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Coinbase Pro To Disable Margin Trading From December Citing CFTC Guidence

Jordan Lyanchev Nov 25, 2020 11:58
The US-based cryptocurrency exchange Coinbase Pro will suspend margin trading entirely starting from December to comply with CFTC guidance.
  • The Coinbase Chief Legal Officer Paul Grewal published post earlier informing customers that the popular exchange will seize offering margin trading.
  • Clients will not be able to place margin trading orders starting from 2 p.m. PT on November 25th, 2020. At the same time, the platform will cancel all open limit orders.
  • The San Francisco-based exchange will disable the margin trading feature fully at the end of November, “once all existing margin positions have expired.”
  • According to the statement, the decision aims to comply with guidance introduced by the US Commodity Futures Trading Commission (CFTC) earlier this year.
  • Back in March 2020, the federal commodities regulator published a 35-page document with its views on how it will regard “actual delivery” of cryptocurrency assets. The guidance provides rules on when a customer has legally taken control of a digital asset, including acquisition through a margin or leveraged product. The document reads:
  • · (1) a customer securing: (i) possession and control of the entire quantity of the commodity, whether it was purchased on margin, or using leverage, or any other financing arrangement, and (ii) the ability to use the entire quantity of the commodity freely in commerce (away from any particular execution venue) no later than 28 days from the date of the transaction and at all times thereafter; and

  • · (2) the offeror and counterparty seller (including any of their respective affiliates or other persons acting in concert with the offeror or counterparty seller on a similar basis) do not retain any interest in, legal right, or control over any of the commodity purchased on margin, leverage, or other financing arrangements at the expiration of 28 days from the date of the transaction.

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Jordan Lyanchev

Jordan got into crypto in 2016 by trading and investing. He began writing about blockchain technology in 2017 and now serves as CryptoPotato's Assistant Editor-in-Chief. He has managed numerous crypto-related projects and is passionate about all things blockchain. Contact Jordan: LinkedIn