Japan has limited leverage for margin trading in cryptocurrencies

Japanese cryptocurrency exchanges will be forced to limit leverage for margin trading of digital currencies. If earlier the maximum limit for such instruments was x25, now the leverage should not exceed the size of the initial Deposit more than 4 times. This is stated in the amendments to the law "on financial instruments and exchanges", approved by the Council of Ministers of Japan, writes Nikkei.

The new rules are expected to enter into force in April 2020. Within 18 months from now, all crypto-exchanges providing margin trading services will be required to register. Otherwise, they will lose their license and will not be able to continue to operate in the country.

The adopted amendments are designed to protect investors from the activities of financial pyramids.

We add that on March 14, the securities Administration of Canada (CSA) and the organization for regulation of the investment industry (IIROC) proposed to prohibit crypto-exchanges from increasing leverage for margin traders, as well as to limit the possibility of opening short positions by law.

The experts explained their recommendations by the" potentially manipulative or misleading " nature of these operations.

Recall that in February, the Maltese crypto-exchange OKEx increased the size of the leverage from 3x to 5x.