Bybit Exchange recently suddenly opened registration for overseas Chinese users, causing anxiety among some employees. Lawyer Liu Honglin from the Shanghai Mankun Law Firm shared his interpretation on this matter. This article is sourced from an article by the Mankun Blockchain Institute, compiled by PANews.
(Background:
Unusual! Bybit suddenly opens registration for Chinese users, reasons undisclosed causing anxiety among internal employees
)
Table of Contents
The Opened Bybit
The Compliance-Resistant Exchange
The Betrayed Exchange Employees
One of the hottest topics in the industry these days is the price of BNB, the leading cryptocurrency on the global exchange Binance, hitting $720, breaking its all-time high. Another news is the sudden opening of registration for users from mainland China on the formerly reserved cryptocurrency exchange Bybit.
Bybit is a well-known cryptocurrency exchange established in 2018, headquartered in Dubai. The company was founded by former forex traders and blockchain technology experts, committed to providing professional, intelligent, and intuitive trading experience for users worldwide.
In 2021, Bybit first prohibited mainland Chinese users from using its services, closing logins for all accounts registered with Chinese phone numbers and the API interface for Chinese IPs. On June 5, 2024, Bybit suddenly opened registration for mainland Chinese users, allowing Chinese ID cards to pass first-level identity verification, with a daily withdrawal limit of 1 million USDT. This information was not notified or explained internally, causing panic among some employees.
Afterwards, Bybit released a statement claiming that the opening of registration for Chinese ID cards was to expand their service range to cover overseas Chinese communities, residing in China and other jurisdictions not under restriction. This move aims to meet the needs of Chinese expatriates and the international Chinese community. Bybit’s business has been growing rapidly recently, and its spot trading business has even surpassed established exchanges like OKX. Insiders analyze that Bybit hopes to further expand its market share by expanding into new regions, but this decision contradicts the cautious style of Bybit’s management.
Bybit had previously withdrawn its application for a Hong Kong license because Hong Kong does not allow the development of mainland China business entities. Opening registration for mainland China could bring more users to Bybit, but it may also face stricter regulatory scrutiny and potential legal risks.
Yesterday, the South China Morning Post interviewed Lawyer Honglin regarding this matter. I said the main reason is probably to capture more market share and make money. With exchanges like Binance as wolves in front and Bitget as tigers behind, the second-tier exchanges actually have a harder time during this bull market. There isn’t much time left for altcoins, retail investors, or exchanges in this wave.
Friends in the compliance exchanges sector are gradually realizing a problem, compliance is good, but too much of it can be harmful. Compliance is a double-edged sword. With a license, it is convenient for projects to boast about themselves and appear strong, but at the same time, it limits what can be done and ultimately reduces earnings.
Looking at the situation in Hong Kong, most entrepreneurs who were enthusiastic about applying for exchange licenses have recently withdrawn their applications. This is because the market environment in Hong Kong is unfavorable, the cost of obtaining a license is high, and the returns are low, so why bother doing it.
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