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Coinbase Warns Customers of CFTC Subpoena in Investigation Involving Bybit

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Coinbase notifies customers of CFTC subpoena related to Bybit.

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Coinbase, a leading cryptocurrency exchange, is notifying its customers about a subpoena received from the United States Commodity Futures Trading Commission (CFTC). This subpoena, as reported by users on social media platforms, aims to obtain information about the cryptocurrency exchange Bybit.

Coinbase's communication suggests that the CFTC is intensifying its efforts to oversee the cryptocurrency market. Coinbase customers who also used Bybit's services appear to be the main focus of this subpoena. Coinbase said it will be able to provide data on user accounts and transaction activity to the CFTC unless the order is challenged and reversed in court by the end of November.

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Dubai-based Bybit has previously stated that it does not offer services in the United States. However, there are reports that the platform can be accessed in the USA through virtual private networks (VPNs). The exchange recently celebrated the milestone of reaching 20 million users and described itself as one of the “top three cryptocurrency exchanges”.

Bybit faces regulatory scrutiny despite bolstering compliance

In terms of regulatory compliance, Bybit has strived to improve its risk management and adherence to Anti-Money Laundering (AML) regulations. The company has obtained licenses in the United Arab Emirates, Kazakhstan and Cyprus. In July 2021, Bybit announced the implementation of the Know Your Customer (KYC) verification process, with detailed guidelines provided to its customers in September 2022.

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Furthermore, Bybit decided to leave the UK market in October in response to new regulations imposed by the country's Financial Conduct Authority. In August, the exchange also removed two sanctioned Russian banks from its payments list.

Coinbase Notifies Customers of Bybit-Related CFTC Subpoena

The CFTC, for its part, has positioned itself as the main regulatory agency in the cryptocurrency space. In fiscal year 2023, the agency brought 47 cases in the digital assets sector, representing 49% of the cases filed. Among these cases, lawsuits against big names such as FTX, Celsius, Stephen Ehrlich (CEO of Voyager Digital) and Binance.

This development is indicative of the increasing regulatory scrutiny in the cryptocurrency market, highlighting the need for transparency and compliance on the part of exchanges and their users.

Disclaimer: The views and opinions expressed by the author, or anyone mentioned in this article, are for informational purposes only and do not constitute financial, investment or other advice. Investing or trading cryptocurrencies carries a risk of financial loss.
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