- The CFTC is investigating Bybit for “possible” KYC violations.
- As part of its investigation, the CFTC has subpoenaed Coinbase for customer data.
- Coinbase is likely to challenge the subpoena in court, but it may be forced to hand over some customer data.
- This is the latest sign of the CFTC’s focus on regulating the cryptocurrency industry.
- Coinbase’s customers are expressing confusion and dissatisfaction about the subpoena.
There is some disturbing news on the internet today, and it concerns your privacy.
Coinbase, currently the largest crypto exchange in the United States, has just sent emails to its customers.
In this email, the crypto exchange announced that it might be forced to hand over trading and personal information about its customers, to the Commodities Futures Trading Commission (CFTC).
According to this report, the crypto exchange was hit with a subpoena. One that is supposedly linked to an ongoing probe into Dubai-based Bybit.
Here are some of the details:
Some Background Info: Why Is The CFTC Interested in Bybit?
The CFTC has been going after crypto exchanges that fail to compel their customers to complete know-your-customer ( or KYC) requirements.
The enforcement agency also goes after exchanges and lenders who offer illegal derivatives, offering futures trading to customers without proper registration.
Quite recently, the CFTC launched a probe into ByBit and appears to be on to something.
Interestingly enough, it has not charged the crypto exchange with anything yet. However, it seems very interested in its activities and customers.
Bybit only started to demand KYC verification from its customers in May 2021. Lone before that, literally anyone could access its products and services without identifying themselves.
In essence, the CFTC likely suspects that some customers used the exchange to trade banned crypto derivatives. The CFTC is now trying to track these illegal transactions using the largest centralized crypto database in the US:
Also known as Coinbase.
Coinbase Gets Caught In The Crossfire
As we have established before, Coinbase is not directly involved in the Bybit investigation.
However, this hasn’t stopped the CFTC from dragging the crypto exchange into things.
So far, Coinbase has not disclosed the exact kind of data the CFTC is demanding of it, or how many customers may be affected.
However, a lot of personal information is bound to be involved.
Coinbase is likely to attempt to limit the kinds of data that is shared with the CFTC, as well as the number of affected customers.
According to the emails sent to its customers, the crypto exchange also explains that it might challenge the subpoena in court “unless served before a November 30 deadline”.
“We want to assure you that we take the privacy and security of your account information very seriously and that we will vigorously defend your rights in this matter.”
Crypto and Coinbase users have taken to Twitter so far, and have expressed confusion and dissatisfaction.
However, some Coinbase users are not satisfied with this response.
On Twitter, several users who received the email expressed their frustration and confusion about why they were targeted by the CFTC.
Some users have speculated that only crypto holders who have used both Coinbase and Bybit in the past will be affected by the subpoena.
In contrast, others who received the emails claimed that they never used or even created an account with ByBit.
Overall, this subpoena from the CTFC is another sign of the incoming crackdown on crypto as 2023 comes to an end, and the crypto community prepares to usher in a new bull market come 2024.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.