Bybit is under investigation for allegedly offering its exchange services in the US without a license
Coinbase is informing customers that it has been subpoenaed by the United States Commodity Futures Trading Commission (CFTC), according to X (formerly Twitter) users who posted a copy of the notice. The CFTC is pursuing information regarding the Bybit crypto exchange.
Recipients also assumed that Coinbase customers who also use Bybit obtained the message. The November 27 message says that Coinbase may supply details on user accounts and transaction activities to the CFTC unless the court drops the subpoena by November 30.
The Dubai-based Bybit crypto exchange noted in its terms of service earlier this year that it doesn’t provide service in the United States, which is supposedly accessible through a virtual private network (VPN).
I've been off Twitter watching some football. One of my friends sent me this email he received from Coinbase. I do not know how many people are subject to this, what the scope is, etc. However, it looks like Coinbase and ByBit do not mix well together! pic.twitter.com/L3qqDBp2TN
— Suitman (Clinically Insane) (@NotSuitman) November 28, 2023
The day after Coinbase’s message, Bybit reported that it had acquired 20 million users, describing itself as a “top-three cryptocurrency exchange.” The exchange’s statement says, “Prudent risk management and enhanced AML [Anti-Money Laundering] compliance have led Bybit to gain licenses in the UAE, Kazakhstan, and Cyprus.”
Bybit revealed it would be implementing Know Your Customer (KYC) verification for users in July 2021, although it’s unclear when that happened. Bybit provided KYC instructions to clients in September 2022.
In September, Bybit communicated it would exit the United Kingdom market in October when the new Financial Conduct Authority regulations came into effect. It withdrew two authorized Russian banks from its payments list in August.
The CFTC tagged itself the “premier” crypto enforcement agency regarding the number of cases in the fiscal year 2023. It activated 47 cases in the digital assets industry, defining 49% of the total cases filed. Included were the lawsuits against FTX, Voyager Digital CEO Stephen Ehrlich, Celsius and Binance.
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