- Citadel Securities-backed prime brokerage Hidden Road has prevented users from accessing the crypto exchange Bybit, putting users in a dilemma.
- Bybit has initiated a comprehensive compliance review of its prime brokerage business.
- Bybit is gaining market share amid Binance’s regulatory troubles.
Discover the latest developments in the crypto world as Hidden Road restricts access to Bybit, sparking compliance reviews and market shifts.
Bybit Users Face Major Blow in Dispute With Hidden Road
Citadel Securities-backed prime brokerage firm Hidden Road has stopped offering clients access to the third-largest crypto exchange Bybit, according to sources familiar with the matter. The move has sparked disputes between the two companies regarding Bybit’s know-your-customer (KYC) and anti-money laundering (AML) requirements. Hidden Road informed clients about the decision a few weeks ago, as reported by Bloomberg. The exact nature of the disagreement remains unclear, but it has left many users in a difficult position, seeking alternative ways to access the crypto market.
Bybit’s Compliance Review
In response to the situation, Bybit has started a comprehensive compliance review of its prime brokerage business. This move comes amid increased regulatory scrutiny over crypto exchanges, especially following Binance’s $4.3 billion settlement with U.S. authorities last year over AML and sanctions law violations. Bybit has asked prime brokers, including Hidden Road and FalconX, to implement more stringent checks to keep U.S. investors off the platform. A Bybit spokesperson stated, “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.”
Bybit’s Market Share Rise Amid Binance’s Struggles
U.S. regulators, including the SEC, have accused Binance of allowing U.S.-based customers to trade on the international exchange through offshore entities without implementing necessary controls required by U.S. law. Since the lawsuits and investigations against Binance, Binance.US, and its CEO CZ, other crypto exchanges have seen their market share rise. OKX and Bybit have experienced significant increases in crypto trading volumes, driven by growing demand in the current bull market. Many crypto companies and exchanges are moving offshore to avoid stringent U.S. regulations.
Conclusion
The ongoing dispute between Hidden Road and Bybit highlights the increasing regulatory pressures faced by crypto exchanges. Bybit’s compliance review and market share gains amid Binance’s struggles underscore the dynamic nature of the crypto market. As regulatory scrutiny intensifies, exchanges must adapt to maintain user trust and market position. The outcome of Bybit’s compliance review will be closely watched by industry stakeholders, as it may set a precedent for future regulatory actions and market shifts.
