FTX and Binance crypto exchanges lift high leverage from exchanges

The crypto industry’s two largest exchanges, FTX and Binance, have reduced the amount of leverage users can trade. Monday July 19 decision, while the FTX decision took effect yesterday. 

According to FTX Chief Executive Sam Bankman-fried (SBF), this is a direction that has been “driven by the industry and has been driven for some time.” 

In response, Binance Chief Executive Changpeng Zhao (CZ) described the move as “for the protection of consumer rights.””He said on Twitter today that the exchange took this step last week and said,” we didn’t want to do this thing.” 

What is leverage? 
Leverage is a term used in trading to describe how investors increase their exposure to market assets by paying less than the total amount of a given investment. For example, when using 20x leverage, a trader can convert a $ 100 bid to a $ 2000 bid to a $ 2000 bid.

The higher the leverage, the higher the value of a particular deal you can make. Of course, high leverage is inherently fraught with high risks for both the stock market and the consumer. While SBF believes that many arguments about high leverage are “not true,” it acknowledges that in some cases it is an unhealthy part of the crypto industry. 

“This will affect a small part of the activity on the platform, and while many users have indicated that they like this option, very few are using it. And we think it’s time to move on,” SBF added. 

Behind FTX and Binance collapse
In the Binance case, the CZ statement was much more appropriate. Monday July 19 leverage restrictions begin, and Binance will continue to apply the restriction to existing users ” gradually over the coming weeks,”CZ said in a tweet. 

Moreover, Binance today announced that it will remove the AUD, EUR and GBP margin pairs by August 12. 

FTX and Binance
Both exchanges of related ads are FT.

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