stablecoin space and integrated Bitcoin mining into its national grid. However, at the same time, regulators have been signaling tighter supervision of crypto lending and digital asset treasury (DAT) firms.
Taken together, these developments suggest that Japan is adopting a dual-track approach: encouraging technological adoption and infrastructure integration while tightening regulatory controls to mitigate systemic and consumer risks.
Still, regulatory complexity continues to influence investor behavior. A survey by financial advisory firm 400F, involving 894 Japanese participants, found that tax complexity prompted 22.2% of former crypto investors to exit the market, slightly more than the 19.4% deterred by price volatility. Current holders also ranked volatility (61.4%) and tax obligations (60%) as top concerns.
