After the launch of margin trading on Coinbase Pro a few months ago, the company suspended leveraged margin trading.
But it works both ways – margin trading allows you to multiply your gains and losses.
Starting today, Nov 25, at 2 PM PDT, users will not be able to place new trades on margin.
Margin trading will be permanently suspended, and current margin positions will expire in the coming days and weeks, once these positions expire.
The company follows the CFTC guidelines, and interestingly enough, the CFTC was well aware of the company’s plans to launch margin trading.
Coinbase says it is in regular talks with CFTC and gives them information on upcoming products and services, as the same thing has also happened with margin trading.
Since margin trading was not available on the main Coinbase website, it was restricted to some Coinbase Pro users with a cap on the number of users that could access the feature.
However, Coinbase wouldn’t have launched margin trading if the company expected to change course on the regulatory front.
More than 100,000 users signed up for the queue, indicating some interest from Coinbase’s user base.
But the company has no choice but to end margin trading as it tries to be as compatible as possible with the current regulations. Let’s see if other exchanges in the US will follow the same path.