The ongoing regulatory scrutiny of the US crypto landscape has taken a significant twist after Coinbase received a subpoena from the Commodity Futures Trading Commission. Surprisingly, the regulatory spotlight has fallen on Bybit, another prominent crypto exchange, over its product offerings to US residents.
Bybit Caught In-Between Coinbase And CFTC Debacle
According to a recently shared screenshot of an email from Coinbase on X by Tom Crown, the leading US crypto exchange has once again found itself in the crosshairs of the regulators. As revealed by Crown, the email was a recent subpoena issued by the Commodity Futures Trading Commission (CFTC) to Coinbase.
The CFTC seeks sensitive information (such as transaction history) from users who have linked their Coinbase accounts to Bybit. The subpoena has raised questions about the CFTC’s motivations for requesting the information.
Some community members believe the commission is gathering information to strengthen its case against Bybit, the Dubai-based crypto exchange. Coinbase users have received emails about the CFTC’s ongoing legal action against Bybit.
The email also states that the recipients are not required to act. However, unless served before November 30, 2023, Coinbase may respond to the subpoena with a motion to either quash or object to the allegations.
Why Is CFTC After Bybit?
The United States government agency is investigating Bybit to ascertain whether the exchange has offered services to US customers via the Coinbase platform. If user accounts reveal solid connections, the investigation could have far-reaching implications for the crypto exchange.
Bybit previously stated that it does not operate in the United States and has limited access in several other countries. However, users interested in the firm’s services have accessed the platform via VPNs.
VPNs can assist users in evading geo-restrictions and accessing content unavailable in their region. However, using VPNs to access restricted content or platforms is illegal in some countries, including China and Russia.
As a result, before using VPNs to access Bybit, users should be aware of the legal implications.
Coinbase Responds To CFTC’s Subpoena
Meanwhile, Coinbase has released an official statement regarding the subpoena, affirming that it adheres to the directives outlined in the CFTC’s subpoena in a communication to its user base. The exchange also signaled its intent to comply unless otherwise instructed by the government agency.
Despite its commitment to regulatory compliance, Coinbase has filed a motion to object to the subpoena within the timeframe specified. The commitment of Coinbase to regulatory obligations is critical in ensuring a secure and transparent trading platform for its users.
Furthermore, Coinbase’s focus on compliance highlights its proactive efforts to navigate the evolving crypto regulatory landscape while maintaining user security and fostering industry trust.