Regulation

Is China Crypto Ban Over As Bybit Resumes Registration?

Published

5 months ago

June 5, 2024

Bybit, the third largest offshore cryptocurrency exchange, has resumed its user sign-up and identification verification in Mainland China where it had previously ceased operations.

This comes even as Bybit continues to note that it does not operate in some jurisdictions such as Mainland China on its website. This creates a paradox, which may indicate the change in the approach of Bybit concerning regulation or strategy.

Bybit Reopens to Chinese Users

Although Bybit has been banned in China for quite some time now to the extent that Chinese residents cannot register and use the platform, the company has recently added registration features for this population.

This decision comes as a surprise since the exchange has been previously in compliance with Chinese laws that prohibit cryptocurrency trading and activities.

Exclusive: The third largest offshore exchange Bybit suddenly opened up registration and authentication for users in China. Bybit has long strictly prohibited the registration and use of all Chinese users. The management team has been very cautious about this. pic.twitter.com/m71BdT4KAq

— Wu Blockchain (@WuBlockchain) June 5, 2024

The exchange’s own certification page has Mainland China among the jurisdictions where its services are not available along with the United States, Singapore and some parts of Canada among others. This conflicting information has not been clarified by Bybit’s management in their subsequent public statements.

Implications for Cryptocurrency Regulations in China

This change in policy by Bybit could be an indication of a slight change in China’s approach towards cryptocurrency but this remains speculative until there is official communication from the relevant authorities.

Until now, China has been quite standoffish when it comes to cryptocurrencies, stating that digital currencies pose a threat to fraud, money laundering, and economic fluctuations.

Bybit withdrew its application for a Hong Kong license earlier. Hong Kong does not allow any entity to develop business in mainland China. This also means that Bybit may give up applying for a Hong Kong license. Currently, Bybit is headquartered in Dubai.
— Wu Blockchain (@WuBlockchain) June 5, 2024

This may present a major shift in the ways of regulation, possibly in coordination with other changes that are happening in the nation’s financial practices and technological advancements. Nonetheless, the extent of the impact of Bybit’s decision will be determined by the future actions of regulators and the exchange’s capacity to maneuver through the legal landscape in China.

Bybit’s Global Operations and Regulatory Challenges

Currently, Bybit is now operating in different regions with different regulatory frameworks. Besides China, the exchange has also pulled out its application for a license in Hong Kong where new laws have put into effect many strict operational conditions for cryptocurrency firms. The city’s efforts towards formalization of the virtual asset landscape has been met with divergent opinions from participants with some halting operations due to the costs associated with regulation.

Furthermore, Bybit has had issues with the law in other countries such as France, where the Autorité des Marchés Financiers (AMF) accused the exchange of operating without the necessary license. This raises the question of the legal environment that is often fragmented and challenging for international cryptocurrency exchange platforms as they offer their services across various jurisdictions.

However, to meet these challenges and harness market potential, Bybit has expanded its offerings, including the Bitcoin Wealth Management Fund which attracted quick buying interest of over 100 BTC during its initial offering within 7 hours.