Is ByBit Legal In The US?
Bybit is one of the top crypto margin exchanges that enables users to buy, sell, and trade cryptocurrencies. The platform offers beginners and advanced users trading options through its spot, margin, and perpetual contracts. However, despite its popularity, the cryptocurrency exchange is not supported in all regions. This begs the question, is Bybit legal in the US? This guide seeks to answer whether US citizens can use ByBit to buy and trade cryptocurrencies.
Can You Use ByBit In The US?
No, US citizens are not permitted to trade on ByBit due to strict regulations in the United States that do not approve crypto derivative platforms. Residents that live in the USA are strictly prohibited as per the ByBit Terms of Service. The exchange complies with these restrictions by banning IP addresses that originate from the United States.
Nonetheless, there are alternate ways for users who want to trade on Bybit while residing in the US. The most common method to trade on ByBit from the US is using a virtual private network or VPN. However, using a VPN to bypass logging an IP address from the US is also in breach of the Terms of Service and is not advisable.
Why Was Bybit Banned in the US?
Although crypto trading is permitted in the US, it is still a largely restrictive activity due to ongoing regulation by the US Securities and Exchange Commission (SEC) and other related agencies. These regulators have taken a strong stance in monitoring and supervising the burgeoning crypto industry. Given this, crypto exchanges are expected to initiate KYC measures for all customers and install AML protocols to protect against illicit transactions. Due to the strict exchange registration process, several platforms like Binance and FTX, have created subsidiaries to cater to the needs of crypto investors in the USA.
While ByBit is a popular no-KYC crypto exchange, all trading platforms are also expected to register with the SEC to operate in the US. US investors are denied access because the platform is not registered with or regulated by any US government agency. Moreover, the US does not completely approve of crypto derivatives trading, which accounts for a vast majority of ByBit’s operation. However, ByBit has cited the ambiguity surrounding crypto laws in the country as the reason it does not allow US traders on its platform.
How To Use ByBit In The US?
It is possible to access the full suite of trading services on ByBit from the USA by using a VPN. The IP address will need to be set from a country that is permitted to use ByBit. As there are no strict KYC requirements, individuals can create an account with ByBit and begin trading crypto from the US. Non-verified accounts will be limited to a maximum withdrawal of 2 BTC per day. It should be noted that accessing ByBit from a restricted country (via VPN) breaches the Terms of Services, and the account can be suspended including any assets held within a ByBit wallet. Using a VPN from a permitted country is allowed.
To use ByBit with a VPN, follow these basic steps:
- Download a VPN Service. The first step is to download VPN software. Once the download is complete, install the software, create a new account, and sign in. Click on the power-like icon of a country that is supported by ByBit to connect from.
- Create an account on Bybit. Visit the ByBit website and click on the ‘Sign Up’ button. Input the email address and password and click the ‘Create Account’ icon to proceed to the next stage. As Bybit does not support US residents, they will not be able to complete the KYC verification step. USA customers will have restrictions on the daily BTC withdrawal limit.
- Deposit cryptocurrency. Bybit supports crypto deposits making it possible for users in restricted regions to fund an account. With this, US investors can easily transfer crypto from an external wallet or platform to ByBit for trading. Tap on the ‘Deposit’ button and select ‘Crypto.’ Select the crypto to be deposited and copy the wallet address. Insert the copied wallet address into the recipient address bar in the external wallet and how many coins are to be transferred. Confirm the transaction and the crypto asset would be deposited in a couple of minutes.
- Begin trading. Type the ticker symbol of the required asset in the search bar and select a preferred trading pair. Insert how much of the asset to purchase and click on the ‘Buy’ button to complete the transaction.
Is ByBit Legal To Use In The US?
There are mixed reviews online regarding the legality of Bybit. This is because no financial body regulates the activities of the cryptocurrency exchange in any of the countries where it operates. However, the platform upholds global financial laws. New users are required to complete the exchange’s know-your-customer (KYC) verification process to unlock more platform features. This requirement aligns with stipulated anti-money laundering (AML) measures to curb illicit transactions and terrorism financing.
The cryptocurrency exchange also has a strong security system comprising 2FA, address whitelisting, and offline cold wallet storage. In its four-year time, the platform has not been breached or hacked.
Popular Alternatives To ByBit For The USA
There are several alternative crypto trading platforms to ByBit that are legal to use in the US. The most popular exchanges with similar features, markets and fees are Coinbase, eToro, Kraken, FTX.US and Binance.US. These platforms are licensed to operate within the US.
|Exchange||Crypto Assets||Trading Fees||Rating||Promotion||Website||Review|
|250+||0.4% (maker), 0.6% (taker)|
|$5 BTC bonus (USA only)||Visit Coinbase||Coinbase Review|
|222||0.16% (maker) and 0.26% (taker)|
|None available at this time||Visit Kraken||Kraken Review|
|None available at this time||Visit eToro|
eToro USA LLC; Investments are subject to market risk, including the possible loss of principal. Archived, "Virtual currencies are highly volatile. Your capital is at risk."
|None available at this time||Visit Binance.US||Binance.US Review|
Frequently Asked Questions
The easiest way to use Bybit in the US is through a free VPN app. VPN's such as Proton VPN and Express VPN provide private internet access by encrypting a user’s data traffic and re-routing their IP address to another location that is allowed by ByBit.
Yes, users can access Bybit using a VPN, like the Proton VPN or Express VPN. Simply download and install the client software and then connect to a destination supported by the Bybit exchange. After this, sign up, deposit, and start trading.
Bybit is legal, but not regulated by any financial authority. This is one of the reasons Bybit is banned in regions like the US. However, the platform upholds relevant anti-money laundering (AML) laws and requires new users to complete KYC process in order to unlock more trading limits.
Bybit does not report to the Internal Revenue Service (IRS) or any other tax agency. The cryptocurrency exchange is not operational in the US and therefore does not comply with the country’s financial laws.
There are several regions where Bybit is not operational. Some of these regions are the US, UK, Quebec, North Korea, and China.
Bybit is one of the top cryptocurrency exchanges in the industry. However, US investors have restrictions due to regulatory issues in the country. To navigate around this hurdle, US investors can easily use a VPN service provider like the Proton VPN app. This would hide the user’s location while using the selected cryptocurrency exchange.