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- Coinbase could share customers’ on-chain information with the United States CFTC in regard to a court summon regarding the Bybit crypto exchange amid an ongoing regulatory crackdown geared towards taming the high inflation.
- Bybit crypto exchange has received several warnings from different jurisdictions in the past including the United States, Japan, and Canada for operating without proper registrations.
After crashing Binance Holdings’ operations in the United States, the Federal government has turned its focus on other centralized cryptocurrency exchanges led by Kraken, and Bybit. In the latest turn of events, the United States Commodity Futures Trading Commission (CFTC) has asked publicly traded Coinbase Global to share customers’ information related to transaction activity with Bybit accounts.
Notably, an unconfirmed number of Coinbase users have received an email from the exchange informing them of a subpoena from the CFTC. While Coinbase has not publicly commented on the issue as of this report, the regulatory claws are upon the fourth largest cryptocurrency exchange by trading volume, Bybit.
CFTC Subpoena to Coinbase In The Matter Of Bybit Fintech Ltd. and Ben Zhou. @coinbase & @Bybit_Official pic.twitter.com/uJWe1urBzi
— Ƀitcoin Chris (@CryptoChrisG) November 27, 2023
Bybit and Crypto Regulatory Crackdown
As a top-rated cryptocurrency exchange with over 10 million registered users offering over 270 spot assets, Bybit has found itself on the wrong side of several jurisdictions that are struggling to fight the high inflation emanating from the crazy speculation of digital assets. Notably, Bybit was founded after the 2017 crypto bubble and is headquartered in Dubai, United Arab Emirates, just like Binance and former CEO Changpeng Zhao. As a company registered in the British Virgin Islands by Ben Zhou, Bybit has found itself on the wrong side of the crypto regulatory crackdown in several jurisdictions.
For instance, as of 2021, Bybit was blocked from offering its crypto-related services in the United States. According to an updated term of service, Bybit does not offer its crypto-related services or products to users in the United States, the United Kingdom, mainland China, Singapore, Canada, North Korea, Cuba, Iran, Uzbekistan, Russian-controlled regions of Ukraine and, Syria. In a bid to ensure sustainable growth, Bybit has continued to update its terms of services to ensure total compliance including Know Your Customer (KYC).
With much conviction, the United States Department of Treasury is preparing a similar bombshell to the Binance, which may include hefty fines and possible jail terms. Moreover, there is a high chance the US CFTC will get information from Coinbase that will implicate Bybit to have matched US customers with traders from sanctioned countries. Nonetheless, Bybit top executives do not have any obligation as the United States does not have jurisdiction over foreigners, especially since there is no existing extradition treaty with the UAE.
Market Implication
The crypto market has continued to showcase its resilience despite the regulatory crackdown in the United States. For instance, Bitcoin price has gained about 3.2 percent in the past 24 hours to trade around $38,268 on Wednesday during the mid-London session.
Additionally, Ethereum (ETH) has led the altcoin market as it gained about 3 percent in the past 24 hours to trade at around $2,060. Consequently, the total crypto market capitalization has gained around 3.4 percent to about $1.51 trillion.
