Citadel Securities-backed prime brokerage firm Hidden Road has stopped offering clients access to third-largest crypto exchange Bybit, as per sources familiar with the matter. The move sparked disputes between the two regarding know-your-customer and anti-money laundering requirements of Bybit.
Bybit Users Face Major Blow in Dispute With Hidden Road
Hidden Road informed clients about the decision to prevent access to Bybit a few weeks ago, as per a report by Bloomberg. The exact disagreement between the two companies over Bybit’s know-your-customer and anti-money laundering requirements remains unclear.
Bybit has started a “comprehensive compliance review” of its prime brokerage business. Regulators have tightened scrutiny over crypto exchanges after Binance and CZ agreement with the US DOJ over violations of anti-money laundering and sactions laws. After Binance’s historic $4.3 billion settlement with US authorities last year, the crypto exchange asked prime brokers including Hidden Road and FalconX to run more stringent checks, keeping US investors off the crypto exchange.
“Bybit will not comment on specific inquiries related to counterparties at this time. However, the company is committed to transparency and will provide further updates as the review progresses,” a Bybit spokesperson said in a statement.
While the issue at discussion only impacted some users, it has caused dissatisfaction among clients as users preferred to access crypto with trusted companies or brokers.
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Bybit’s Market Share Rise Amid Binance’s Struggles
US regulators including the SEC accused Binance of allowing US-based customers to trade on the international exchange through offshore entities, without implementing necessary controls required by US law.
Since lawsuits and investigations against Binance, Binance.US, and CZ, other crypto exchanges saw their market share rise. OKX and Bybit saw a massive rise in crypto trading, with an increase in demand in this bull market. Crypto companies and exchanges even moved offshore amid stringent regulation in the United States.
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Read More: Citadel-Backed Hidden Road Stops Users To Access Crypto Exchange Bybit
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