Embattled cryptocurrency exchange Bybit is pressing forward with its regulatory ambitions despite suffering one of the largest hacks in crypto history. The exchange announced on February 27 that it had secured in-principle approval from the United Arab Emirates (UAE) Securities and Commodities Authority (SCA) to establish a virtual asset platform operator in the country.
Regulatory Milestone Amid Crisis
Bybit’s approval marks a crucial step toward obtaining a full operational license in the UAE, positioning it to offer a wide range of digital asset services to both retail and institutional investors. The in-principle approval, dated February 18, came just days before the exchange lost $1.4 billion in a security breach on February 21. The hack, reportedly one of the biggest in crypto history, occurred during a transfer between Bybit’s cold and hot wallets.
Despite the setback, Bybit co-founder and CEO Ben Zhou emphasized the company’s commitment to compliance and security. “This approval marks a crucial step in our journey to providing secure and transparent crypto trading solutions,” Zhou stated, reaffirming Bybit’s dedication to regulatory cooperation.
Global Expansion and Compliance Challenges
Bybit’s regulatory push extends beyond the UAE. On February 25, the exchange announced its return to India after securing the necessary approvals and settling a $1 million fine imposed by the Financial Intelligence Unit (FIU) for operating without proper registration. The company is also strengthening its presence in Georgia, Kazakhstan, and Turkey, signaling an aggressive expansion strategy despite recent hurdles.
However, Bybit faces ongoing compliance challenges in other jurisdictions. In late 2024, the exchange announced temporary restrictions on its European Economic Area (EEA) operations to align with the Markets in Crypto-Assets (MiCA) regulations. Bybit is currently pursuing a MiCA license in Austria to regain access to the European market. Meanwhile, Malaysia’s Securities Commission ordered Bybit to cease operations in the country in December 2024 due to regulatory noncompliance.
Also Read: Bybit Hacker Launders $335M as Stolen Funds Keep Moving!
The Road Ahead
As Bybit works to rebuild trust following the recent hack, securing a full UAE operational license could be a pivotal moment for the exchange. The UAE’s growing status as a crypto-friendly hub offers Bybit a vital opportunity to stabilize its operations and restore investor confidence. Whether the exchange can fully recover and navigate regulatory challenges remains to be seen, but its commitment to compliance signals a determined effort to move forward.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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