Can Chinese users buy Bitcoin and XRP using ByBit, the third largest offshore exchange, which has just opened trading for Chinese people?

• Bybit allows Chinese users to register, reversing its strict ban, reflecting a change in its operating policy.
• Bybit’s decision to allow Chinese users raises internal concerns about potential regulatory repercussions and compliance challenges.

Bybit, the world’s third-largest offshore cryptocurrency exchange, recently allowed users in China to register and authenticate on its platform. This decision marks a change in Bybit’s long-standing policy to prohibit Chinese usersreflecting a cautious approach on the part of its management team.

Despite previous restrictions, data suggests that the number of potential Chinese users could reach tens of millions. Many Bybit competitors have already registered for this market, which may have influenced Bybit’s recent decision. However, this move has created internal concerns among Bybit employees, who are wary of potential regulatory repercussions.

Interestingly, Bybit’s certification page still lists China among the jurisdictions where it does not offer services. This inconsistency highlights the complex regulatory sector in which Bybit operates. In addition to China, Bybit restricts its services to the United States, Singapore, Quebec, Ontario, Iran, Sudan and Syria.

Our editor-in-chief and cryptocurrency analyst shared his point of view, reflecting how important and notable this would be for the trading community.

Bybit’s regulatory challenges are not limited to China

The company recently withdrew its license application in Hong Kong, where strict regulations have made it difficult for cryptocurrency companies to operate. Hong Kong bans entities from doing business in mainland China, suggesting Bybit may abandon its plans for a Hong Kong License completely. At the moment, Bybit is based in Dubaia move that may have eased regulatory pressures from China.

Exclusive: The third largest offshore exchange, Bybit, has suddenly opened registration and authentication for users in China. Bybit has long strictly prohibited registration and use for all Chinese users. The management team has been very cautious about this. pic.twitter.com/m71BdT4KAq — Wu Blockchain (@WuBlockchain) June 5, 2024

Bybit’s operational shift from Singapore to Dubai could be another factor influencing its decision to reopen registration for Chinese users. The less stringent regulatory environment in Dubai could provide Bybit with more flexibility in managing its global operations.

Chinese users continued to access Bybit services bypass VPN firewalls, acquiring accounts from other regions. This workaround has been a common practice, reflecting the persistent demand from Chinese residents to participate in cryptocurrency trading.

Bybit previously withdrew its Hong Kong license application. Hong Kong does not allow any entity to do business in mainland China. This also means that Bybit may withdraw from applying for a Hong Kong license. Currently, Bybit is headquartered in Dubai.

— Wu Blockchain (@WuBlockchain) June 5, 2024

Bybit’s regulatory problems go beyond China and Hong Kong

In France, the Autorité des Marchés Financiers (AMF) accused Bybit of operating without the necessary license. This incident highlights the fragmented and challenging legal environment that international cryptocurrency exchanges face as they navigate different regulatory frameworks.

Bybit’s reopening to Chinese users amid these regulatory challenges highlights the complexities and risks associated with global cryptocurrency operations. The company’s actions suggest a strategic balancing act, trying to expand its user base while managing compliance with various international regulations.

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