Coinbase Warns It Would Share Bitcoin Trading Data With CFTC
US leading crypto exchange Coinbase informed its customers with an email notifying them that it would share details of the customer accounts with the Commodities Futures Trading Commission (CFTC).
The email by Coinbase coincides with the period it was served with the subpoena relating to the crypto exchange Bybit. However, Coinbase customers with no ties to the exchange admitted they are also targeted.
Coinbase Warns It Would Furnish CFTC With Transactions Data
The matter features several Coinbase users receiving emails from the leading American leading crypto exchange. It informed them that the details linked to the client’s accounts would be shared with CFTC following the subpoena about the crypto exchange Bybit.
Coinbase has, in the past, declined to issue public comment regarding the subpoena. The non-disclosure of exact data relating to the order appears linked to the Dubai-based crypto exchange Bybit, established by Ben Zhou in 2018.
An individual privity to the issue indicated that Brian Armstrong-led Coinbase indeed informed customers in an announcement that it might furnish CTC with the transaction history. Nonetheless, the San Francisco-headquartered crypto exchange was mandated by CFTC to disclose information relating to Bybit. Also, the crypto exchange hardly indicated the customers affected by the subpoena.
The letter drafted to the affected clients informed them that Coinbase may protest the subpoena in court before the November 30 deadline.
The individual familiar with the details indicated that Coinbase was cooperating with the CFTC to ascertain the date the crypto exchange would grant the federal agency. The individual added that the California-based crypto exchange was working towards limiting the scope of details it would share.
Will Coinbase Users’ Data Help Build Case Against Bybit
Coinbase users who admitted receiving the notice wondered about reasons for being on the government’s radar. Several users speculated that being in the government’s crosshairs arose from using Coinbase and Bybit. Also, they explained that the subpoena comprised part of the ongoing case against Bybit.
Most recipients of the subpoena notice emails distanced themselves from ever using Bybit and creating accounts with the platform. The CFTC has yet to clarify the matter.
The CFTC has previously leveled charges against several crypto exchanges, alleging they failed to institute proper know-your-customer (KYC) requirements. Other charges include running illegal digital asset derivative exchanges and unregistered futures offerings.
The notice to Coinbase customers comes a week after Binance entered a $4.3 billion settlement in a press conference involving several agencies. The deal involved Binance founder Changpeng Zhao resigning and agreeing to pay a $50 million fine. The Justice Department revealed that the exchange will pay a $1.35 billion fine, alleging it contravened the CFTC guidelines.
The involvement of Bybit in the subpoena likely relates to the awareness that it only introduced mandatory KYC standards in its services in May 2023. Linking US Coinbase users to the Bybit accounts will probably help authorities build a case against Bybit.
The regulator could prove that US users accessed Bybit products and services when it overlooked mandatory key identification standards. The CFTC is yet to file any charges against crypto exchange Bybit.
Coinbase Stock Rallies to Regain May 2022 High
Meanwhile, Coinbase stock gained bullish steam to rally to $128.46. The surge leaves the share regaining the May 2022 levels. The uptrend saw Coinbase share surpass the previous high levels witnessed in July following Ripple’s XRP win against the Securities and Exchange Commission (SEC).
Investors thought Coinbase could pull a similar victory in the lawsuit initiated by the SEC in June this year. While the optimism subsided, Coinbase is riding on the widespread optimism of the SEC approving a dozen bids for spot Bitcoin exchange-traded funds (ETFs). Besides, Coinbase accounts for substantial Bitcoin trading.
The San Francisco-based crypto exchange has recently received a confidence vote from institutions seeking the Bitcoin ETF approval to offer surveillance-sharing services. The move by Cboe’s BZX Exchange, Fidelity, BlackRock, Wisdom Tree, and Invesco portrays trust in Coinbase’s business model to execute the surveillance-sharing agreement. With the looming approval of Bitcoin ETF approval, it becomes inevitable for Coinbase Stock not to surge.
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