Right a few months later launch margin trading on Coinbase Pro, the company is disable the feature. Margin trading allows you to trade with leverage. But it works both ways – margin trading allows you to multiply your earnings and and your losses.
As of November 25, 2 pm PT time, users will not be able to place new margin trades. Existing margin positions will expire in the coming days and weeks. Once these positions expire, margin trading will be disabled forever.
The company follows the lead from the Commodity Futures Trading Commission. Interestingly, the CFTC was well aware of the company’s plans to launch margin trading.
Coinbase says he has regular conversations with the CFTC and gives him a head start on upcoming products and services. The same thing happens with margin trading.
Margin trading was not available on the main Coinbase site. It has been limited to some Coinbase Pro users with a limit on the number of users who can access the feature.
However, Coinbase would not have launched margin trading if the company could have anticipated a course change on the regulatory front. More than 100,000 users have signed up to the waiting list, indicating some interest from Coinbase’s user base.
But the company has no choice but to end the margin trade because it tries to be as compliant as possible with the current regulation. Let’s see if other exchanges operating in the US will follow suit.