With new marketing regulations set to take effect in the United Kingdom next month, crypto exchange Bybit doesn’t expect to be able to continue operating within the country.
The exchange’s CEO, Ben Zhou, claims that any crypto firm within U.K. borders may be held accountable for solicitation simply for using the English language.
Troubles With New Marketing Rules
As reported by The Block, Zhou said regulation is becoming “more strict,” and that the exchange will likely have to “retreat in many countries” – the U.K. being one of them.
The nation’s Financial Conduct Authority (FCA) contacted Bybit, alongside rival exchanges like Binance and OKX to verify how such firms will deal with its new law, which restricts how crypto firms are allowed to service U.K. citizens.
Until October 8, such firms can continue using reverse solicitation, whereby firms can serve U.K. clients as long as the business relationship is solely initiated by the customer. After that, the rules become far more difficult to grapple with.
“The new law is that if you use English as a language, they will see you as trying to solicit their users, so you cannot claim that you are in reverse solicitation,” Zhou said. “Everyone is in trouble. So everyone is thinking of plans for how to deal with this new law.”
The law also requires that any promotions for crypto companies be approved, and not inappropriately incentivize people to invest. Those who fail to follow the rules by next month may face an unlimited fine, or up to two years in prison.
For Zhou, simply exiting the UK appears like the easiest option. “We recently exited France,” he noted.
United Kingdom Versus United States
Earlier this year, the United Kingdom passed the Financial Services and Markets Bill, establishing crypto and stablecoins as regulated financial activities under the purview of the Financial Conduct Authority (FCA). The country’s Prime Minister, Rishi Sunak, has expressed interest in turning the U.K. into a digital asset hub.
That said, the region’s tough regulations may spoil the dreams of U.S.-based crypto firms wishing to flee to the U.K. from their home region’s hostile regulatory climate. Coinbase CEO Brian Armstrong has suggested such measures should his company fail to secure legal clarity on crypto in the U.S.
The Securities and Exchange Commission (SEC) has already launched numerous lawsuits against firms like Coinbase, Kraken, and Binance for violating securities laws.