The UK is set to introduce sweeping cryptocurrency regulations in October 2025, marking a pivotal shift in how digital assets are marketed and managed within the country. As part of this transformation, major crypto exchange Bybit announced on September 22 that it would proactively suspend its services for UK users. This decision wasn't made in isolation—it reflects a broader industry response to new rules enforced by the Financial Conduct Authority (FCA), aimed at protecting retail investors from high-risk financial products.
This article unpacks the regulatory landscape behind Bybit’s move, explores the implications for global crypto firms, and explains what both businesses and consumers need to know about the UK’s evolving approach to digital asset oversight.
The New Regulatory Framework: What Changed?
At the heart of the shift is the Financial Services and Markets Act 2023, which amends the original 2000 FSMA legislation. This update formally brings cryptoassets into the UK’s existing financial regulatory framework, particularly under the scope of financial promotions.
Under these revised rules, any company promoting qualifying cryptoassets to UK consumers must comply with strict marketing guidelines—or face severe penalties, including unlimited fines or even criminal prosecution. The FCA now has explicit authority over crypto-related promotional activities, even if the firm is based overseas.
“Buying crypto is a personal decision. But research shows many regret acting too quickly. Our rules give people time and clear risk warnings so they can make informed choices,” said Sheldon Mills, Executive Director for Consumers and Competition at the FCA.
The regulation applies broadly to what the FCA defines as “qualifying cryptoassets”—digital assets secured by cryptography that represent value or contractual rights and can be transferred or exchanged. This includes major decentralized coins like Bitcoin and Ethereum, as well as centralized projects such as ICOs.
Notably excluded are e-money, fiat currencies (including digital forms), and certain utility tokens not designed for resale.
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Key Compliance Requirements for Crypto Firms
To legally promote crypto products in the UK, companies must meet one of four conditions:
- Be an FCA-authorized firm.
- Operate under an upcoming dedicated regulatory regime (currently under parliamentary review).
- Be registered under the 2017 Anti-Money Laundering Regulations—even without full FCA authorization.
- Fall under a specific exemption in the Financial Promotion Order (FPO), though current exemptions for high-net-worth individuals do not apply to crypto.
Additionally, all promotional content must include clear, prominent risk warnings. For example:
“Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you are unlikely to be protected if something goes wrong. Take two minutes to learn more.”
Firms must also provide a clickable link directing users to further educational resources on crypto risks.
The 24-Hour Cooling-Off Period
One of the most impactful changes is the mandatory 24-hour cooling-off period for first-time investors. Before any promotional material—classified as a Direct Offer Financial Promotion (DOPF)—can lead to investment action, new users must receive personalized risk disclosures and then wait at least 24 hours before proceeding.
Only after they reconfirm their intent post-cooling-off can firms continue engagement. This measure aims to reduce impulsive decisions and ensure informed participation.
Why Did Bybit Suspend Its UK Operations?
Bybit cited Policy Statement PS23/6, released by the FCA in June 2023, as the primary reason for its suspension. Rather than risk non-compliance, the exchange chose to pause operations entirely.
Starting October 1, 2025:
- No new account registrations from UK residents.
- From October 8 onward, existing users cannot deposit funds, open new positions, or increase existing leveraged trades.
Users are encouraged to close positions and withdraw funds. However, Bybit emphasized that this is a temporary pause:
“Suspending services allows us to focus resources on meeting UK regulatory requirements and potentially re-entering the market in compliance.”
This strategic retreat mirrors actions taken by other platforms navigating complex compliance landscapes.
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FAQ: Understanding the UK’s Crypto Marketing Rules
Q: Does this regulation apply only to UK-based companies?
A: No. The rules have extraterritorial reach—any firm targeting UK consumers, regardless of location, must comply.
Q: Are NFTs affected by these new rules?
A: Likely not. Non-fungible tokens used primarily for art or collectibles fall outside the definition of qualifying cryptoassets unless they function as investment vehicles.
Q: Can crypto companies still run referral programs?
A: No. Incentives like “refer-a-friend” bonuses or sign-up rewards are now prohibited due to their potential to encourage reckless investing.
Q: What happens if a company violates these rules?
A: Violations constitute criminal offenses, punishable by unlimited fines and up to two years in prison.
Q: Will there be special rules for experienced investors?
A: Yes. While current FPO exemptions don’t cover crypto, the government plans to introduce tailored provisions for sophisticated investors.
Q: How does this compare to US regulation?
A: Unlike the SEC’s focus on classifying tokens as securities via the Howey Test, the UK emphasizes disclosure and marketing controls—aiming to protect users without stifling innovation.
Broader Industry Impact and Strategic Shifts
These regulations place significant operational burdens on crypto firms. Compliance requires overhauling marketing strategies, updating website content, revising social media practices, modifying user onboarding flows, and maintaining detailed audit trails of customer communications.
For international exchanges, the cost of full compliance may outweigh the benefits of serving the UK market—prompting some to exit temporarily or permanently.
Yet, the UK’s approach stands out for balancing investor protection with innovation. By regulating how crypto is promoted rather than what can be offered, it avoids heavy-handed restrictions while fostering responsible growth.
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Final Thoughts
The suspension of Bybit’s UK services underscores a turning point in global crypto regulation. As governments refine their oversight models, firms must prioritize compliance, transparency, and user education.
The UK’s model—centered on risk disclosure, cooling-off periods, and inclusive definitions of promotional activity—could serve as a blueprint for other jurisdictions aiming to protect consumers without halting technological progress.
For users, this means safer access to digital assets. For businesses, it demands greater accountability—but also opens doors to long-term legitimacy in regulated markets.
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