Kraken has announced the addition of BTC (Bitcoin Cash) and XRP (Ripple) to its list of margin trading options which brings its total margin trading offering to eight digital currencies.
Increase In Number Of Cryptocurrencies On The Kraken Platform
As of the time of the addition of the two currencies, the complete list of Cryptocurrencies on the platform are Ethereum (ETH), Ethereum Cash (ETC), Tether (USDT), Ripple (XRP), Bitcoin (BTC), Bitcoin Cash (BCH), Augur (REP) and Monero (XMR). The current Kraken platform features an updated user interface, integrated tools, and charts and it also supports mobile trading.
According to the statement released by the exchange, the newly added Cryptocurrencies should not be considered collateral currencies. This means that users will not be able to use the value of their BCH and XRP token balances to open margin positions. The statement cautioned users against trading collateral currencies into the newly added tokens while the margin positions were open as this would make the equity on their accounts to go down.
Users are also advised to maintain the balances of the collateral currencies during trading.
Margin Trading In Different Jurisdictions
The statement also aligned some of the benefits that come with margin trading which included the ability to leverage an account for greater profits through margin trading, which also comes with greater risk. It also pointed out some of the risks involved with margin trading such as the risk of incurring greater losses and the possibility of margin positions being forcibly closed in the event of great losses so that leveraged funds could be protected.
The news release expounded on this saying that a trader may be forced to incur more losses on trade rather than being able to hold on till more favorable prices are registered. It pointed out to Kraken’s margin trading guides stating that the fact that margin trading has higher risks, inexperienced traders should do due diligence and thoroughly research on the trading option.
Mid this year, Korea made the conclusion that the margin trading taking place at Coinone’s platform was illegal gambling. Two months ago Poloniex announced that it would be removing margin products offered to its US users in order to maintain regulatory compliance. Japan, on the other hand, is considering putting a cap on margin trading in Cryptocurrency.
Kraken Position On Margin Trading
Three months ago Kraken, alongside Binance and Gate.io, found themselves in the news when they were referred to the NYDFS (ew York Department of Financial Services) by a New York State Attorney. This was on the allegation that the three exchanges were potentially in violation of the city’s digital currency regulations.
Jesse Powell, the chief executive of Kraken, criticized what he termed as New York’s controlling behavior. He was also stalling on handing in a questionnaire which had been issued by the office of the Attorney General. Kraken has been ranked as twenty-seven in the list of the largest Crypto exchanges by adjusted trading volumes. The list is compiled by CoinMarketCap.