Bybit Resumes User Registration in China Despite Regulatory Concerns

Bybit, the third-largest offshore crypto exchange, has resumed user registration and identification verification in Mainland China. 

This development is unexpected, considering the Chinese government’s stringent stance on cryptocurrency trading and activities. Bybit had previously ceased operations in China in compliance with local laws prohibiting cryptocurrency transactions and mining.

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

Despite reopening registration for Chinese users, Bybit’s certification page lists Mainland China among the jurisdictions where its services are unavailable. This contradiction has yet to be addressed by Bybit’s management, leaving stakeholders uncertain about the exchange’s strategic direction and regulatory compliance. This move has raised questions about a potential shift in China’s approach towards cryptocurrencies, although no official statement has been made by Chinese authorities.

Market Response to Bybit’s New Offerings

In addition to reopening registration in China, Bybit has introduced new investment products to the market. The exchange’s Bitcoin Wealth Management Fund, which quickly sold out within seven hours of its initial offering, indicates strong market demand for cryptocurrency investment opportunities. This rapid uptake reflects investor confidence in Bybit’s offerings despite the regulatory uncertainties surrounding its operations in various regions.

Bybit’s re-entry into the Chinese market amid ongoing challenges in other jurisdictions. The exchange recently withdrew its application for a license in Hong Kong, citing high regulatory costs and operational challenges under the city’s new laws for cryptocurrency firms. This decision highlights international cryptocurrency exchanges‘ difficulties in navigating diverse and often fragmented regulatory landscapes.

In France, Bybit has also encountered legal issues, with the Autorité des Marchés Financiers (AMF) accusing the exchange of operating without the necessary license. Such regulatory challenges underscore the complexities of offering cryptocurrency services across multiple countries, each with legal requirements and compliance standards.

Speculations on China’s Cryptocurrency Policy

The unexpected resumption of Bybit’s services in China has led to speculation about possible changes in the country’s cryptocurrency policies. China has maintained a strict regulatory stance on cryptocurrencies, initially banning crypto transactions in 2013 and extending the prohibition to crypto mining activities in 2021. This regulatory environment forced several crypto platforms, including Binance and HTX (formerly Huobi), to cease operations in mainland China.

Despite the ban, reports indicate that crypto traders in China continue to find alternative ways to engage in the market. According to a Chainalysis report, China ranked as the third Asian country with the highest crypto activities, with Chinese crypto transactions worth $86.4 billion between 2022 and 2023. This data suggests a resilient demand for cryptocurrency trading in China, regardless of regulatory restrictions.