Crypto Exchange Bybit Suspends Trading for UK Customers Due to FCA Derivatives Ban
Crypto exchange platform Bybit is set to cease operations for UK-based customers citing the recent regulations issued by the regulator in regards to crypto derivatives.
In an official announcement, the firm stated that it would end its services to UK customers on March 31. The firm said the decision was reached in efforts to adhere to the regulations issued by the Financial Conduct Authority (FCA). The exchange said,
“To comply with the Financial Conduct Authority’s (FCA) ban on crypto derivatives, Bybit will cease to provide services to customers from the United Kingdom.”
The firm is now advising its customers to close any positions and withdraw their entire funds before month-end.
Derivatives are financial instruments that monitor the prices of a given asset which in this case is cryptocurrency. Clients are not supposed to have any spot crypto when purchasing these products. Usually, high leverage is used for these products highly popular in the crypto space.
Last year, the UK financial regulator, FCA, prohibited the trading of crypto derivatives and exchange-traded notes (ETNs) in a move that sent shock waves in the market. The regulator said that these products were not suitable for retail clients as the underlying assets are highly volatile in nature.
The regulator started implementing the ban in January this year, but various firms such as Bybit still went on with the basic operations to the existing customers. However, this is set to change as customers based in the UK will not be permitted to create new accounts. Bybit stressed that sign-ups from UK phone numbers as well as IP addresses are henceforth restricted.
Bybit is ranked as one of the largest crypto derivatives in the world. CoinGecko reports that the exchange has transacted above $11 billion over the past day for just ten trading pairs.
The close of operations for UK-based clients is a major blow to the company as more than 5% of all the site’s visitors are from the UK.
Noteworthy, the firm stated that it was in talks with the UK authorities to find a solution for the existing and new clients.