- Coinbase Pro set to stop margin trading on its platform
- Firm reiterates commitment towards providing the best services for their customers
According to a post published by the Chief Legal Officer of Coinbase, margin trading will be discontinued on it’s Coinbase Pro platform. The Commodity Futures Trading Commission (CFTC) revised regulatory guidance is the reason for this.
Coinbase Pro’s Trading Service
Margin trading is a service Coinbase renders that helps traders by borrowing them funds for investment. This helps them to earn more without having much funds.
The exchange stated that margin trading will no longer be facilitated on its Coinbase Pro platform. The service ceases operation on the 25th of November, 5 pm ET.
The publication stated that after all the margin positions that are currently running expire, the service will be discontinued.
Paul Grewal posited on his post that it is believed in Coinbase that the regulations imposed on the margin services were important. They give ease to the customer base. They are working hand in hand with the regulators to give their customers the best trading experience.
Coinbase Pro seeks to adhere to regulators
Coinbase Pro is an alleviation tool that helps its new users. It helps them grasp how it works and the dangers that come with trading on the Coinbase Pro platform.
With margin trading, users borrow from Coinbase some funds, who in turn trades with the funds, generating much more funds than they had before.
The new regulation from CFTC will necessitate Coinbase to register with CFTC’s regulator, if they want to continue with their margin trading services.
However, Kraken, another exchange that provides similar trading services, and some other top exchanges are yet to make any publication concerning this development.
The guidance is concerned about delivery in its actuality, and has made some suggestions. They stayed that a platform or any entity associated with it should have no kind of control on an asset after the user receives it.
CFTC had once made an inquiry from Coinbase three years ago when the exchange had a crash. It’s margin trading services had only restarted early 2020. It is being shut down again before the year runs out and it could take a few years before these services can be run once more on its Coinbase Pro platform.
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