After a few months of offering margin trading for users, Coinbase Pro will end its feature on the platform, starting tomorrow November 25. Chief Legal Officer Paul Grewal also stated in Coinbase blog, that no new use cases for trading on a margin will be allowed from the time of the policy change and the firm will completely suspend the feature in December, “once all existing margin positions have expired.”
“We believe clear, common sense regulations for margin lending products are needed to protect and provide peace of mind to U.S customers...We look forward to working closely with regulators to achieve this goal.”
This move is in response to new guidance from the Commodity Futures Trading Commission. In March the Committee explained its stance on the actual supply of money, including the use of leverage or other methods for cryptography purchased. The Guidelines of the CFTC specified that a physical delivery deadline of 28 days would allow the purchasers to use any digital assets they have acquired after that time. In conventional markets, investors place their bets on the potential price action of an underlying asset. If a trader settles their futures, they would end up getting the underlying commodity that is delivered physically to them. The CFTC guidelines explain, however, that digital assets do not have any leverage over crypto margin trading, as the case of Coinbase. The announcement followed Coinbase’s statement of new 1099-MISC forms for tax reports.