French Regulator Reiterates Crypto Giant ByBit Is Blacklisted, Signals Further Enforcement Action

French securities regulator the Authorité des Marchés Financiers (AMF) on Thursday reminded French investors that cryptocurrency exchange ByBit is blacklisted in the country over its alleged non-compliance with local regulations.

The French regulator called on retail investors "to exercise the utmost vigilance with regard [to] proposal investments made to the public residing in France by the digital asset trading platform Bybit," according to a notice released Thursday.

It noted that ByBit has been blacklisted by the AMF since May 2022 and is "not authorized to provide its digital asset services in France" as it did not comply with the country's related regulations.

It further explained that ByBit did not register with the AMF as a digital asset provider (DASP) so the regulator has the right to take "legal action" and block the exchange's website in the country, suggesting further enforcement action by the regulator. "All investors must make arrangements for the eventuality that the platform suddenly cease to provide services to the public," the regulator warned.

In September, ByBit, the current top third-largest crypto exchange by trading volume, suspended operations in the United Kingdom ahead of the new rules that Britain's Financial Conduct Authority (FCA) was preparing to introduce at the time. "ByBit has made a choice to embrace the regulation proactively and pause our services in this market," the exchange said of its U.K. exit.

Also, last year, ByBit left the Canadian market, citing the country's regulations. The exit came after Canada released new guidance for crypto-related businesses, requiring exchange and trading platforms to receive approval from the Canadian Securities Administrators before operating in the country.

France's regulatory notice regarding ByBit also comes several months after defunct crypto exchange FTX sued the Dubai-based exchange, alleging that ByBit executives had VIP benefits that allowed it to withdraw most of its assets before the Sam Bankman-Fried crypto firm fell from grace in 2022.

FTX's bankruptcy estate further alleged that the defendants withdrew some $953 million after pressuring FTX staffers to speed up their withdrawal requests, while smaller investors and users faced excruciating delays.

This is not the first time ByBit has been at the center of regulatory scrutiny outside its home turf in the United Arab Emirates (UAE). In March, Hong Kong's Securities and Futures Commission (SFC) warned the public that the exchange has not been licensed in any way to provide crypto services in the Chinese special administrative region.

"Any person who contravenes a relevant provision may be prosecuted and, if convicted, subject to criminal sanctions," the SFC warned. ByBit has since been added to the regulator's Suspicious Virtual Asset Trading Platforms Alert List.