Coincheck Exchange to Terminate Leveraged Crypto Trading; Is Regulation To Blame?
The Japanese crypto exchange Coincheck has suddenly made the decision to no longer conduct leveraged trading, only a few months after relaunching its tool for it.
The news came in a blog post from December 16, in which the platform is saying it will no longer have users creating leveraged positions.
— Coincheck(コインチェック) (@coincheckjp) December 16, 2019
The Settlement Deadline is in March
The traders who happen to have open positions will have to settle by March 13, 2020. They will also have to complete the balance transfers until the month is over. This is what the blog post reads:
“Coincheck has decided to end the ‘leverage transaction’ service on Friday, March 13, 2020. If you have a current position, we would like to ask you to settle all positions by the deadline and transfer the Japanese yen balance in Coincheck's leverage account to your trading account.”
Officials Didn’t Give Any Reason for the Move
Officials didn’t give any reason for the move. The new decision has been made 6 weeks after the leveraged trading was relaunched after an absence of 6 months. Back in August, Coincheck has reduced the available scope leverage by 20%, saying it’s following Japan’s self-regulatory guidelines from the Japan Virtual Currency Exchange Association (JVCEA).
On a broader perspective, the margin trading that crypto exchanges have been offering in recent months was very criticized, with analysts saying trading tools are linked with the increase in the Bitcoin (BTC) markets’ volatility.