The U.K.'s Financial Conduct Authority (FCA) issued a warning against Bybit one week ahead of the crypto derivatives exchange's announcement that it is ceasing services in the country.
The FCA told The Block on Monday that it issued the warning against Bybit on February 24, alerting the public that the exchange has been operating in the U.K. without authorization. A week later, Bybit announced on March 5 that it would stop servicing U.K. residents from March 31.
"This firm is not authorized by us and is targeting people in the UK," the FCA said in the warning. "Based upon information we hold, we believe it is carrying on regulated activities which require authorization."
The FCA's ban on crypto derivatives went into effect on January 6 of this year, meaning all existing exchanges operating to or from the U.K. have to be registered with the regulator as of the date.
As for investors, that means they cannot directly trade into crypto derivatives and can only access crypto derivatives on a reverse solicitation basis, and they could still use other countries' firms to trade.
But since Bybit was "targeting people in the UK," according to the FCA, the exchange had to take action. On March 5, Bybit announced: "To comply with the Financial Conduct Authority's (FCA) ban of crypto derivatives, Bybit will cease to provide services to customers from the United Kingdom."
Bybit, headquartered in Singapore and registered in the British Virgin Islands, is the third-largest bitcoin futures exchange in terms of open interest, according to The Block's data dashboard. The exchange has nearly $2.2 billion worth of open interest or the value of outstanding derivative contracts that are yet to be settled.