A public warning by the United Kingdom’s Financial Conduct Authority (FCA) preceded an announcement by popular crypto derivatives platform, Bybit that it would no longer service customers from the jurisdiction.
ByBit offers crypto-based derivative products that allowed customers to bet on cryptocurrencies’ price action without buying the underlying asset. Bybit is registered in the British Virgin Islands and only trails Binance and Huobi Global in terms of the daily derivatives trading volume.
In October, the FCA had announced a ban on selling such products to UK retail customers, citing the lack of “legitimate investment need” for retail consumers to hold or invest in them. Although that ban came into effect on January 6, Bybit had continued 'targeting UK customers' as per the FCA.
The FCA had also mandated all crypto-related firms operating in the UK to register with the agency, another condition that Bybit failed to fulfil.
Hence the FCA said in its warning statement dated Feb 24:
Almost all firms and individuals offering, promoting or selling financial services or products in the UK have to be authorised by us. This firm [ByBit] is not authorised by us and is targeting people in the UK. Based on the information we hold, we believe it is carrying on regulated activities which require authorisation.
In the aftermath of the FCA warning, Bybit told its UK customer base that it would no longer support users from the country. The move was said to comply with the FCA ban on crypto derivatives.
The platform will reject new signups using UK phone numbers or IP addresses. Additionally, existing ByBit users have until March 31 to close any positions they hold on the platform and withdraw their funds.
Worth noting is that UK customers who still choose to trade crypto-based derivatives do so at their own risk and apparently on a foreign platform, not under the FCA’s oversight.