Coinbase, the prominent crypto exchange has again found itself under the regulatory radar. The crypto exchange has disclosed a subpoena from the United States Commodity Futures Trading Commission (CFTC).
The subpoena was posted by users on X (formerly Twitter). It revealed that the CFTC is keen on extracting information related to the activities of the Bybit crypto exchange.
Coinbase users who were involved in Bybit transactions have been served a warning. The November 27 subpoena stated in its message that it could lead to the disclosure of user accounts and transaction details unless a court intervenes by November 30.
Bybit’s global manoeuvres
Bybit, based in Dubai, previously asserted in its terms of service that it doesn’t operate in the United States. However, speculation arises as users get accessibility through virtual private networks (VPNs). Despite these developments, Bybit boasted 20 million users the day after Coinbase’s communication.
The exchange positions itself as a “top-three cryptocurrency exchange.” It credits its success to risk management and enhanced Anti-Money Laundering (AML) compliance. Bybit holds licenses in the UAE, Kazakhstan, and Cyprus, signaling a commitment to regulatory compliance.
Bybit’s journey involved the implementation of Know Your Customer (KYC) verification back in July 2021. However the the exact timing remains unclear.
The exchange later shared KYC instructions for customers in September 2022. Notably, Bybit exited the UK market in October after Financial Conduct Authority rules introduces new rules. They also removed sanctioned Russian banks from their payments list in August 2022.
The CFTC has solidified its role as a “premier” enforcement agency for crypto. It had initiated 47 cases in the digital assets sector in fiscal year 2023. CFTC represents a whopping 49% of the filed cases. FTX, Celsius, Voyager Digital CEO Stephen Ehrlich, and Binance are notable among these are suits.
