Citing its desire to comply with regulatory requirements in multiple jurisdictions, Poloniex exchange that is owned by Goldman Sachs-backed Circle, notified customers Wednesday that it is removing margin trading and lending from its platform.
The move comes amid uncertainty about coming regulation that will affect the cryptocurrency community.
Exchanges, developers, and crypto buyers and investors still struggle with understanding what is required of them by regulators from various jurisdictions. Chief among these is the United States Securities and Exchange Commission that, as of yet, has issued no formal regulatory framework.
There was speculation that the SEC would be working toward issuing a regulatory framework during the second half of 2018, but nothing has been announced. That’s not to say the agency has not been in contact with big players and exchanges so as to tip its hand about regulation to come to give stakeholders a chance to comply.
The full text of the Wednesday email from Poloniex to its customers:
As part of our effort to continuously professionalize and improve Poloniex, we are taking steps to remove our margin and lending products for US-based customers.
These changes are part of our ongoing commitment to ensure that Poloniex complies with regulatory requirements in every jurisdiction. In doing so, we’re also making every effort to ensure a smooth transition for customers who may be affected. We will provide more communication in the coming weeks about the final date but it will be by the end of the year and encourage customers to take steps to unwind margin positions at their convenience.
Existing loans will remain open and continue to fund positions and earn interest for their previously specified duration.
If you have any questions or feedback on this, you can reach out to our customer experience team at https://poloniex.freshdesk.com/support/home.
We at Crypto.IQ think this is happening because Poloniex is a U.S.-based exchange and likely to feel the brunt of any SEC wrath for failing to comply.
BitMEX remains open to margin trading, and since the exchange is based outside the U.S., does not allow U.S.-based customers to register, so it does not fall under SEC jurisdiction.