Due to new regulatory guidelines, Bitcoin (BTC-USD) exchange Kraken has announced that it would discontinue margin trading for some US citizens beginning June 23.
Margin trading will continue to be offered to US investors who match specific criteria, according to a Kraken article. Clients in the United States who do not fulfill the standards will be able to decrease, closeout, or settle their current margin positions but will not be permitted to create new margin positions.
Kraken launched its bitcoin trading app in the United States this week, placing it in direct rivalry with Coinbase (NASDAQ:COIN).
What are the requirements?
Individual customers — You must have more than $10 million in assets invested in discretionary funds. In general, this refers to assets (such as cryptocurrency, stocks, bonds, mutual funds, real estate investments, and cash retained for investment reasons) in which you make the decision to trade or invest, as opposed to assets in which someone else trades or invests on your behalf. Your own house and other assets that are not part of your trading or investing portfolio are not included in the $10 million in assets.
In light of regulatory guidance, Kraken will phase out the availability of margin trading for certain Kraken clients who are residents of the U.S. from June 23, 2021 onwards.
Margin trading will remain available to U.S. clients that meet specific requirements. For U.S. clients that don’t meet these requirements, margin trading will be phased out starting June 23, 2021.
From June 23, 2021 onwards, U.S. clients that don’t meet the below requirements will only be able to reduce, close out or settle their existing margin positions, but will not be able to open new margin positions. These clients’ existing margin positions will continue to be subject to the 28-day margin obligation term limit.