Coinbase to discontinue margin trading services due to regulatory concerns
Coinbase is discontinuing its margin trading product due to regulatory concerns.
The exchange announced the product will be fully offline in December, when all existing margin positions have expired, in a blog post Tuesday.
As of November 25 at 2 p.m. PT, customers will be unable to place new margin trades. Any open limit orders will be cancelled at that time as well.
Coinbase relaunched its margin trading services this year after suspending the functionality in 2017. A flash crash in the price of RTH led the exchange to discontinue margin until this past February, when it rolled out the service in 23 states.
In 2017, the Commodities Future Trading Commission (CFTC) sent an inquiry to Coinbase about its margin service following the flash crash. Now, concerns about recently-released CFTC guidance are driving the exchange to shutter the services indefinitely, according to the blog post.
“We believe clear, common sense regulations for margin lending products are needed to protect and provide peace of mind to U.S customers,” said the blog post. “We look forward to working closely with regulators to achieve this goal.”
© 2020 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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Author: Aislinn Keely