Bybit Resumes Full Trading Services in India After FIU Registration
Key Takeaways:
Bybit has resumed trading services in India after resolving compliance issues by registering with the Financial Intelligence Unit (FIU) and paying a regulatory fine. Independent audits confirmed the exchange maintained sufficient reserves despite significant withdrawal pressure. Security investigations detailed how Lazarus Group hackers bypassed multi-signature protocols to access cold wallets. Rival exchanges are engaging regulators and recruiting local experts to facilitate their return to India. India’s regulatory approach is evolving through Securities Exchange Board oversight and potential CBDC development.Crypto exchange Bybit has officially resumed trading services in India after securing registration with the country’s Financial Intelligence Unit (FIU-IND).
The exchange announced on February 25 that it is restoring full access for existing users and gradually onboarding new customers.
This marks a definite regulatory milestone for Bybit, which had previously suspended its services in India due to compliance issues.
Bybit Finally Back in India After Paying Fines
The initial suspension came after Bybit was fined 9.27 crore rupees ($1.06 million) on January 31 for violating India’s Prevention of Money Laundering Act (PMLA).
The Indian government took action after discovering that Bybit had been expanding its services in the country without proper registration.
This led to regulatory penalties and the blocking of its website under the Information Technology Act.
After paying the fine and registering with the FIU, Bybit returned to India with a renewed commitment to compliance, aligning itself with India’s new cryptocurrency regulations.
The exchange, which operates across 1,174 markets and serves over 60 million users globally, seeks to regain its footing in India’s expanding crypto space.
Despite the country’s regulatory scrutiny, India remains a key market for major exchanges, with increasing adoption and trading volumes.
In fact, a recent report shows that the Indian crypto market could expand from $2.5 billion in 2024 to over $15 billion by 2035 at an annual growth rate of 18.5%.
A Comeback After Massive Security Breach
Bybit’s regulatory comeback in India follows a period of turbulence, including one of the largest security breaches in cryptocurrency history.
On February 21, 2025, the exchange was targeted by the notorious Lazarus Group, a North Korean-affiliated hacking collective.
The breach led to the theft of over $1.4 billion in Ethereum (ETH)-related tokens, marking the single largest crypto heist recorded to date.
Investigations revealed that the Lazarus Group exploited vulnerabilities in Bybit’s multi-signature security protocols to gain unauthorized access to an Ethereum cold wallet.
The group, known for orchestrating high-profile cyber heists—including attacks on Ronin and WazirX—once again demonstrated its ability to bypass centralized exchange security mechanisms.
The breach’s impact was immediate and severe. In the aftermath of the attack, Bybit experienced a major drop in user assets, with withdrawals exceeding $5.3 billion.
However, independent audits later confirmed that the exchange maintained more reserves than liabilities, reassuring users of its financial stability.
By February 22, Bybit CEO Ben Zhou announced that withdrawal activities had normalized.
Crypto Exchanges Race to Resume Operations in India
Other exchanges that were penalized for operating in India are now looking to regain a foothold in the country as well.
According to a February 13 report, Coinbase is exploring a return to the Indian market after more than a year away, engaging with local regulators, including the Financial Intelligence Unit (FIU).
While the exchange has not confirmed FIU registration, a spokesperson stressed Coinbase’s commitment to complying with India’s regulatory framework.
Coinbase initially launched in India in April 2022 but quickly faced regulatory pressure from the Reserve Bank of India (RBI). This led to the suspension of UPI payments and an eventual halt in trading services.
By June 2022, new user registrations had stopped, and in September 2023, Coinbase officially terminated accounts that failed to meet updated compliance standards.
Similarly, a February 20 report shows that Kraken is also planning a return to the Indian crypto market. It has appointed Vishesh Khurana, co-founder of Shiprocket, as an advisor to lead its local operations.
The exchange intends to secure the necessary licenses and engage with Indian regulators to comply with financial laws.
Despite high crypto taxes and regulatory challenges, India’s stance on digital assets may change soon. The Securities Exchange Board of India is proposing multi-regulatory oversight and even planning a national CBDC (Central Bank Digital Currency).
Bybit’s return to India showcases the evolving relationship between crypto exchanges and regulators worldwide. As India continues developing its digital asset framework, exchanges must adapt to changing requirements while balancing innovation and compliance.
The next few years may determine whether India becomes a crypto hub or settles into an overly cautious approach to digital assets, with exchanges like Bybit serving as test cases for this regulatory evolution.
Frequently Asked Questions (FAQs)
Bybit plans to maintain compliance through FIU registration, adherence to anti-money laundering measures, and collaboration with Indian regulators.
FIU registration enhances Bybit’s legitimacy in India, sets a compliance precedent, and strengthens its global operational credibility.
India’s evolving regulations, including FIU registration requirements and potential CBDC development, are encouraging exchanges to return despite high taxes and strict oversight.
Indian crypto exchanges are implementing strict Know Your Customer (KYC) and Anti-Money Laundering (AML) measures, transaction monitoring for suspicious activities, mandatory reporting under Section 285BAA of the Income Tax Act, and compliance with tax and regulatory frameworks to ensure transparency and legality.
Bybit’s $1.06 million fine is relatively small compared to Binance’s $85 million tax demand in India, for example, highlighting varying penalty scales based on the severity of compliance violations and transaction volumes.
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