Crypto exchange Binance has announced that the leverage limit has been reduced to 20x from 100x. Also, the platform plans to stop margin trading on EUR, GBP, and AUD.
Binance Reduces Maximum Leverage To 20x
Binance has announced that it’s cutting the leverage limit that users can use to trade futures contracts from 100 times to 20 times.
The crypto exchange’s CEO, Changpeng Zhao, explained in a tweet that the restriction, which has already been put on new users since 19 July, will be rolled out for existing users in the coming weeks.
In the interest of Consumer Protection, we will apply this to existing users progressively over the next few weeks.
Notably, the move comes only a day after derivatives exchange FTX announced a similar change. The reason behind these crypto firms moving in this direction might be certain upcoming regulatory challenges.
Binance, which has become the largest crypto exchange by trading volume, has been facing several regulatory hurdles lately. Several countries has disallowed the platform from carrying out regulated activities.
Earlier in the month, the firm announced that it’s discontinuing stock tokens. Hong Kong’s regulator cited these tokens as one of the reasons for its concern regarding Binance.
The Crypto Exchange Also Ceases Margin Trading On Euro, Sterling, And Australian Dollar
Only a few hours after the reduction in leverage limit, Binance has announced the end of margin trading on EUR, GBP, and AUD pairs.
The crypto exchange has announced that the platform plans to suspend margin borrowing for these pairs starting 10 August.
By 12 August, Binance intends to “conduct an automatic settlement, cancel all pending orders, and then delist (all affected pairs).”
As mentioned before, several financial regulators have raised concerns over the crypto exchange in the past couple of months. These include the likes of the UK, Japan, and Italy.
The move to cease margin trading of these currency pairs might be related to these regulatory challenges.
Related Reading | Crypto Exchange Binance Unauthorized To Work In Italy, Says Regulator
In other news, Bitcoin’s price is up a whopping 25% in the past 7 days as it trades around $38k. Here is a chart showing the trend in the crypto’s price over the last year:
BTC spikes up | Source: BTCUSD on TradingView
The sudden rise in Bitcoin’s value comes after the rumor that Amazon plans to accept Bitcoin and crypto payments.
With this spike, BTC has finally broken the $35k resistance mark that it has been unable to do for a while now. However, it’s yet to be clear whether the coin can keep this momentum and also cross the $40k level.
Featured image from Unsplash.com, chart from TradingView.com