Japan FSA To Limit Maximum Margin Trading Leverage

According to the Japan Times, the country's Financial Services Agency (FSA) is going to limit the maximum leverage available to users to only 2x. Previously, many traders used 25x, 50x and 125x.

Analysts note that the huge volumes of leverage that is easily accessible to traders is one of the factors that stimulates market volatility, as it allows users to increase their positions without losing a significant amount of capital.

Since margin trading is associated with significant risk, the Japanese government is currently taking steps to prohibit traders from using large amounts of leverage. Thus, it is planned to protect investors during periods of volatility in the cryptocurrency markets. The date of implementation of tougher amendments to the Law is not known yet.

Crypto margin trading with significant leverage is prohibited in many countries, including the United States, due to the fact that currently platforms do not adhere to the regulations.

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