Japanese cryptocurrency exchanges may soon set a strict limit on the leverage they offer for margin trading in order to better protect investors. The association comprised of 16 government-approved crypto exchanges is reportedly imposing a leverage limit as part of its self-regulatory rules. There will be a grace period and exceptions.
Leverage Limit on Margin Trading
The Japan Virtual Currency Exchange Association (JVCEA) is reportedly planning to impose a leverage limit for crypto margin trading in order to protect investors, local media reported Wednesday.
The association’s members are all of Japan’s 16 government-approved crypto exchanges. It was set up in response to the hack of Coincheck in January in order to rebuild public trust in the crypto space.
The JVCEA has been working on self-regulatory measures. Nikkei reported Wednesday that the proposed rules include “an across-the-board cap on the extent to which traders can use borrowed funds to magnify gains and losses,” adding:
"The self-regulatory body for Japan’s cryptocurrency exchanges is firming up plans to set a 4-to-1 leverage limit on margin trading, aiming to reduce the risk of massive losses given the volatility of these assets."
See more - https://news.bitcoin.com/japanese-exchanges-margin-trading-limits/
