Bybit, the second-largest centralized exchange by daily trading volume, announced that it will temporarily halt its crypto trading services in India due to changing regulatory requirements.
The suspension will take effect on January 12 at 8:00 am UTC and will impact cryptocurrency trading, new account registrations, and order placements across various products.
Regulatory Challenges for Bybit India
The company cited its commitment to adhering to applicable laws and regulations as the reason for the decision. While trading services will pause, the exchange confirmed that users will still be able to withdraw funds without restrictions.
“We have taken this measure while we continue to work closely with the regulator to finalize our registration as a Virtual Digital Asset Service Provider in India, which we expect to secure in the coming weeks,” Bybit wrote.
However, it’s important to note that the exchange specifically claimed this suspension was temporary. This could be because it’s attempting to resolve the regulatory issues before continuing operations.
“Bybit is working to obtain a license and expects to finalize the process within a few weeks,” an Indian crypto influencer ‘Berit’ said.
This is not the first time Bybit has faced regulatory challenges. In August 2024, the platform stopped operations in France due to regulatory pressure. At the time, Bybit stated it was working toward obtaining the necessary license to resume services in the region.
Additionally, Japan’s Financial Services Agency recently issued warnings to Bybit and four other international exchanges for operating without proper registration.
India’s regulatory environment has become increasingly stringent for cryptocurrency companies. Authorities have been cracking down on tax compliance, revealing $97 million in unpaid taxes from crypto exchanges, including Binance and WazirX.
Binance reportedly owes $85 million, while WazirX and other entities have partially resolved their tax liabilities.
In recent months, Indian regulators have also expressed support for banning private cryptocurrencies like Bitcoin and Ethereum. They are promoting Central Bank Digital Currencies (CBDCs) as a safer and more efficient alternative for advancing financial inclusion.
Officials argue that the risks associated with private digital assets, including stablecoins, outweigh their potential benefits.
Despite these challenges, India’s cryptocurrency market continues to grow. In 2024, the country ranked among the top 10 in the Global Crypto Adoption Index, highlighting the increasing interest and participation of Indian users in the digital asset space.
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