San Francisco-based crypto exchange Coinbase is ending its margin trading services today due to new regulatory guidance by the Commodity Futures Trading Commission (CFTC).
Users will no longer be able to place new margin trades within the Coinbase platform, says the crypto exchange’s chief legal officer Paul Grewal in a blog post.
[adinserter block="1"]All existing positions will expire in December. Trading cryptocurrencies on margin allows users to magnify their trades by depositing only a fraction of the capital required.
They instead borrow additional funds from exchanges like Coinbase.
Under the recent CFTC guidance, US trading platforms like Coinbase are required to deliver digital assets like Bitcoin and Ethereum, and let their buyers take physical possession and control of a coin no later than 28 days after a trade was made, regardless of whether it was purchased with leverage or on margin.
In addition, the guidance also clarifies that the seller or the exchange will not retain any legal right or control over the digital asset bought on margin or leverage 28 days after the transaction.
Grewal highlights that Coinbase will continue to work with regulators in an effort to establish a clear regulatory framework for margin lending products.
[adinserter block="1"]Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any assets including cryptocurrencies, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
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