Coinbase May be Compelled to Disclose Bitcoin Trading Information to CFTC
Recently, the firm received a subpoena relating to Bybit, a crypto exchange. However, Coinbase clients with no links to the exchange claim they are also a target.
On the final day, Coinbase, the United States’ top crypto exchange, sent emails to an unsubstantiated number of users. They have been alerted that data associated with their client accounts may soon be disclosed to the Commodities Futures Trading Commission (CFTC). This comes after Coinbase received a summon.
Coinbase Set to Share Customer Details with CFTC
Coinbase has refused to publicly talk about the subpoena or its precise data. However, the legal order seems to be linked to an issue regarding Bybit, another crypto exchange. The Dubai-founded firm was established by Ben Zhou in 2018.
An individual conversant with the matter said that Coinbase sent emails to clients. However, they failed to explain the exact data requested by the CFTC and how it is linked to Bybit. Besides, they did not reveal the number of clients to be affected by the subpoena.
According to the letter, Coinbase will likely protest the subpoena in court prior to a November 30 deadline. Nevertheless, someone conversant with the matter revealed that Coinbase is partnering with the Commodities Futures Trading Commission to establish what information might be provided to the agency. However, the firm allegedly seeks to restrict the scope of the shared information.
On Twitter, those who receivedthe notice asked why the federal government targeted them. Some believed that only crypto holders who utilized both Bybit and Coinbase were the government’s target, possibly as part of a developing case against Bybit.
US Tightens Crypto Regulations
According to a media outlet, several subpoena notice emails by the firm were issued to clients who claim they have never utilized Bybit or created accounts. Coinbase and the Commodities Futures Trading Commission failed to respond when questioned about the clients.
In the past, the Commodities Futures Trading Commission has sued crypto exchanges for not instituting know-your-customer (KYC) requirements, providing futures trading without registration, and running illegal digital assets derivatives exchanges.
Last week, Binance agreed to pay a fine of $1.35B for contravening CFTC guidelines. This is part of the firm’s momentous settlement with several United States government agencies, which include the Department of Justice (DOJ).
In May, Bybit made know-your-customer standards mandatory in all its services. Linking U.S. Coinbase users’ accounts to Bybit accounts might be one means for the Commodities Futures Trading Commission to demonstrate US users’ ability to access Bybit’s products and services without divulging critical identifying data. However, a lawsuit against the exchange is yet to be filed.
