Japanese Crypto Exchanges Push for Limit on Margin Trading Borrowing

Japanese Crypto Exchanges Push for Limit on Margin Trading Borrowing

A self-regulatory organization formed by cryptocurrency exchanges in Japan is proposing a limit on how much investors will borrow once margin trading.

Jiji press Tuesday report published, the Japan Virtual Currency Exchange Association (JVCEA) has recommended domestic business platforms enforce a restriction that investors will solely borrow up to four times their deposit.

JVCEA has expressed the goal of protecting domestic investors, as a result, there is currently no market regime governing, how much will borrow in the cryptocurrency investor margin trading.

According to statistics, monetary service agency monitored in Japan market in April, there were approximately 142,000 crypto traders targeted in derivatives in 2017, which included a small portion of the entire 3 million traders in Japan.

However, in 2017, more than 80% of the total cryptocurrency trade volume came from the derivative business, which recorded $ 543 billion in the previous year. And 90% of that was from margin traders.

Prepared by the Japanese crypto exchanges during the reaction to a heist on the Coincheck Forum at the beginning of this year, JVCEA strives to implement its own regulatory rules to create a healthy cryptocurrency trading market. it’s currently going to submit the proposal to the FSA to get the regulator’s endorsement for a possible wider implementation.

The association indicated that the new rule could lead crypto investors’ departures from the exchanges. Thus, its goal is to gradually add measures and allow the exchanges to set their limits independently.

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