Bybit, a prominent global cryptocurrency exchange, has announced it will discontinue withdrawal and custody services for its French users effective January 8, 2025, at 8:00 AM UTC. This decision arises from increased regulatory scrutiny by French financial authorities, reflecting a broader trend of tightening cryptocurrency regulations worldwide.
Bybit has advised affected users in France to withdraw their funds prior to the deadline to prevent any issues related to account access or fund transfers. In compliance with regulatory requirements, Bybit plans to transfer unclaimed assets valued over 10 USD Coin (USDC) to Coinhouse, a licensed cryptocurrency custodian in France. For accounts holding less than 10 USDC, Bybit will apply a termination fee equal to the balance, effectively closing these accounts.
Transfer Process and Verification Requirements
Post January 8, Bybit will temporarily pause withdrawals during the transfer process to Coinhouse, expected to last until January 16, 2025. French users with pre-existing verified Coinhouse accounts, where details match those on Bybit, will have their assets transferred seamlessly and should see their balances updated shortly after January 16.
Users without a Coinhouse account are required to register and undergo a full Know Your Customer (KYC) process to access their funds. Bybit has emphasized that there will be no fees for converting assets to USDC or for the transfer itself. However, Coinhouse will impose a custody fee of either 0.16% of the asset value or 1 USDC per month, whichever is higher, for unverified accounts until the KYC process is completed.
The move by Bybit aligns with a broader regulatory shift in France, where the government has been enhancing its framework for cryptocurrency service providers to bolster consumer protection and financial stability. In December 2022, the French Senate’s finance commission recommended accelerating the mandatory licensing for crypto firms, aiming to phase out the ability for companies to offer crypto financial services without full authorization by 2026. This initiative is partly a response to global market disruptions and is intended to ensure all operational firms are fully compliant with the Autorité des Marchés Financiers, the French financial regulatory body.
This regulatory shift poses significant challenges and changes for Bybit and its French users. While the transition to a licensed custodian may provide enhanced security and compliance with local regulations, it also imposes new hurdles, such as the need for thorough KYC procedures and potential fees associated with unverified accounts.
| Date | Event |
|---|---|
| Jan 8, 2025 | Bybit halts withdrawal and custody services in France |
| Jan 8-16, 2025 | Temporary halt on withdrawals during transfer process |
| Jan 16, 2025 | Completion of asset transfer to Coinhouse |
Author’s Opinion
The decision by Bybit to halt services in France is a stark reminder of the impacts of regulatory changes on cryptocurrency exchanges and their users. As nations like France move to tighten their regulatory grips, crypto exchanges must navigate these changes carefully to ensure compliance while minimizing disruption to their services. This situation highlights the evolving nature of the global financial landscape, where digital assets are increasingly subject to scrutiny that could shape their future accessibility and utility. For users, it underscores the importance of staying informed and prepared for potential changes that could affect their digital asset holdings.
Featured image credit: user6702303 via Freepik
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