Huobi Reduces Maximum Leverage to Less Than 5x for Existing Users, No Access for New Customers
One of China’s largest cryptocurrency exchanges, Huobi, is restricting its existing users from using no more than 5x leverage due to concerns about regulatory policies, as per local publication Wu Blockchain.
According to CoinGecko, Huobi accounts for the second-largest trading volume in the spot market after Binance and is followed by OKEx. The same goes for the derivatives market, while in terms of open interest (OI), it comes at the 3rd spot.
China has been stepping up its interventions in the market and tightening the controls since April. Recently, it increased its supervision measures designed to protect investors.
“This is resulting in the cooling down of China's crypto industry,” noted Sino Global capital.
As we reported, regulators' focus has been particularly on leverage and preventing speculation trading. “To prevent scammers from making a comeback and intentionally manipulating the market, there is still a high probability that there will be more supervision rules implemented one by one,” said Sino.
Already, the regulators are striking with people asking to delete crypto exchange apps, internet blocking the keywords of exchanges, and blocking a large number of crypto Key Opinion Leaders (KOLs) on Weibo.
Huobi is in the crosshairs, and as such, it is reducing the maximum leverage offered to existing users from 125x to less than 5x while new customers will not be able to use any leverage functionality.
As we reported, FUTU, one of the largest licensed internet securities companies in China, and online broker Tiger Securities have also stopped providing BTC market data in response to regulatory requirements.
However, all of this is happening ahead of the 100th anniversary of the ruling Communist Party in China on July 1st, and these strict measures extend to other sectors as well.
China views retail speculative crypto trading as seriously violating the safety of people's assets, and according to several agencies like the National Internet Finance Association of China, China Banking Association, Payment and Clearing Association of China, it “disrupts the normal economic and financial order.”
Amidst the ongoing crackdown on mining, state-owned media CGTN however promoted Chinese miners planning for greener mining while noting that they are collaborating with power generation companies to use excess energy and prevent wastage.
Not just in China but globally, the regulators have started to take a stance on cryptocurrency mining, and leveraged trading as the space continues to grow.