Bitcoin News Today: Bybit Halts Japan Sign-Ups as FSA Pushes Crypto into Mainstream Banking

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Thursday, Oct 30, 2025 9:07 am ET1min read
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- Bybit halts new Japan user registrations from October 31, 2025, to comply with FSA regulatory reforms, prioritizing compliance in key markets.

- FSA proposes treating crypto like stocks, allowing banks to hold digital assets, potentially reshaping Japan's $200B banking sector.

- Bybit emphasizes existing Japanese users remain unaffected, pausing operations to adapt to evolving frameworks and prepare for compliant re-entry.

- Experts highlight Japan's regulatory "double-edged sword," with slow approvals driving innovation offshore despite potential institutional adoption gains.

Bybit, the world's second-largest cryptocurrency exchange by trading volume, has announced it will halt new user registrations in Japan starting October 31, 2025, to align with the country's evolving regulatory framework, according to

markets.com
. The move, effective at 12:00 PM UTC, reflects the exchange's proactive approach to navigating Japan's Financial Services Agency (FSA) reforms. Bybit emphasized that existing Japanese users will not face immediate disruptions, with current services remaining operational.

The decision comes as the FSA considers regulatory changes that could permit banks to acquire and hold cryptocurrencies like

Bitcoin
and operate licensed exchanges, treating digital assets more like stocks and government bonds, as reported by
Coinotag
. The FSA is also expected to introduce risk-mitigation measures, including enhanced capital requirements for banks handling crypto assets. Such developments could pave the way for broader institutional adoption in Japan's banking sector.

Bybit's pause underscores the growing regulatory scrutiny in Japan, a market where the exchange has faced prior warnings for operating without proper registration, as noted by

Cointelegraph
. The company stated the temporary halt will allow it to "review and adapt to the evolving framework" while maintaining dialogue with regulators, according to
CryptoBriefing
. "This pause will help us allocate resources toward understanding the evolving framework set by the FSA and prepare for a compliant and sustainable re-entry in the future," Bybit said in a statement.

Industry experts have highlighted Japan's regulatory environment as a double-edged sword. Maksym Sakharov, co-founder of decentralized onchain bank WeFi, previously noted that Japan's "slow, prescriptive, and risk-averse" approval processes—rather than taxes—are driving crypto innovation offshore. This sentiment aligns with broader trends, as some exchanges scale back operations in Japan due to compliance costs.

The FSA's proposed reforms could reshape Japan's $200 billion banking sector, with institutions like Mitsubishi UFJ and Sumitomo Mitsui potentially benefiting from new opportunities in crypto custody and trading. Analysts suggest that institutional entry could stabilize Bitcoin's price and attract up to $50 billion in market capitalization within two years. Multiple outlets covered the announcement, including

CoinPedia
.

Bybit's action is part of a broader industry trend, as crypto firms prioritize compliance in key markets. The exchange has previously strengthened its governance under the MiCA-compliant Bybit EU entity and expanded partnerships in LATAM and the Middle East, as reported by

FinanceFeeds
. This strategy positions Bybit as a model for balancing innovation with regulatory expectations in a maturing market.

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