The French government has initiated an investigation into cryptocurrency exchange Bybit for potential regulatory violations, despite the exchange's recent milestone of reaching 20 million global users. The Autorité des Marchés Financiers (AMF), France's financial regulatory authority, has warned retail investors about Bybit's unlawful status in the region due to its failure to register as a digital asset service provider (DASP).

Bybit has reiterated its commitment to adhering to local regulations and is currently in talks with the AMF to obtain the necessary license. However, the AMF has threatened legal action to prohibit Bybit's access in France due to its unregistered status, which makes its activities unlawful under French law.

The AMF aims to protect investors and preserve public order by enforcing strict regulations, including safeguarding individual investors, assessing corporate executives' abilities and honesty, and preventing terrorism and money laundering financing. The regulatory authority advises investors using Bybit to be prepared for unexpected service interruptions and recommends checking its official website for a whitelist of registered DASPs before investing in cryptocurrencies.

This investigation marks the latest development in Bybit's ongoing struggles with French regulations, which began with a blacklist action two years ago. The exchange's prior plan to leave the French market in October 2023 has been put on hold as it works to comply with regulatory requirements.