Broker suspends clients from using Bybit, Bybit withdraws Hong Kong application! Bloomberg: Hidden Road temporarily suspends cooperation based on KYC and anti-money laundering factors

According to Bloomberg, Hidden Road, a major brokerage supported by Citadel Securities, has temporarily suspended clients from using the cryptocurrency trading platform Bybit. This decision comes amid concerns regarding Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements.

Bybit Faces Money Laundering Controversy?

According to Bloomberg, Hidden Road has decided to stop its clients from using Bybit mainly due to disagreements on KYC and AML requirements. These regulations are crucial for preventing illicit activities such as money laundering and ensuring compliant operations of the exchange. An anonymous source cited by Bloomberg noted that these compliance issues have sparked significant disagreements between the two parties.

Bybit's Response and Compliance Review

In response to these developments, the Dubai-based exchange Bybit has initiated a comprehensive compliance review of its major brokerage business. According to Bloomberg, this review aims to ensure adherence to relevant regulations and improve the onboarding process for customers through brokers. However, Bybit has not provided specific comments on its transactions with Hidden Road.

Hidden Road Seeks Funding to Address Legal Concerns?

Hidden Road is reportedly seeking a $120 million Series B equity financing. The purpose of this funding round is to expand the company's primary brokerage services, including forex and digital asset markets.

Bybit Withdraws Compliance Application with SFC

On 5/31, the Securities and Futures Commission of Hong Kong included Bybit's application in the list ofapplicants whose license applications have been withdrawn, rejected, or refused, indicating that Bybit has withdrawn its application for a Hong Kong license, similar to OKX. According to industry sources, the reason why multiple offshore exchanges are giving up Hong Kong licenses is due to Hong Kong's requirement to clear out users from mainland China.

Carnival officially closes! SFC Hong Kong: Will begin to hold unregistered exchanges accountable, licensed or not guaranteed