Global cryptocurrency exchange Bybit has announced a temporary suspension of its trading services in India, effective January 12, 2025, at 8:00 AM UTC. This decision comes in response to recent regulatory developments in the country.

Scope of Suspension

Indian users will face several restrictions:

• Trading Restrictions: Inability to open new trades or access certain products on the Bybit platform.
• Derivatives Positions: Existing positions will be placed in "Close-Only" mode, allowing users to close but not modify or add to these positions.
• Deposits: Both cryptocurrency and fiat deposits will be temporarily halted.
• Withdrawals: Users will retain the ability to withdraw funds without interruption.

Compliance Efforts

Bybit is actively working to register as a Virtual Digital Asset Service Provider with India's Financial Intelligence Unit (FIU). The exchange anticipates completing this process in the coming weeks, aiming to resume full services thereafter.

Global Regulatory Challenges

This is not Bybit's first encounter with regulatory hurdles:

• France: Ceased operations in August 2024 due to regulatory pressures; efforts are ongoing to secure a license for resumption.
• Malaysia: In December 2024, the Securities Commission ordered Bybit to halt operations for operating an unregistered crypto exchange; the exchange complied promptly.

India's Regulatory Landscape

India's approach to cryptocurrency regulation has been stringent:

• Taxation: In 2022, the government imposed strict crypto taxes, leading many traders to shift to international exchanges.
• Global Consensus: During its G20 presidency in 2023, India prioritized achieving global consensus on crypto policies, successfully obtaining agreement from all G20 members on global guidelines.
• Current Stance: Despite lobbying efforts, the government has maintained rigid crypto tax rules, with Finance Minister Nirmala Sitharaman upholding the controversial crypto tax regulations during the announcement of the fiscal year 2024-2025 budget.

Our Opinion on the News

Bybit's suspension of services in India underscores the complexities and challenges of operating within the country's evolving regulatory framework. While the exchange's commitment to compliance is evident, the temporary halt may disrupt trading activities for Indian users and could influence market dynamics. This development highlights the broader implications of regulatory policies on the growth and accessibility of cryptocurrency markets in India and beyond.