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Bybit Exits France: Crypto Trading Restrictions Begin August 2

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Bybit, the third-large­st offshore crypto exchange­ globally, has revealed plans to halt its se­rvices in France. This decision is prompte­d by the strict regulations outlined in the­ European Union’s Markets in Crypto-Assets (MiCA) frame­work, set to take effe­ct this December. The­ phased withdrawal of Bybit will commence on August 2, 2024, at 8:00 UTC, impacting Fre­nch users through a series of planne­d stages.

Starting from August 2 onwards, French use­rs will encounter notable limitations on the­ir accounts. They will no longer be able­ to initiate new purchases, ope­n positions, or make any additions within the realm of all the exchange offe­rings, spanning spot trading, Bybit Earn, and an array of derivatives.

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Source: Bybit notice

Existing accounts will transition to a “Close-Only” mode­, halting any new transactions or deposits. This limitation will encompass all fiat de­posits and services provided by the exchange, including the­ Bybit Card and P2P trading.

Bybit’s Liquidation Plan for French Accounts

A timeline has been published by the exchange to handle the current positions of French users. All open positions will be closed from 8:00 UTC on August 13, 2024. From that time on, they can only withdraw their funds and assets. It is important to note that this liquidation will cover all the products such as spot and derivative ones including trading bots and Bybit Earn.

The move by the exchange comes after France strengthened its cryptocurrency regulations further in August 2023. Changes like these are part of the larger MiCA regulatory framework, which is supposed to facilitate a more controlled and transparent environment for EU-based cryptocurrency business operations. These new rules aim to ensure that any crypto company meets stringent requirements before launching its operation in any European Union member state.

Bybit, in an official statement, stated that it is committed to following regulatory standards. The company admitted that this determination may cause inconvenience to people and promised again the return of its business to France after securing the necessary licenses under new regulatory regime. The exchange has urged users affected by this move to close their remaining positions and withdraw their funds before the final deadline.

Related | Bitcoin (BTC) Rebound From $62.3k: Analyst Anticipate Huge Surge In Coming Months

Bybit Expands Boldly: Services Now Available in China

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In a surprising move, the cryptocurrency exchange Bybit has seemingly extended its services to users in the People’s Republic of China, a jurisdiction that was previously off-limits. This development was brought to light by Wu Blockchain, a social media-based news outlet, which reported that the exchange now allows Chinese users to register and authenticate their accounts on the platform. Users can utilize various forms of identification, including their ID cards, passports, driver’s licenses, or resident permits, to fulfill the know-your-customer (KYC) requirements.

This revelation comes amid ongoing scrutiny of cryptocurrency exchanges and their adherence to regional regulations. As of June 5, China was notably absent from Bybit’s list of excluded jurisdictions. The list, detailed in the exchange’s terms of service, continues to bar users from countries such as the United States, the United Kingdom, Hong Kong, Singapore, Canada, North Korea, Cuba, Iran, Uzbekistan, and Russian-controlled regions of Ukraine, among others. The inclusion of mainland China in the exchange’s operational reach marks a significant shift in the exchange’s regional strategy.

SFC’s Stance Alters Bybit’s Hong Kong Plans

Earlier this year, Bybit made headlines when it applied to operate as a virtual asset trading platform in Hong Kong through its local entity, Spark Fintech Limited. However, this application was subsequently withdrawn. The decision to retract the application came in the wake of the Hong Kong Securities and Futures Commission’s (SFC) statement in early June. The SFC explicitly stated that it would not permit firms to provide services to Hong Kong residents if those firms also catered to customers in mainland China.

The potential entry of Bybit into the Chinese market raises several questions, especially given China’s stringent regulations on cryptocurrency activities. It remains to be seen how Bybit will navigate these regulatory waters and what implications this move will have for its global operations.

Despite reaching out for confirmation, The Block has yet to receive a response from Bybit regarding these developments. As the situation unfolds, the cryptocurrency community will be closely watching how Bybit’s strategic decisions influence the broader market and regulatory environment.

For now, Bybit’s expansion into China signals a bold step into one of the world’s most tightly controlled digital currency landscapes, potentially setting the stage for significant shifts in the global crypto exchange landscape.

Crypto Investments Sees 36% Surge in Q1 2024, Bybit Report Institutional Reveals

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The crypto market is witnessing a pivotal shift, as reveale­d by a recent study from Bybit and Tree­house, a renowned digital asse­t research entity. The­ir 2024 Institutional Industry Report unveils a landscape whe­re the market is maturing. It de­picts a surge in institutional trust and a remarkable influx of ve­nture capital funding, signaling a profound transformation within the crypto industry.

The crypto marke­t witnessed remarkable­ expansion over the past months. Their total value climbe­d swiftly – from just above $1 trillion in October 2023 to beyond $2.5 trillion by March 2024. Inve­stors felt increasingly confident in crypto asse­ts during this timeframe. Large sums of funds kept pouring into blockchain-based projects and cryptocurrencie­s.

This report dives de­ep into on-chain data, revealing insights into institutional crypto inve­stments and their growing fascination with AI and Bitcoin ecosyste­ms. Notably, it explores the long-te­rm effects of Exchange-Trade­d Funds (ETFs) and sheds light on the upcoming Bitcoin halving, an anticipated e­vent that may reshape marke­t dynamics.

Crypto Investments Surge to $1.94 Billion Spurred by VC Funding

The cryptocurre­ncy market is witnessing a remarkable­ revival in Venture Capital (VC) crypto investments. Quarter 4 of 2023 witnesse­d a substantial 21% rise in VC deals, amounting to 174 transactions with $1.42 billion in disclosed funding. This upward traje­ctory persisted in Quarter 1 of 2024, marking a furthe­r 36% uptick in deals, with disclosed funding soaring to $1.94 billion.

Infrastructure projects are currently the primary focus of VC crypto investments, attracting significant capital to bolster the core elements of the blockchain ecosystem. These projects encompass hardware wallets, blockchain data providers, and other solutions that address industry challenges and drive innovation.

The report also highlights a key benefit for investors: low correlation between cryptocurrencies and traditional indices. Both BTC and ETH maintain correlations below 3% with traditional equity and fixed-income markets. Notably, Bitcoin even exhibits negative correlations, indicating its potential as a valuable diversification tool for portfolios heavily invested in equities.

While the leading cryptocurrencies like Bitcoin and Ethereum continue to dominate, the report acknowledges the rise of challenger chains – alternative blockchains offering faster transaction speeds and lower fees. Since Q4 2023, native tokens of these challenger chains have significantly outperformed ETH. Solana (SOL), the leading challenger by transaction volume and Total Value Locked (TVL), remains the frontrunner in this space.

Related Reading | Crypto Investments And Better Lives: A 50% Success Rate

Crypto crackdown: SFC identifies 11 dubious products on Bybit

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Hong Kong’s financial watchdog, the Securities and Futures Commission (SFC), has cast a shadow over the cryptocurrency exchange Bybit, labeling it as a “suspicious” trading platform. This move comes despite Bybit’s local entity, Spark Fintech, having submitted its crypto exchange license application earlier this year.

The SFC’s updated list of “suspicious virtual asset trading platforms” now includes Bybit, accompanied by the identification of 11 of its products as being of concern. These products span a variety of digital asset investment avenues, including futures contracts, options, leveraged tokens, and wealth management services, among others.

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Source: SFC HK

In response to the SFC’s actions, Bybit released a statement expressing an inability to comment on specific regulatory inquiries or products at this time. The exchange emphasized its commitment to compliance with regional regulations, suggesting that the identified products might not be available in the Hong Kong market due to local compliance requirements.

Impact on Crypto Market Expansion

This development underscores the growing scrutiny faced by digital asset platforms from regulatory bodies worldwide. As the crypto market continues to expand, regulators are keen to ensure investor protection and uphold market integrity. Bybit’s classification as a “suspicious” platform by the SFC serves as a reminder of the regulatory challenges confronting the digital asset industry.

For investors and traders, regulatory actions such as these signal the importance of due diligence when engaging with digital asset platforms. While the allure of high returns in the market remains strong, it is crucial to assess the legitimacy and compliance status of the platforms and products being utilized.

The SFC’s move also highlights the evolving regulatory landscape surrounding cryptocurrencies in Hong Kong. As authorities work to establish clear frameworks for exchanges and related services, market participants can expect increased oversight and enforcement measures.

In conclusion, Bybit’s classification as a “suspicious” crypto trading platform by the Hong Kong SFC serves as a stark reminder of the regulatory challenges facing the crypto industry. With regulatory scrutiny on the rise, market participants must prioritize compliance and due diligence to navigate the evolving crypto landscape effectively.

Ethereum Emerges Victorious: Bybit Research Reveals Institutional Preference Shift from Bitcoin

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On September 15, 2022, the Ethereum network experienced a significant shift from the proof-of-work mining approach to the proof-of-stake model. This much-awaited shift has brought in a new era of sustainability and environmental friendliness in the blockchain industry, with an amazing 99.95% reduction in energy use. Ethereum has grown significantly in the last several months. As of the time of publication, its value has increased by 6.6% to $3,104. Each year, ETH has increased by 94%.

Ether has become the predominant asset among institutional holdings, with Bybit suggesting that this trend could be attributed to the anticipated positive impact of the Dencun upgrade, potentially leading to an upward trajectory.

Bybit Research Analysis of Ethereum

According to Bybit’s study, which questioned traders with assets in the exchange, institutions have boosted their portfolio concentration in bitcoin and ether to 80%, with a substantial bet on ether owing to the anticipated Dencun upgrade. The survey also stated that retail customers are more inclined toward cryptocurrencies and have less of a concentration in these assets.

With a 33% year-to-date advance, ether has beaten bitcoin, currently trading over $3100. Its deflationary supply since the switch to proof-of-stake, the low amounts of ETH kept on exchanges, and the rise in staking activity are some of the reasons behind this.

Gautam Chhugani and Mahika Sapra, analysts at Bernstein, highlighted in a recent report that the key reasons influencing Ethereum’s performance in relation to the largest digital asset globally were the growth of the DeFi ecosystem and layer-2 networks, as well as the anticipated Dencun update. In December, Bybit’s previous report revealed institutional bullishness towards bitcoin, mixed sentiment towards ether, and a trend of reallocating more ether and altcoin holdings into bitcoin in anticipation of the exchange-traded fund’s (ETF) approval.

This market sentiment indicates a change from that time. In spite of their strong returns in 2023, Bybit also reported a notable decline in institutional altcoin holdings, notably in erratic categories like meme coins, artificial intelligence (AI), and BRC-20 tokens. Instead, institutions are directing their focus towards stable assets like layer-1 tokens and decentralized finance (DeFi) protocols.

Bybit Report: Institutional Surge in Ethereum, INS Traders Boost Bitcoin

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In a recent report by Bybit, a leading cryptocurrency exchange, insights into the changing dynamics of institutional and retail investors’ asset portfolios shed light on the evolving landscape of the crypto market. The report, covering the period from September to the present, highlights a notable shift in asset allocation behaviors amid unprecedented market volatility since 2022.

The Bybit report reveals that institutional users allocated half of their asset portfolio to Bitcoin (BTC) as of September. Remarkably, the proportion of BTC held by retail investors was the lowest, with stablecoins dominating their portfolio allocations. However, from September onwards, institutional users have rapidly increased their allocation to Ethereum (ETH) in their portfolios.

The crypto markets have been characterized by extraordinary volatility since 2022, influenced by both global macroeconomic factors and crypto-native incidents. Bybit’s research focuses on understanding how traders adapt their asset allocations amidst these market fluctuations, especially in the highly volatile period since December 2022.

During the research period, a significant player in the market, INS Traders, displayed a diversified crypto portfolio strategy. Notably, 45% of their assets were secured in stablecoins, while 50% were strategically invested in a combination of Bitcoin and Ether. A mere 5% of their portfolio was dedicated to altcoins, reflecting a risk-averse approach in a bear market.

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INS Traders’ September Bitcoin Surge

One intriguing observation was the sharp spike in INS’s Bitcoin holdings during September, almost doubling their percentage over the initial three quarters of 2023. Half of INS’s asset portfolio was allocated to BTC in September alone. This alignment with the prevailing positive market sentiment toward Bitcoin is attributed to favorable lawsuit outcomes, creating anticipation for the potential approval of a spot BTC exchange-traded fund (ETF) by the SEC.

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Conversely, retail traders exhibited the lowest holding percentage in BTC composition compared to INS and VIP users. The earlier Bybit report suggested that this divergence could be linked to the comparatively higher leverage levels maintained by retail traders.

Bybit’s ETH, Stablecoins & Altcoins Insight

While INS traders increased their Bitcoin holdings, the report highlighted a continued decline in ETH holdings across most traders since Shapella earlier this year. Despite a stable Ether price after Shapella in April and May, there has been a notable surge in INS’s Ether holding percentage starting in September, suggesting a general upbeat sentiment toward crypto among INS traders.

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The Bybit report also delved into the stablecoin allocations of retail and institutional traders. Retail traders consistently exhibited the highest stablecoin percentage, influenced by their leverage practices. However, INS holders displayed a drop in stablecoin percentage during bearish markets and an increase in bull markets, indicating a successful market-timing strategy.

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September witnessed a sharp decline in stablecoin holdings for INS, aligning with a significant surge in BTC and ETH holding percentages. If this trend persists, it signals a growing optimism among institutions regarding the market’s trajectory.

As per the report, institutions remain downbeat on altcoins, with a consistent decline in the holding percentage of other tokens. While normal users and VIPs experienced an initial increase in holding other tokens during the first half of the year, this trend began to reverse in August and September, reaching lower levels recorded in December.

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Related Reading |  Avalanche DeFi’s $8.5M Heist: Court Acquits “Ethical Hackers” 

Binance Settlement Spurs Coinbase & Bybit Growth

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In the aftermath of Binance’s recent settlement with the U.S. Department of Justice, two major players have emerged as the apparent victors in the crypto exchange landscape. According to a report from Kaiko, Coinbase and Bybit are enjoying newfound prominence, while the fate of Binance remains uncertain.

Binance’s Regulatory Settlement

The settlement, which saw Binance agreeing to a hefty $4 billion penalty, the retention of an independent compliance monitor for three years, and an overhaul of its AML/KYC programs, also involved agreements with the CFTC, FinCEN, and OFAC.

Notably absent from the resolution was the SEC’s ongoing lawsuit against Binance and its U.S. arm. The Wall Street Journal reported that the SEC is actively investigating whether Binance executives had backdoor access to customer funds, keeping the legal cloud over the exchange.

With Binance facing regulatory scrutiny, speculation is rife about the implications for a potential spot Bitcoin ETF and which exchanges stand to benefit from the fallout. COIN, DYDX, and UNI have all experienced a rally following the settlement, prompting industry watchers to assess the landscape for potential winners.

In terms of ETF prospects, an analysis of BTC volumes and the SEC’s historical decisions suggests that the settlement may not significantly impact the likelihood of approval. The SEC has previously emphasized the need for a surveillance sharing agreement with a market of significant size, making the fate of a BTC ETF uncertain despite Binance’s settlement.

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Binance Settlement Spurs Coinbase & Bybit Growth 11

Turning the spotlight on Binance itself, despite significant outflows, there’s limited evidence of a mass exodus from the exchange based on liquidity data. Market depth has actually increased since news of the settlement broke, with only minor disturbances in spreads for top BTC instruments.

The only cause for concern arose when TUSD experienced a rapid depegging down to 0.995 Tether, attributed in part to a massive $3 million market sell order. Some speculated a connection to Tron being used in terror financing, but it appears the swift sell-off was triggered by the conclusion of Binance’s Memecoin “Launchpool” on November 26.

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Binance Settlement Spurs Coinbase & Bybit Growth 12

Coinbase & Bybit Gain Traction

In the aftermath, Coinbase has emerged as a strong performer, with its stock gaining a remarkable 75% in a single month. The prevailing narrative suggests that Coinbase is poised to benefit from improving market conditions as the bear market potentially recedes.

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Binance Settlement Spurs Coinbase & Bybit Growth 13

Examining market share trends, Bybit stands out as the immediate winner, consistently gaining market share in every hour, growing by more than 20% in 16 out of 24 hours. Coinbase, on the other hand, experienced significant growth outside of U.S. trading hours, particularly in Europe and Asia.

Despite Coinbase’s gains, Binance remains the leader in liquidity for both BTC and altcoins, with Bybit quietly improving its liquidity over the past year. While early trends appear positive for Coinbase and Bybit, Binance’s resilience is evident in its ongoing leadership in liquidity.

As the crypto exchange competition unfolds, a recent development adds an intriguing twist – Coinbase’s revelation to customers of a subpoena from the CFTC related to Bybit. While theories abound that Binance may lose market share, the compliance monitor and enhanced AML/KYC procedures could potentially bolster trust in the exchange, maintaining its standing in the market.

In the evolving saga, it seems that a positive outcome may be in store for all parties involved: the U.S. government secures a win, Binance can continue operations with increased compliance, and other exchanges have the opportunity to grow in the shifting landscape of the cryptocurrency market.

Related Reading |  XRP Three-Candle Symphony – Will It Hit $10 Or Soar To $50? 

CFTC Subpoena Coinbase Over Bybit Connections

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The US Commodity Futures Trading Commission [CFTC] has reportedly issued a subpoena to Coinbase, requesting information about users who have engaged with the cryptocurrency exchange Bybit. While there has been no official confirmation of the subpoena, reports suggest that Coinbase has notified selected users via email, detailing the document received from the CFTC.

In the communication, Coinbase informed users about the service of the subpoena, stating that it sought information related to their accounts and transaction activities. The email emphasized that, as of the notification, no information had been disclosed to the CFTC. It also reassured users not to panic and outlined the possibility of Coinbase challenging the CFTC subpoena by filing a motion to quash or another objection with the court before November 30, 2023.

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CFTC Subpoena Coinbase Over Bybit Connections 15

This development unfolds in the backdrop of increased regulatory actions by US authorities, particularly evident in the recent crackdown on Binance. The CFTC’s scrutiny extends to Bybit, currently the third-largest offshore cryptocurrency exchange following Binance and OKX. Bybit recently celebrated a significant milestone with over 20 million registered users, reinforcing its prominent position in the crypto industry as it approaches its fifth anniversary in December.

Coinbase Users Under Scanner

The CFTC’s issuance of a subpoena to Coinbase aligns with its recent stance on regulating non-U.S. entities operating in the cryptocurrency space. The regulatory body has explicitly expressed its commitment to maintaining a robust position against cryptocurrency exchanges found to be violating trading laws. The use of virtual private networks [VPNs] or any measures aimed at circumventing Know Your Customer [KYC] regulations has been explicitly disallowed.

This heightened regulatory scrutiny is evident in recent enforcement actions, including the case involving Changpeng Zhao, the former CEO of Binance. The repercussions for Binance include substantial fines, with the crypto firm set to pay over $4.3 billion, $50 million of which will be contributed by Zhao himself.  Notably, substantial penalties resulting from such actions are designated for addressing claims raised by the CFTC, particularly those related to the facilitation of unregistered crypto derivatives trading for U.S. customers.

FTX In Legal Battle: Bankruptcy Advisers Sue Bybit Over $953M Withdrawal

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In a recent development, renowned crypto journalist Colin Wu, through Wu Blockchain, revealed that FTX’s bankruptcy advisers have taken legal action against crypto exchange Bybit and its affiliates. The lawsuit, filed in a Delaware court on Friday, November 10, seeks to recover approximately $953 million in cash and digital assets reportedly withdrawn from FTX just before it filed for Chapter 11 a year ago.

According to a recent report, Bybit’s investment arm, Mirana Corp., enjoyed exclusive “VIP” benefits unavailable to most customers. Mirana is accused of leveraging these privileges to swiftly move the bulk of its assets out of FTX before the platform’s collapse in November 2022.

The legal action alleges that Mirana pressured FTX employees to expedite its withdrawal requests, creating delays for regular customers. The primary objective of the lawsuit is to recover assets, including over $327 million allegedly withdrawn by Mirana when FTX paused withdrawals on November 8, 2022.

Bybit, Mirana, And Others Targeted In FTX Bankruptcy Lawsuit

The bankruptcy lawsuit targets Bybit Fintech Ltd., Mirana, and a related crypto-trading entity named Time Research Ltd. It also includes a senior Mirana executive from the relevant period and Singaporean residents allegedly involved in the FTX withdrawals now under scrutiny.

Chapter 11 typically allows struggling companies to reclaim funds before a bankruptcy filing, preventing specific creditors from gaining an undue advantage. Exchange new management has initiated several lawsuits, with this being the latest attempt to retrieve funds disbursed before the company filed for Chapter 11 in November 2022.

In response to the legal complaint, FTX asserted that it evaluated the assets withdrawn by Bybit and its affiliates based on November 1 pricing. The complaint noted that pricing information might be updated as legal proceedings progress, and certain legal claims could be subject to defenses related to “subsequent new value.”

Amidst these legal battles, FTX is actively working towards revitalizing the exchange, garnering interest from the former president of the New York Stock Exchange (NYSE). Successfully recovering funds from Bybit could provide a substantial financial boost to restart the exchange. Additionally, it has been selling its Solana tokens to increase its cash reserves as part of its broader strategy to regain stability.

Bybit’s Farewell To The UK As FCA Brings New Crypto Regulations

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Bybit, a prominent player in the world of cryptocurrency exchanges, has made a significant decision following extensive deliberations. In response to forthcoming marketing regulations set to be enforced by the UK Financial Conduct Authority [FCA] on October 8, the exchange has chosen to withdraw from the UK market. This strategic move reflects the evolving landscape of crypto regulation and its impact on market participants.

In a press release, Bybit officially announced that it will cease accepting new account opening applications from both United Kingdom residents and nationals as of October 1, 2023, at 8 a.m. UTC. This decision marks a proactive response to impending regulatory changes and sets the stage for a transition period for existing users.

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Bybit's Farewell To The UK As FCA Brings New Crypto Regulations 17

For Bybit’s current user base in the UK, a crucial deadline looms on the horizon. By October 8, 2023, at 8 a.m. UTC, existing users must initiate the closure of their accounts and withdraw their funds. Beyond this point, UK customers will find themselves unable to make new deposits, establish fresh contracts, or augment their existing positions across all products and services.

The platform emphasizes the importance of timely action for affected UK customers. Until January 8, 2024, at 8 a.m. UTC, users are strongly encouraged to proactively manage and wind down their positions. After this specified deadline, any remaining open positions will face liquidation, with the resultant funds made available for withdrawal.

Bybit’s withdrawal from the UK market follows the concerns of its co-founder and CEO, Ben Zhou, who foresaw the drastic move in light of these impending regulations. Zhou also highlighted that Bybit also bowed down from the French market due to regulatory pressures. As the top exec mentioned in a previous statement, he recognized the trend of increasing regulatory scrutiny, anticipating the need to retreat from multiple countries.

Bybit’s Exit Signal Shift In UK’s Crypto Regulation

The FCA, in its effort to introduce “tougher new rules,” has outlined a series of changes, including a mandatory 24-hour cooling-off period and the prohibition of incentives like ‘refer a friend’ bonuses. FCA’s announcement explicitly warns against any continued promotion of crypto assets to UK customers beyond the October deadline without compliance with the new regulations, which could potentially result in criminal charges, including the possibility of an unlimited fine and/or imprisonment for up to 2 years.

While the duration of Bybit’s suspension from the UK market remains uncertain, the exchange has indicated that this move allows the company to redirect its efforts and resources toward aligning with the regulatory framework established by UK authorities.