Existing customers with registered futures accounts that have been active for less than 30 days will be subject to new leverage limits on Binance Futures in the near future.
Consumer protection is a priority for Binance, the world’s largest cryptocurrency exchange, which is implementing additional leverage trading limitations on its futures platform in an effort to increase consumer protection.
As Binance CEO Changpeng Zhao revealed on Sunday, the cryptocurrency exchange is ready to apply the same leverage limit to existing customers, which was implemented on July 19 for new users.
“We didn’t want to make this a thingy,” the CEO said, noting that the new restrictions will be applied “over the next few weeks.”
[email protected] 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
Beginning on Monday, new users with registered Binance Futures accounts that have been active for less than 30 days were restricted from opening positions with leverage more than 20 times.
According to Binance’s leverage trading page, the increased leverage limitations will also apply to existing users who have registered futures accounts that have been active for less than 30 days. According to Binance, “Leverage limits for new users will gradually increase only after one month from registration.”
The Binance Futures trading platform, which was launched in July 2019, initially permitted investors to establish leverage bets up to a limit of 20 times, indicating that a $1,000 investment could be turned into a wager worth $20,000.
It was noted that highly leveraged trading was first offered in October utilising a “sophisticated risk engine and liquidation model,” and that the maximum leverage and margin on Bitcoin (BTC) against Tether (USDT) contracts were upped to 125x in November.
Users can store up to 12,500 USDT in BTC with a 100 USDT collateral deposit on Binance Futures, according to the company’s announcement at the time.
Recently, FTX, one of the world’s major cryptocurrency exchanges, implemented trading limits that were echoed by the current restrictions. On Sunday, the corporation officially announced a drop in the maximum leverage from 101x to 20x, which is effective immediately.
“Again, this will hit a tiny fraction of activity on the platform, and while many users have expressed that they like having the option, very few use it,” FTX founder and CEO Sam Bankman-Fried explained.
The new limits followed a Friday piece in The New York Times, which claimed that hazardous trades offered on FTX and other cryptocurrency exchanges such as Binance and BitMEX were responsible for the crypto market crisis that occurred in May.