Coinbase tells some customers it received subpoena related to Bybit

Quick Take

Coinbase let some customers know about a subpoena from a U.S. regulator involving Bybit, according to social media posts.
A person familiar with the matter confirmed the authenticity of the emails.

Coinbase has alerted some users about a subpoena it received from a U.S. regulator involving crypto exchange Bybit, according to emails sent out by the exchange that were posted on social media.

A person familiar with the matter confirmed the authenticity of the emails in a message sent to The Block.

"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.

The CFTC did not respond to a request for comment, and Bybit declined to comment. Bybit, with CEO Ben Zhou at the helm, is headquartered in Dubai.

Regulator scrutiny

The CFTC has certain powers to conduct investigations, including through voluntary statements and subpoenas, according to its enforcement manual. Laws also require Coinbase to collect information, including matters involving subpoenas, the exchange said in a post in May.

"We may access, read, preserve, and disclose information when we believe it is reasonably necessary to comply with law, legal obligations, regulations, law enforcement, governmental, and other legal requests, court orders, or for disclosure to tax authorities," Coinbase said.

Other federal agencies have sought subpoenas on crypto-related issues. Payments giant PayPal said earlier this month that it received a subpoena from the Securities and Exchange Commission relating to the PayPay USD stablecoin.

Coinbase itself has faced regulatory scrutiny from the Securities and Exchange Commission after it was sued in June for allegedly operating illegally as an exchange, broker and clearing agency. Shortly before, the SEC sued Binance on similar charges, but also included allegations that the exchange lied to customers and misdirected capital to separate investment funds owned by former CEO Changpeng Zhao.

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