Bybit Returns to the UK: What Its Second Act Says About Crypto Regulation in London

Two years ago, the United Kingdom looked like hostile territory for global crypto exchanges. In October 2023, the Financial Conduct Authority (FCA) introduced strict financial promotion rules for digital assets, forcing any platform serving UK residents to treat its marketing like the advertising of high-risk investment products. Several offshore firms decided that adapting would be too costly or complicated and chose the simpler option: they stopped onboarding UK retail users altogether.

Bybit was one of the most visible names in that wave of exits. Now, it is one of the first major platforms to come back.

The company has re-opened services for UK customers, starting with spot trading in more than 100 pairs. It is doing so in a very different regulatory environment, and with a very different structure. Rather than operating through its own local licence, Bybit is working in partnership with Archax, a London-based firm that already holds a rare set of permissions from the FCA. Archax can approve and communicate financial promotions for other firms that do not yet have their own UK authorisation.

On the surface this may look like a typical expansion announcement. Underneath, it is a sign of how the UK market for digital-asset services is maturing. It also shows how exchanges are re-engineering their business models to live inside a more demanding regulatory perimeter, instead of operating around it.

1. Why Bybit Left the UK in the First Place

To understand why the return matters, it helps to revisit why Bybit left. The key issue was not market demand—UK users were active and profitable—but the financial promotion regime that came into force in late 2023.

Under those rules, any invitation or inducement to engage in crypto investment targeted at UK customers is considered a regulated financial promotion. That includes not just banner adverts or social media posts, but also website copy, emails, and even in-app notifications. Promotions must either:

Be issued directly by an FCA-authorised firm, or
Be approved by such a firm, which then takes responsibility for ensuring the content is fair, clear and not misleading.

On top of that gateway requirement, the FCA imposed specific conduct expectations for firms marketing crypto to retail users. These include prominent risk warnings, clear disclosure of fees, restrictions on incentives, and assessments of whether a product is appropriate for the customer’s level of experience.

For an offshore exchange without a local licence and with global marketing strategies built around speed and flexibility, these changes were a shock. The safest short-term decision for Bybit in 2023 was to pause UK operations rather than risk breaching a new and unfamiliar regime.

2. What Changed: Policy Signalling from Westminster

Since then, London’s tone on digital assets has evolved. The UK government has repeatedly stated its ambition to become a hub for regulated crypto activity. More concretely, it has committed to building a comprehensive regulatory framework for digital assets by 2027. That framework is expected to cover issuance, exchange operations, stablecoins and market-structure rules, bringing much of the sector closer to the standards applied to other financial instruments.

This long-term roadmap matters for firms like Bybit. It reduces the risk that the rules will change in unpredictable ways, and it signals that policymakers see a future for compliant platforms in London, not just a list of prohibitions. With that backdrop, investing in a UK-ready business model makes strategic sense.

3. The Archax Bridge: How Bybit Can Operate Without Its Own Licence

Bybit’s return is possible thanks to an important nuance in UK law. While only authorised firms can issue or approve financial promotions, those firms can work with unlicensed partners as long as they are prepared to review and sign off communications.

Archax is one of a small number of UK platforms that have obtained a special set of permissions under the FCA’s regime. It acts as a gateway: approved materials from Bybit can be distributed to UK users under Archax’s oversight, provided they meet the regulator’s standards on clarity, risk disclosure and suitability checks.

In practice, this means:

Bybit can offer access to a spot trading interface for UK residents, but its promotions must go through an Archax review process.
Risk warnings, educational content and sign-up flows need to be designed with UK rules in mind, including any cooling-off periods and appropriateness assessments required for high-risk products.
If the FCA concludes that a promotion is misleading, Archax—not just Bybit—would face questions. This gives the licensed firm strong incentives to enforce discipline.

The result is a hybrid model: an international exchange front-end combined with a UK-regulated gatekeeper for marketing and compliance. It is not unique—similar structures exist in other parts of the financial sector—but it is relatively new in crypto and is likely to become more common.

4. From "Move Fast" to "Explain First": What the New Rules Mean for Users

One of the reasons policymakers tightened the regime in 2023 was concern that retail users were encountering complex products through campaigns that emphasised excitement over risk. The new framework pushes platforms in the opposite direction.

For Bybit, operating under UK standards means:

• More explicit risk communication. Marketing materials must clearly explain that digital assets can be volatile, that customers may lose money, and that returns are not guaranteed.

• Greater emphasis on education. To show that promotions are fair and balanced, firms are incentivised to provide context: how order types work, what fees apply, and how to interpret market information.

• Stricter onboarding journeys. New users are likely to face questionnaires on their experience and objectives, and some will be asked to complete basic comprehension checks before they can access the full product range.

• Limits on incentives. Promotions based on time-limited bonuses or aggressive referral rewards are discouraged or restricted, shifting the focus to product quality rather than short-term inducements.

From an educational standpoint, these changes should, in theory, reduce the chance that individuals treat trading as a quick path to riches without understanding the risks. From a business standpoint, they force exchanges to differentiate on reliability, transparency and user support rather than purely on marketing flair.

5. Why Start with Spot Trading?

Bybit’s UK relaunch focuses on spot markets with more than 100 trading pairs. That choice is not accidental. Spot trading is generally viewed as less complex than derivatives, and regulators typically consider it more suitable as a starting point for retail participation.

There are several reasons why spot markets fit comfortably within the UK’s current policy direction:

They involve direct ownership of digital assets rather than synthetic exposure.
Pricing is easier to understand and explain, which aligns with the FCA’s expectations around fair communications.
Risk management is largely in the user’s hands—position sizes and time horizons—rather than being driven by embedded leverage.

Bybit has indicated that it plans to expand its product line over time, but will do so in ways that match UK expectations. That may mean tighter limits on complex instruments and a heavier emphasis on educational resources. In a world where regulatory goodwill matters as much as user growth, this slower, more measured approach is rational.

6. Strategic Significance: Why London Still Matters to Global Exchanges

Despite the difficulties posed by the promotion regime, the UK remains an attractive market for several reasons:

High disposable income and digital adoption. UK households and small businesses are comfortable with online financial services and have experience with multi-asset investing.
Global financial centre status. London’s role in foreign exchange, derivatives and capital markets means that being available to UK clients carries reputational weight beyond the country’s population size.
Regulatory credibility. While rules may feel strict, once a firm is able to operate within them, that compliance can be a selling point in other jurisdictions.

For Bybit, returning to this environment sends a message: the exchange is prepared to invest in long-term legitimacy, not just short-term volume. It also positions the platform to benefit if the UK government’s 2027 framework successfully turns London into a magnet for institutional digital-asset activity.

7. Implications for Other Platforms

Bybit’s structure with Archax could become a playbook for other exchanges that previously withdrew from the UK. Rather than building a local entity from scratch, they may seek partnerships with firms that already hold FCA permissions and are comfortable shouldering the responsibilities attached to approving promotions.

However, this approach is not a free pass. Any licensed partner must perform due diligence on the products being promoted and oversee ongoing communications. The FCA has made clear that it will hold approvers accountable if they sign off on material that downplays risks or overstates benefits. That means we are likely to see selective partnerships, where only exchanges willing to align their internal standards with UK expectations are welcomed.

Over time, this could split the market into two groups:

Platforms that choose to integrate with regulated gateways and adapt to those standards, gaining access to mainstream users in return.
Platforms that prefer a lighter regulatory footprint and focus on other regions, but accept that their ability to reach UK retail users will remain limited.

8. What UK Users Should Watch For

For individuals considering using Bybit’s UK offering, the return raises several practical questions. An educational lens suggests focusing on at least three areas:

8.1 Legal relationships and protections

Even though promotions are approved by Archax, users should understand which entity actually holds their assets and executes trades. In many cases, funds and positions may still sit with an offshore Bybit group company. That does not automatically make the service unsafe, but it does affect which legal protections apply in the event of disputes or operational problems.

8.2 Custody and transparency

Users should look for information on how digital assets are stored, what proportion is kept in cold storage, and whether the platform provides proof-of-reserves or similar disclosures. The FCA’s emphasis on fair communication increases the likelihood that such details will be published, but it is still important for customers to read them carefully.

8.3 Personal risk management

No regulatory regime can eliminate market risk. Even on a fully compliant platform, digital-asset prices can fluctuate significantly. Educational best practice suggests that users should:

Invest only amounts they can afford to see fluctuate in value.
Diversify rather than concentrating exclusively in a single asset or platform.
Take advantage of any learning resources the exchange provides, from glossaries to webinars and tutorials.

9. A Glimpse of the Next Phase of UK Crypto Policy

Bybit’s comeback is not an isolated event. It fits into a broader pattern in which the UK is trying to move from ad-hoc guidance to a comprehensive rulebook. That process involves three pillars:

Clarity on marketing. The 2023 financial promotion rules were the first step, setting a baseline for how crypto products can be presented to the public.
Clarity on licensing. Over the next few years, policymakers are expected to define which digital-asset activities will require specific permissions and how capital, conduct and reporting standards will apply.
Clarity on market structure. Debates are ongoing about the separation (or integration) of exchange, brokerage and custody functions, and about how stablecoins and tokenised assets should interact with payment systems.

Exchanges that adapt early to the spirit of these changes—not just the letter of individual rules—may find themselves in a stronger position when the full framework arrives. Those that wait for absolute certainty could discover that important market share has already been captured by competitors who learned to live with stricter standards.

10. Conclusion: A Test Case for Regulated Expansion

Bybit’s return to the UK, in partnership with Archax and under the FCA’s promotional regime, is more than just another exchange updating its country list. It is a test case for whether global platforms can align high-growth business models with demanding consumer-protection rules in a major financial centre.

For policymakers, it offers an opportunity to see whether the framework they designed can attract responsible participants without opening the door to practices they consider harmful. For other exchanges, it provides a concrete example of how to re-enter a regulated market after an initial retreat. For users, it underlines the importance of reading not only the exciting parts of a platform’s announcement, but also the fine print about how products are marketed, who is responsible for them, and what risks remain.

Whatever one thinks of specific rules, the broader direction is clear: the era when large offshore platforms could serve major jurisdictions with minimal adaptation is fading. The future belongs to firms that can speak the language of both engineering and regulation. Bybit’s second act in the UK is an early chapter in that story.

Disclaimer: This article is for educational and informational purposes only and does not constitute investment, legal or tax advice. Digital assets are volatile and involve risk. Always conduct your own research and consult a qualified professional before making financial decisions.