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Silver lining for Bybit with UAE trading license approval

Web3 & Enterprise·March 05, 2025, 5:36 AM

After being targeted in a $1.4 billion hack, the global crypto exchange platform Bybit was awarded in-principle approval to establish itself as a Virtual Asset Platform Operator (VAPO) within the United Arab Emirates (UAE).

 

While Bybit announced the milestone via a press release published on Feb. 27, the approval had been awarded on Feb. 18, three days before the platform was hacked.

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Photo by Saj Shafique on Unsplash

Regulatory challenges

In addition to the recent exploit, the crypto exchange platform had been having difficulties on the regulatory front in recent months, and from that perspective, this licensing award is a welcome development.

 

Last December, the Malaysian Securities Commission reprimanded the platform and its CEO, Ben Zhou, for carrying out digital asset trading activities in Malaysia without having obtained the necessary licensing. Consequently, the firm left the Malaysian market, promising to return once it had obtained the required licenses.

 

For similar reasons, Bybit left the Indian market in January, citing a need to “operate in full compliance” with local regulations. The company said that it was working with the regulator to finalize its registration as a Virtual Asset Service Provider (VASP) in India.

 

The platform also experienced difficulties in complying with the recently introduced Markets in Crypto Assets (MiCA) regulation in Europe. However, it has been working with regulators in Austria in an effort to acquire MiCA licensing. Consequently, the French regulator, Autorité des Marchés Financiers, removed the firm from its blacklist.

 

Earlier this month, Japan’s Financial Services Agency (FSA) ordered Apple and Google to remove the apps of a number of unregistered crypto platforms, including Bybit, from the Japanese versions of their app stores. 

 

Commenting on this recent achievement in the UAE, Ben Zhou stated:

 

“This approval marks a crucial step in our journey to providing secure and transparent crypto trading solutions. Bybit remains dedicated to working hand-in-hand with regulators to foster a compliant and innovative digital asset ecosystem to both retail and institutional investors in the UAE.”

 

Hack fallout

It’s unclear to what extent the recent hack, which is understood to be one of the largest thefts of any kind, may be diverting resources and focus away from the efforts the company was making to address regulatory issues globally. However, it’s reasonable to assume that recent events make for a challenging time for the company.

 

On Feb. 26, the Federal Bureau of Investigation (FBI) in the United States said that North Korea was responsible for the hack. The agency warned exchanges to freeze transactions linked to the stolen funds.

 

The FBI outlined that “TraderTraitor” actors have been converting the funds to Bitcoin and other digital assets in an effort to launder the funds and eventually extract the funds in fiat currency.

 

North Korea’s Lazarus hacking group has gained notoriety for its successes in hacking crypto platforms and the sophisticated nature of the attacks mounted in the process. The group is suspected of having hacked the Indian crypto platform WazirX last year, which resulted in the theft of $235 million in digital assets.

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Blockchain security firm Verichains joins as newest Node Council Partner on WEMIX3.0

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