Why Has Bybit Returned to the UK Crypto Market After a Two-Year Hiatus?

Bybit has resumed operations in the UK after a two-year absence, now offering 100 cryptocurrency trading pairs to UK customers. This return follows its registration with the UK Financial Conduct Authority (FCA) under updated regulatory requirements, signaling a notable shift in how crypto exchanges engage with increasingly stringent compliance frameworks.

What happened

Bybit, a major global crypto exchange, exited the UK market in late 2023 amid heightened FCA enforcement actions targeting crypto firms for compliance failures. The FCA had intensified its regulatory scrutiny, particularly focusing on anti-money laundering (AML) and know-your-customer (KYC) obligations, and since January 2021, it has banned the sale of crypto derivatives to retail consumers.

Following a two-year hiatus, Bybit has officially re-entered the UK market, now registered with the FCA as a cryptoasset business in compliance with the UK’s Money Laundering Regulations. This registration is a prerequisite for operating legally within the UK crypto sector. Bybit’s UK offering now includes 100 crypto trading pairs, although the specifics of its product mix, especially regarding derivatives, remain unclear.

Bybit has publicly highlighted its enhanced compliance framework and investments in regulatory technology as key enablers for its return. Industry sources interpret this move as a broader indication that major crypto exchanges are adapting to stricter regulatory environments rather than retreating from them. The FCA’s evolving approach—from imposing outright bans on certain products to providing clearer compliance pathways—may have encouraged Bybit to re-engage with the UK market under a more structured regulatory framework.

Some analysts, however, also point to competitive pressures and the attractiveness of the UK’s sizable crypto market as additional drivers behind Bybit’s decision to return, beyond regulatory adaptation alone.

Why this matters

Bybit’s re-entry into the UK market under FCA registration reflects a significant development in the crypto industry’s relationship with regulation. It suggests that rather than avoiding regulated markets, major crypto players are increasingly investing in compliance infrastructure to meet enhanced regulatory demands. This shift could contribute to greater market stability and consumer protection in a sector often criticized for lax oversight.

The FCA’s regulatory tightening, including AML and KYC enforcement and the ban on crypto derivatives for retail clients, has reshaped the operational landscape for crypto firms. Bybit’s return under these conditions signals that the FCA’s approach—balancing restrictions with clear compliance pathways—might be effective in encouraging legitimate market participation while mitigating risks.

Furthermore, Bybit’s emphasis on regulatory technology investment highlights a broader industry trend toward embedding compliance into business models, potentially setting a precedent for other exchanges. The UK market’s size and regulatory clarity appear to remain important factors for firms willing to navigate stricter regimes, reinforcing the UK’s role as a key jurisdiction in global crypto trading.

What remains unclear

Several important questions remain unanswered based on the available information. The detailed nature of Bybit’s compliance enhancements, including how they materially differ from previous frameworks that led to its 2023 exit, has not been disclosed. Without independent audits or third-party verification, the robustness of these compliance measures cannot be independently assessed.

It is also unclear how Bybit plans to operate within the FCA’s ban on the sale of crypto derivatives to retail consumers, given that derivatives have been a significant part of its product offerings globally. The specifics of Bybit’s UK product mix and whether it has adjusted its offerings to comply fully with FCA restrictions are not publicly detailed.

Additionally, the FCA’s internal evaluation process that led to Bybit’s registration has not been made public, leaving open questions about regulatory standards and benchmarks applied in approving Bybit’s return.

Finally, there is no available data on Bybit’s UK user base or trading volumes before and after its hiatus, making it difficult to assess the commercial impact of its return or to compare market share dynamics. The broader crypto industry’s perspective on the UK regulatory environment following Bybit’s re-entry is also not addressed in current reports.

What to watch next

Disclosures from Bybit detailing the specific compliance measures and regulatory technologies implemented to meet FCA standards.
Clarification on how Bybit’s product offerings in the UK align with FCA restrictions, particularly regarding crypto derivatives and retail client access.
Monitoring FCA communications or updates on its assessment process and ongoing regulatory engagement with Bybit and similar firms.
Data releases or analysis on Bybit’s UK trading volumes, user base growth, and market share evolution post-return.
Industry responses from other major crypto exchanges regarding the UK regulatory environment in light of Bybit’s re-entry.

Bybit’s return to the UK crypto market marks a notable moment in the ongoing evolution of crypto regulation and industry adaptation. While it underscores a trend toward compliance-driven business models, significant uncertainties remain about the details of Bybit’s regulatory alignment and its long-term market strategy. The broader implications for market structure and regulatory effectiveness will become clearer as more information emerges and as the FCA continues to engage with the sector.

Source: https://www.coindesk.com/business/2025/12/19/bybit-returns-to-uk-with-100-crypto-trading-pairs-after-2-year-break. This article is based on verified research material available at the time of writing. Where information is limited or unavailable, this is stated explicitly.