invezz.com
US-based crypto exchange Kraken is making changes to its margin trading program. The exchange unveiled this news through a blog post on June 9, noting that it plans to stop margin trading for US clients that fail to meet its new KYC requirements before June 23. Reportedly, these changes will also need non-US clients that are in the Starter tier to verify their personal information to enter the Intermediate tier. Otherwise, the exchange will prevent them from trading.
According to the blog post, these changes will not affect non-US clients that are at the Intermediate and Pro levels. Kraken explained that these changes are inspired by regulatory guidance on leveraged digital asset transactions. Kraken said it would email all US clients and Starter tier clients that engage in margin trading about these new restrictions to avoid any inconveniences.
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For US Starter tier clients that fail to meet the new requirements by June 23, Kraken will only let them reduce their existing margin position exposure. Any open or unsettled positions by the given deadline will expire 28 days from the time they were opened. Starter tier clients who currently lack any open positions and do not wish to participate in margin trading do not need to take any action.
Striving to protect market participants
Per Kraken, these changes align with its mission to expedite crypto adoption so that everyone across the globe can get financial freedom and inclusion. To achieve this, the exchange believes it must introduce common-sense regulations that shield market participants while allowing them to freely purchase, sell, hold, and use digital currencies. The exchange went on to note that despite these changes, it still advocates for financial freedom.
This news comes as financial watchdogs across the globe continue tightening clampdowns on crypto. Apart from China, which not only banned crypto trading but now Bitcoin (BTC) mining, the US is proactively trying to find ways to regulate the burgeoning asset class. Reportedly, Biden’s administration is currently working on approaches to rein in the crypto space.
South Korea also announced that it was mulling an outright ban on crypto exchanges to prevent its citizens from the speculative nature of cryptocurrencies. While the country revised this approach, its financial watchdog now needs crypto exchanges to partner with banks to open real-name accounts for their users. This has proved to be a tough requirement for the country’s crypto exchanges, seeing as banks fear they might be held liable for crypto-related money laundering.