Coinbase Alerts Users to CFTC Subpoena About Bybit

Coinbase told customers that it may have to share information about their exchange  accounts with the CFTC.

Nasdaq-listed Coinbase alerted users to a subpoena it received from the U.S. Commodities and Futures Trading Commission (CFTC) concerning crypto exchange Bybit.

Multiple users reported receiving an email from Coinbase informing them of the subpoena from the commodities regulatory seeking information related to their accounts and transaction activity.

Looks like if you sent or received tx from #bybit to #coinbase you received this email.
➡️ You are not in trouble
➡️ Take a deep breath, its going to be ok fam pic.twitter.com/4WNukFZtPh

— Tom Crown (@TomCrownCrypto) November 27, 2023

Unless a motion to quash the subpoena is filed, Coinbase said it would be forced to respond to the CFTC with information on those users’ exchange accounts. So far, it appears that the recipients of the email were customers that interacted with the Bybit exchange from their Coinbase accounts.

Bybit, an exchange headquartered in Dubai, does not legally offer its services to users based in the U.S., as per its terms and services that were last updated in October. Still, like many of its counterparts, the service can be accessed by U.S. users through the use of a Virtual Private Network (VPN).

It’s not uncommon for regulators to hold the crypto exchange in question responsible for failing to restrict the use of its platform from U.S. customers. Just last week, the CFTC imposed a $4.3 billion fine on Binance, with one of the allegations being it’s failure to “employ meaningful access controls” to restrict access for U.S. customers, and supposedly “actively concealing” their presence on the trading platform.

Around the same time that Coinbase customers received an email about the subpoena, Bybit announced a new growth milestone – 20 million registered users.

“Bybit attributes its rapid growth to its constant innovation in the crypto space, including introducing AI-powered trading bots, a sophisticated options market, and a thriving copy trading community,” said Bybit in a statement.