The cryptocurrency exchanges Binance and FTX reduced their leverage from x100 to x20. The reason is pressure from regulators unhappy with the industry’s latest moves.
The CEO of Binance, Changpeng Zhao, confirms that he intends to leave his post, handing the leadership to an expert with a strong legal background. Binance will also open a headquarters, reversing its previous policy, which implied that the company did not have a single center.
Previously, the largest trading platform offered x125 leverage on its Binance Futures service. However, both the work with derivatives itself, and insufficient adherence to KYC requirements caused criticism from regulators. Given the opinion of government agencies, banks began refusing to cooperate with Zhao’s firm. Among other things, the startup was forced to withdraw support for tokenized stocks.
For new users trading futures, the x20 restriction has been in effect since July 19. It will extend to all customers of the platform in the coming weeks.
Another leading cryptocurrency futures marketplace, FTX, lowered its leverage from x100 to x20. Sam Bankman-Fried, the head of FTX, does not see this as a problem, since on average clients operate with x2 leverage.
Notably, FTX’s first outside investor in the past was Binance. Zhao’s company recently gave up its stake in the Bankman-Fried startup.