On July 19, the crypto-derivatives platform Binance Futures lowered the maximum leverage for new clients to 20x, according to the exchange’s CEO, Changpeng Zhao.
.@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
“In the interests of protecting customers, we will gradually apply this to existing users over the next few weeks,” Zhao wrote.
Earlier, reduction of maximum leverage to 20x was reported by the crypto-derivatives exchange FTX. Prior to that, the company repurchased Binance shares. Its founder Sam Bankman-Fried explained this move as a difference in management styles.
In 2019, Binance Futures increased the maximum user-available leverage from 20x to 125x. Zhao called this decision a response to demand from institutional investors.
In the same year, Binance raised the leverage for Ethereum futures to 75x.
In June 2021, the UK’s Financial Conduct Authority prohibited Binance Markets Limited from any regulated activity in the country without prior written approval.
Cayman Islands began a probe into Binance’s operations, Thailand and Hong Kong accused the company of operating without a license, Japan issued another warning.
Polish regulators warned consumers about the risks of dealing with the platform, and Italy and Malta — about Binance’s unregulated activities.
Against regulatory pressure, Zhao published an open letter in which outlined Binance’s plans to ensure regulatory compliance and customer protection.
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