Bybit will stop servicing clients in Uzbekistan from December 6

What’s new? Leading centralized crypto exchange (CEX) Bybit will stop serving users from Uzbekistan, citing the actions of local regulators. Starting December 6, new position opening capabilities and access to all exchange products, including spot and derivatives trading, revenue programs, and loans, will be disabled for users residing in the country.

Press release

What else is known? Exchange representatives urged customers affected by these changes to close positions in all products and withdraw cryptocurrencies and fiat from their accounts.

Following this, on January 6, 2025, all open positions will be closed automatically and loan repayments will start, and Bybit’s crypto debit card services will also cease.

Starting January 7, account balances that fall below the minimum withdrawal threshold will be converted to Mantle (MNT) tokens, allowing them to be sent to external wallets.

“It has always been Bybit’s primary objective to operate our business in compliance with all relevant rules and regulations. In light of recent developments from the Uzbekistan regulator, Bybit will stop offering our products and services to Uzbekistan residents,” the exchange team concluded.

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According to the website of the National Agency of Perspective Projects (NAPP) of Uzbekistan, which acts as a regulator of the crypto industry, the latest cryptocurrency-related appeal was a comment published on September 26 regarding the Hamster Kombat tap game for Telegram. Officials clarified that trading of the HMSTR native token is allowed through national service providers.

Even before the launch and airdrop of the asset, Bybit opened a pre-market for HMSTR, and on September 26, listed it. At the same time, Bybit is not listed in the register of service providers in the sphere of crypto asset turnover, compiled by the NAPP.

Crypto regulation in Uzbekistan. In 2022, the country introduced a regulatory framework for the crypto industry, under which the NAPP became the main regulator of trading and mining, responsible, among other things, for issuing licenses.

Transactions with crypto assets are only allowed to be conducted through licensed legal entity providers. The decree also banned anonymous cryptocurrencies such as Zcash and Monero.

Following this, NAPP officials restricted access to unlicensed crypto exchanges and exchangers, including foreign platforms, and a monthly tax was also imposed on crypto companies.

In 2023, the central bank restricted the use of proceeds from crypto exchanges to non-residents: they can only spend the proceeds to buy digital assets or repatriate them abroad.

In January 2024, a decree was issued on introducing administrative and criminal liability for illegal mining and circulation of digital assets, which came into force in April. Following this, in March, one of the largest centralized crypto exchanges OKX stopped operating on the local market without explanation.

At the same time, the NAPP doubled the amount of monthly fees on crypto exchanges due to their high profitability.

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In November, Uzbekistan ranked 33rd in the world and first in the CCA (Central Asia and the Caucasus) region on the cryptocurrency adoption index, according to a report by RISE Research and Freedom Horizons, supported by KMPG and Mastercard.