Coinbase Stops Margin Trading Due to Regulatory Issues


Coinbase discontinued its margin trading product due to regulatory issues.

Coinbase announced margin trading will be completely offline in December, when all existing margin positions have expired, in a blog post (Tuesday).

Starting November 25 at 2 p.m., customer will not be able to place new margin trades. Any open limit orders will be canceled at that time.

Coinbase relaunched its margin trading service this year after suspending its functionality in 2017. A flash crash in RTH prices caused the exchange to halt margins until last February, when it launched the service in 23 states.

In 2017, the Commodities Future Trading Commission (CFTC) sent an inquiry to Coinbase about its margin service after the flash crash. Now, concerns about the recently released CFTC guidance are prompting exchanges to close the service indefinitely, according to the blog post.

“We believe clear and reasonable regulations for margin loan products are necessary to protect and provide peace of mind to US customer, said the blog post. “We look forward to working with regulators to achieve this goal.”

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