Coinbase Pro, a US exchange for professional cryptocurrency trading, no longer offers margin trading.
Citing the guidelines of the Commodity Futures Trading Commission (CFTC), the exchange announced that no new margin trades will take place from 5:00 p.m. on November 25th. She added that the product will go offline in December once all existing margin positions have expired. “”
“We believe that there is a need for clear, sensible regulations governing margin lending products to keep US customers safe and secure,” said Paul Grewal, chief legal officer wrote in a short blog post today. “We look forward to working closely with regulators to achieve this goal.”
Margin trading is when an investor borrows funds from a third party, in this case Coinbase, to do business for more than they actually own.
Coinbase Pro previously required that investors interested in margin trading be involved so that they understand the basic concepts and risks. Apparently, it is concerned that staying away from regulators is no longer satisfactory.