Coinbase plans to launch spot margin borrowing with up to 10x leverage in the coming weeks, but ordinary US retail traders will not get access. Only customers who qualify as Eligible Contract Participants can use the product domestically, while eligibility elsewhere depends on jurisdictions Coinbase has not named.
Coinbase plans to launch spot margin borrowing with up to 10x leverage in the coming weeks, letting eligible traders borrow against collateral to buy crypto on spot markets. US customers who do not qualify as Eligible Contract Participants will be excluded, the exchange said in its Oct. 7 announcement.
Eligibility narrows US access
A 2021 statement from a CFTC commissioner describes discretionary investments exceeding $10 million in aggregate, or exceeding $5 million when the transaction is for risk management purposes — a threshold that puts the planned service beyond ordinary US retail reach. The restriction applies specifically to spot borrowing: Coinbase says the product will come from affiliates and stays separate from Coinbase Financial Markets, which offers US derivatives.
For US customers, the margin lenders will be Coinbase Custody International Limited or Coinbase Credit, Inc., even though traders would manage spot borrowing and derivatives exposure through a shared margin portfolio. Access outside the US also depends on selected jurisdictions that Coinbase has not identified, so availability cannot be assumed for every trader.
Collateral stays exposed to liquidation
Qualifying customers get maximum leverage of 10x on selected major assets and 5x on other supported assets. Traders can post collateral in more than 15 supported assets, with those holdings remaining on Coinbase, and loan balances, collateral levels, and margin health stay visible in real time across open borrows.
Keeping collateral on the platform does not protect it from a forced sale. Coinbase warns that borrowed trading magnifies losses as well as gains, that collateral can be liquidated without notice, and that losses can exceed the initial deposit. The announcement also leaves borrowing rates, collateral valuation haircuts, and liquidation thresholds unspecified — terms that determine the cost of the service and when collateral is at risk.
A distinct product alongside Deribit's migration
Coinbase completed the Deribit migration on Oct. 2, setting the stage for Coinbase's expansion, while the spot-margin plan adds a distinct borrowing option for eligible customers.
Source: CryptoSlate
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