November 28, 2023 9:53 am Comments

The Commodity and Futures Trading Commission has sent a subpoena to Coinbase demanding user data.

According to sources, Coinbase users received an email from the exchange informing them of the subpoena and the potential handing over of user data demanded by the government regulator.

This subpoena is part of the CFTC’s ongoing ‘investigation’ into ByBit. ByBit is not an American company and the CFTC cannot extract the information it seeks from ByBit.

Instead of simply relenting, the CFTC has chosen instead to circumvent this issue by demanding that Coinbase hand over user data.

While I am no legal expert, this seems illegal and may not even come to fruition once the subpoena and the request are legally challenged.

Crypto Analyst Marty explained:

“Update on Bybit situation: Appears all Bybit users have received an email re: The CFTC case against Bybit

“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”.

IMO: Dont do anything. Giving your information might be used against you. No judge will rule this legal.

CFTC is seeking information on subscriber behaviour, generally to prove something about Bybit.

Because Bybit is a non US company, they are going to coinbase to get your information. If Brian Armstrong agreed to this its a travesty and he should be held accountable. Your information is private.

Remember it’s completely up to you to file a motion to quash in the next couple of days. If you don’t, your information may be turned over to CFTC.

Im no lawyer but this seems very anti-constitutional, not in the CFTC jurisdiction, and out of their congressional authority. Sen Lummis, Rep. Matt Gaetz, Patrick McHenry is this legal?

How can a regulator, unauthorized to regulate these assets, or even these virtual asset products request information from another companies customers?”

Protos provided some background context on the ongoing ByBit investigation:

Dubai-based Bybit was founded by Chinese entrepreneur Ben Zhou in 2018. However, it only introduced mandatory know-your-customer (KYC) checks in May this year.

Following the collapse of Silvergate Bank, Bybit halted US dollar transfers. It has recently fallen under regulatory scrutiny in the UK and Japan, with the finance watchdogs of both countries issuing severe warnings and demanding compliance.

One user asked: “CFTC demands Coinbase user data in an apparent Bybit probe. Is Bybit going to be targeted next now that Binance is sorted?”

Bein Crypto reports:

Concerned users have also taken to Reddit to get more information, many claiming not to have used Dubai-based Bybit in several years. One respondent explained:

“CFTC is seeking information on subscriber behavior, generally to prove something about Bybit. It’s completely up to you to file a motion to quash in the next couple of days. If you don’t, your information will be turned over to CFTC.”

Join the conversation!

We have no tolerance for comments containing violence, racism, profanity, vulgarity, doxing, or discourteous behavior. If a comment is spam, instead of replying to it please click the icon below and to the right of that comment. Thank you for partnering with us to maintain fruitful conversation.