FTX and Binance Futures started limiting new users to max 20x leverage
In a move perhaps designed to help dodge the worst of a coming regulatory storm, Binance CEO Changpeng Zhao has announced that the world’s largest crypto exchange has limited its leverage options to max 20x for new users.
.@binance futures started limiting new users to max 20x leverage last Monday, Jul 19th, 7 days ago. (We didn’t want to make this a thingy).
In the interest of Consumer Protection, we will apply this to existing users progressively over the next few weeks.
Stay #SAFU. 🙏
— CZ 🔶 Binance (@cz_binance) July 26, 2021
Binance exchange has lately very much been in the crosshairs of regulators from Britain to Japan.
Several U.K banks, including Barclays, Faster Payments, NatWest, Nationwide, Santander, and Clear Junction, then pulled Binance’s access or announced reviews of their approach to crypto at large.
Before that, Sam Bankman-Fried announced that FTX exchange will now be offering no more than 20x in terms of leverage trading on the exchange. The CEO pointed out that the average amount of leverage used on the exchange is only around 2X.
8) The average leverage used on FTX is ~2x.
And while we think that many of the arguments are high leverage miss the mark, we also don’t think it’s an important part of the crypto ecosystem, and in some cases it’s not a healthy part of it.
— SBF (@SBF_Alameda) July 25, 2021
Sam argued that this is the direction the crypto industry is heading in, claiming his exchange is making the first step.
In particular, SEC is expected to soon release a new regulatory framework for the sector, following a letter from Sen. Elizabeth Warren to SEC Chairman Gary Gensler demanding that one be released by July 28.
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