Crypto exchange ByBit announced its exit from the U.K. market after the imposition of stricter rules by the U.K. Financial Conduct Authority.
However, CEO Ben Zhou denied all exit rumors early this week and stated that it is still exploring all options to stay in the country.
What Happened: The FCA announced new crypto marketing rules to be enforced starting Oct.8.
“In light of the UK Financial Conduct Authority’s introduction of new rules regarding marketing and communications by crypto businesses as outlined in the June 2023 Policy Statement (PS23/6) entitled ‘Financial Promotion Rules for Crypto assets,’ Bybit has made a choice to embrace the regulation proactively and pause our services in this market,” said the company.
Amongst the new rules is a cooling-off period for first-time investors, which will make marketing of crypto products more transparent and accurate. Any marketing should contain prominent risk warnings and not inappropriately incentivize people to invest.
The new rules ban any incentives like a “refer a friend” bonus. Non-compliance with the rules will be taken as a criminal offense and will be punishable with fines and imprisonment.
New rules could imply that only having a website accessible to U.K. users will also be considered a promotion.
What Will Happen: New U.K. user account applications will no longer be accepted from Oct. 1. From Oct. 8, existing users will be prohibited from making any new deposits, creating new contracts, or increasing any of their existing positions for all products and services.
“The users will only be able to reduce or close their positions and withdraw their funds from the platform until Jan. 8, 2024. After that, any remaining funds will be automatically liquidated,” said Benzinga.
While there is no clarity on the suspension period or any U.K. return probabilities, ByBit states “the suspension will allow the company to focus its efforts and resources on being able to best meet the regulations outlined by the U.K. authorities in the future.”
In June 2023, ByBit grabbed the license to operate a crypto exchange and provide custody services in Cyprus.
Other major platforms, including OKX and Binance, are also reconsidering their operational strategies in the country amid stricter rules. Zhou indicated as reported by The Block. Crypto exchange CoinCorner has also announced to end its affiliate program for U.K. customers on Oct. 1. PayPal and Luno also announced halting some of its crypto services in the U.K.
© 2023 Zenger News.com. Zenger News does not provide investment advice. All rights reserved.
Produced in association with Benzinga
Edited by Judy J. Rotich and Newsdesk Manager
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