US-based cryptocurrency exchange Kraken is making changes to its margin trading program. The exchange broke this news through a blog post on June 9, noting that it plans to stop margin trading for US clients who do not meet its new KYC requirements by June 23. . These changes will reportedly also need entry-level non-US customers to verify their personal information for entry to the intermediate level. Otherwise, the exchange will prevent them from being traded.
According to the blog post, these changes will not affect non-US clients at the Intermediate and Pro tiers. Kraken explained that these changes are inspired by regulatory guidance on leveraged digital asset transactions. Kraken said it would email all US customers and entry-level customers who are margin trading on these new restrictions to avoid inconvenience.
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For entry-level US clients who do not meet the new requirements by June 23, Kraken will only allow them to reduce their existing margin position exposure. Any open or unresolved position prior to the stated deadline will expire 28 days from the time it was opened. Entry-level clients who currently lack open positions and do not wish to engage in margin trading do not need to take any action.
Strive to protect market participants
According to Kraken, these changes align with its mission to accelerate the adoption of cryptocurrencies so that everyone around the world can gain financial freedom and inclusion. To achieve this, the exchange believes it must introduce common sense regulations that protect market participants while allowing them to freely buy, sell, hold and use digital currencies. The exchange went on to point out that despite these changes, it still advocates for financial freedom.
This news comes as financial watchdogs around the world continue to tighten restrictions on cryptocurrencies. Aside from China, which not only banned cryptocurrency trading but now Bitcoin (BTC) mining, the United States is proactively trying to find ways to regulate the growing asset class. The Biden administration is reportedly currently working on approaches to control the crypto space.
South Korea also announced that it was considering a total ban on cryptocurrency exchanges to prevent its citizens from having the speculative nature of cryptocurrencies. While the country reviewed this approach, its financial watchdog now needs crypto exchanges to partner with banks to open real-name accounts for their users. This has proven to be a strict requirement for the country’s crypto exchanges, as banks fear they could be held liable for crypto-related money laundering.
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