An unconfirmed number of crypto exchange Coinbase recently received emails, informing them that data linked to their customer accounts may soon be shared with the CFTC.
The top exchange in America had recently been served with a subpoena, which might require it to share customer information with the Commodities Futures Trading Commission (CFTC).
The legal order
Even though Coinbase has not publicly commented on the subpoena so far and has not disclosed what data it is related to, the legal order seems to be connected to a matter concerning Bybit.
Ben Zhou founded the crypto exchange, which is based in Dubai, back in 2018. It was confirmed by a person familiar with the matter that Coinbase had sent the emails.
However, the exact information that the CFTC had demanded had not been disclosed and neither was it revealed as to how the data pertains to Bybit, or the number of customers that might be impacted.
In the letter that was sent to customers, the Coinbase exchange said that it might protest the subpoena, but they had a deadline until November 30th to do so.
But, a person familiar with the matter said that the crypto exchange was working with the CFTC for determining the data the federal agency requires.
However, reports dictated that the company was trying to limit the scope of the data to be shared as much as possible.
Users who had received the email from Coinbase took to X to question why they were in the crosshairs of the federal government.
Some users speculated that crypto holders of both Bybit and Coinbase were the subpoena’s target, as it could potentially be a part of a case against the Dubai-based exchange.
However, it soon came to light that multiple emails sent to Coinbase customers were issued to those who claimed that they had never interacted with the Bybit crypto exchange.
Lawsuits have been filed by the CFTC against crypto exchanges in the past for failure to comply with KYC (Know-Your-Customer) requirements.
It has also sued them for operating digital assets derivatives exchanges illegally and for providing unregistered futures trading.
The crypto exchange agreed to pay a fine of $1.35 billion for violating the specific guidelines of the CFTC.
According to Bybit’s website, the crypto exchange had only started complying with KYC requirements this year in May.
But, it is important to note that the CFTC has not filed any lawsuit against Bybit or Coinbase for that matter.
However, it could claim that American users were able to access the services and products of Bybit if it can connect the accounts of Coinbase users with those of Bybit users.
Other than the CFTC, Coinbase is also dealing with issues with the US Securities and Exchange Commission (SEC), which has filed a lawsuit against the crypto exchange.