Illustration shows a representation of the cryptocurrency and Coinbase logo
Reuters

KEY POINTS

  • Coinbase told its customers it has received a subpoena from the Commodity Futures Trading Commission
  • The platform warned it may have to share user account information with the CFTC
  • The news comes on heels of the historic settlement agreement between Binance and some agencies of the U.S. government

Coinbase, one of the world's largest centralized crypto exchange platforms by trading volume, informed some of its customers Monday that it has received a subpoena from the Commodity Futures Trading Commission (CFTC) in a matter concerning Bybit and its CEO Ben Zhou.

It means Bybit, a crypto exchange founded in 2018, and Zhou could be in the crosshairs of the CFTC.

While Coinbase has not made any public announcement regarding the matter, some of its users shared on social media screenshots of an email they received from the company alerting them about the CFTC subpoena, seeking information related to users' Bybit accounts and transaction activities.

The platform warned customers it may respond to the regulator's subpoena unless it is reversed by a court by Thursday.

"No action is required from you, but Coinbase may respond to the Subpoena unless served before November 30, 2023, with a motion to quash or other objection to the subpoena that has been filed with the Court - including by sending information concerning your Coinbase account to the Commodity Futures Trading Commission," the email read.

Bybit, the Dubai-based crypto exchange, says in its terms of service that it does not provide service in the U.S. but customers can still access the platform using a virtual private network (VPN).

The CFTC has not yet commented on the matter but speculations are rife that the regulator may be targeting Coinbase users who have also used Bybit. It suggests that the agency is gearing up for legal action against the Dubai-based crypto exchange.

Despite being in the industry since 2018, Bybit introduced the mandatory know-your-customer (KYC) checks only this May.

It stopped offering U.S. dollar transfers this year after the spectacular collapse of Silvergate Bank. It has been under regulatory scrutiny in Japan and the U.K.

The latest CFTC subpoena seemingly suggests that the Dubai-based exchange may encounter regulatory issues in the U.S.

The subpoena comes on the heels of the historic settlement agreement between Binance, the world's largest crypto exchange platform by trading volume, and the U.S. Department of Justice and other financial agencies.

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