Bybit to Cease Services for French Users Amid Regulatory Pressure

Global cryptocurrency exchange Bybit has announced its decision to terminate withdrawal and custody services for users in France, effective January 8, 2025.

"In light of recent developments by the French regulator, and in continuation of the restrictions we previously implemented in the country, we regret to inform you that, starting Jan 8, 2025, Bybit will no longer provide withdrawal and custody services to nationals or residents of the French Territories ("French Users")," the company said in an announcement on Tuesday.

Bybit had already restricted French users from purchasing new products or adding to positions earlier in August. Now, the company is taking further steps to sever ties with French residents and nationals entirely. Users have been advised to withdraw their funds before the January deadline to avoid complications.

For accounts holding assets exceeding 10 USDC, Bybit will transfer unclaimed balances to Coinhouse, a regulated French crypto custodian. Coinhouse will require users to complete Know Your Customer (KYC) verification to regain access to their funds. Smaller accounts holding 10 USDC or less will face a 10 USDC account termination fee, effectively nullifying these balances.

Bybit’s withdrawal highlights the growing regulatory scrutiny crypto exchanges face in France. The French financial authority, Autorité des Marchés Financiers (AMF), blacklisted Bybit in May 2022, stating the exchange was not authorized to offer digital asset services in the country. Despite this, Bybit initially continued operations but began scaling back services after July, when the AMF began accepting applications for crypto service provider licensing under the EU’s Markets in Crypto-Assets (MiCA) framework.

MiCA, set to be fully operational by December 2024, aims to standardize regulations across the EU, covering areas such as anti-money laundering protocols, cybersecurity, and stablecoin governance. France, however, has implemented accelerated measures, requiring firms to secure mandatory licensing by mid-2026, effectively ending the practice of operating without full authorization.

Bybit's decision to exit France comes after months of regulatory tightening and enforcement, which the exchange cited as the primary reason for its withdrawal. In contrast, other industry players, including Circle – the issuer of USDC – have embraced the new regulatory framework. Circle became the first stablecoin issuer to achieve MiCA compliance earlier this year.

For the broader industry, Bybit’s withdrawal reflects a growing divide between exchanges willing to navigate regulatory hurdles and those opting to exit challenging jurisdictions.