China announced in September 2021 that it would ban cryptocurrencies and declared all related transactions to be illegal. However, Bybit suddenly allowed Chinese users to undergo first-level KYC identity verification without public explanation, causing unease among some employees and market participants.
Bybit, a cryptocurrency exchange, has long been restricted by China’s strict regulatory stance on the cryptocurrency industry, leading to a complete ban on all Chinese users registering and using the platform. However, Bybit recently opened registration and identity verification to Chinese users.
According to Wu Shuo Blockchain, mainland Chinese identification cards can now pass the platform’s first-level KYC identity verification. Based on Bybit’s latest service terms on June 5th, China is not excluded from the list of excluded jurisdictions.
However, upon verification, Bybit still lists China as a non-service region in the common problem section next to identity verification. It is uncertain why there is a discrepancy between the two.
Wu Shuo cited informed sources reporting that Bybit did not notify or explain this change internally, causing unease among some employees. The specific reasons for Bybit’s sudden opening to the Chinese market and whether this channel will be closed again remain unclear.
According to data from CoinGecko, Bybit’s trading volume in the past 24 hours reached nearly $4 billion, making it the world’s second-largest cryptocurrency exchange, second only to Binance. Industry analysts believe that Bybit’s rapid business growth, especially its spot business surpassing the veteran exchange OKX at one point, indicates a possible expansion into new markets. However, the sudden opening to the Chinese market contradicts Bybit’s consistent cautious style, leaving outsiders puzzled.
According to blockchain analytics company Nansen, the total value of assets held by customers on the Bybit platform exceeds $7 billion. As of the deadline, Bybit has not made a public response to this matter.
Earlier, Bybit withdrew its application for a license in Hong Kong. In late January, Bybit formally submitted a license application for a virtual asset trading platform to the Hong Kong Securities and Futures Commission through its Hong Kong entity, Spark Fintech Limited. However, on May 31st, Bybit’s Hong Kong entity and many other exchanges withdrew their applications for licenses in Hong Kong and ceased operations in Hong Kong as required.
In March, the Hong Kong Securities and Futures Commission first listed Bybit as a suspicious virtual asset trading platform and categorized its encrypted products as suspicious investment products. The Commission stated that Bybit offers cryptocurrency trading services to Hong Kong investors in multiple jurisdictions, including various futures contracts, options, leveraged tokens, dual-currency investments, etc., and explicitly stated that no entity under Bybit has obtained a license or registration for “regulated activities” in Hong Kong.
The announcement also specifically pointed out that the website bybit.com is operated by Bybit Fintech Limited in Seychelles, while bybit.com.hk is operated by the Hong Kong entity Spark Fintech Limited and does not involve the related encrypted products provided by the former. In short, the Hong Kong Securities and Futures Commission does not allow local users to use Bybit Global’s derivative products, and after Bybit HK, controlled by Spark Fintech Limited, obtains a license, it will be able to legally provide specific encrypted products to Hong Kong users, but it has also withdrawn its license application for now.
At the time when the Hong Kong Securities and Futures Commission listed Bybit’s offshore entity as a warning while its Hong Kong entity had applied for relevant licenses, it was indeed a precedent.
Source: Hong Kong Securities and Futures Commission
Related Reports
Second round of Notcoin mining: Bybit pledges $NOT with an annualized return of over 790%, TG wallet stores TON for free airdrop
Bybit expands collaboration with Ethena: USDe can be used as collateral, earn Sats, participate in new coin mining… Arthur Hayes bullish on $ENA climbing to 10 Magnificents
Bybit Taiwan, Macau new user limited-time special offer: pledge USDT, enjoy a 666% annualized return