Nearly one million U.S. users engaged with the apps of Bybit, Bitget, and OKX in August 2024, despite these platforms explicitly prohibiting U.S.-based trading due to regulatory restrictions.
That is according to data from a Sensor Tower report about regulatory compliance among certain sectors of the cryptocurrency industry.
Binance, which faced a $4.3 billion settlement with U.S. authorities last year, has invested in bolstering compliance. However, industry observers have called out the disparity in regulatory enforcement.
“Binance’s $4.3B lesson didn’t seem to sink in,” said ChrisTheDrummer, a cryptocurrency enthusiast on X, highlighting ongoing issues with other exchanges that appear to evade similar scrutiny.
Binance, the world’s largest crypto exchange by volume, has committed to company-wide regulatory compliance through Know Your Customer (KYC) and Anti-Money Laundering (AML) protocols, active collaboration with law enforcement, and investment in its compliance operations.
Bybit, Bitget, and OKX all have allegations against their companies of potential violations of U.S. regulations. Despite barring U.S.-based users from trading on their platforms, the exchanges reportedly had a combined 877,000 monthly active users (MAUs) in the United States in August, according to data from Sensor Tower.
While these users may have been engaging in permissible activities like checking prices, experts suggest some may be bypassing restrictions to trade using virtual private networks (VPNs) and fraudulent identification, reports CoinDesk.
The exchanges have implemented measures like IP geoblocking and Know Your Customer (KYC) verification to enforce region-based restrictions. However, evidence shared with CoinDesk reveals that users can circumvent these barriers by masking their IP addresses with VPNs and using fake, stolen, or rented credentials to pass some KYC checks. Critics argue these gaps in enforcement undermine claims of compliance and expose the platforms to significant regulatory risks.
Bybit, Bitget, and OKX are prominent cryptocurrency exchanges offering a range of trading services to a global user base.
Federal Newswire has previously reported that Feng Bo, a major investor in OKX and grandson-in-law of former Chinese leader Deng Xiaoping, has ties to Chinese Communist Party elites.
