Colin Wu, a Chinese journalist surmised that Huobi’s move would possibly drive users to Binance in a quest for leveraged trades.
One of the largest cryptocurrency exchanges in the world, Huobi has restricted derivatives for new and existing users over concerns that rose from China’s regulatory crackdowns.
According the the tweet made by Chinese journalist Colin Wu on Thursday, Huobi had momentarily dropped the maximum allowable trading leverage from 125x to less than 5x for existing users.
Furthermore, new users based in China were reportedly not allowed to engage in derivatives trading on the exchange.
It is however, still unclear how long Huobi’s policy will last or if it will drive crypto traders in China to other exchanges. As stated by Hu, “Chinese people who cannot play highly leveraged contracts will go to Binance,” unless in situations where the exchange is the Chinese government’s next target.
He further asserted that many investors already had accounts with OKEx, Binance and Huobi. China-based crypto users are cuurently facing authorities who are apparently taking a resilient stance on regulating digital assets this year.
One of Huobi’s mining arm, Huobi Mall, in June announced that it would suspend mining operations in the country after three of China’s major trade associations released warnings against cryptocurrency investing.
Rules have also been drafted by officials, aimed at imposing harsher penalties on those mining crypto in the Inner Mongolia region.
As earlier reported by CoinMarketCap, Huobi Global currently ranks as the third-largest crypto exchange, behind Coinbase and Binance, with the exchange volume of $11.4 billion over the last 24 hours at the time of publication.
