The world’s largest cryptocurrency exchange has announced a further drop in the leverage limit for its existing users. It has introduced limits on futures trading in a bid to protect customers from insecure investments.
Last week, Binance had introduced a 20X leverage limit for all new customers. However, the exchange is preparing to extend the limits to its existing customers as well. In an announcement on Sunday, Binance CEO Changpeng Zhao confirmed the plan.
For new users (those with a Binance futures account that is less than 30 days old) there is a restriction on opening trade positions with over 20x leverage. This also applies to existing users if they have registered for futures trading in less than 30 days. “Leverage limits for new users will gradually increase only after one month from registration,” Binance said.
Binance futures trading was launched in July 2019. Initially, it allowed traders to take a position at a maximum of 20 times. However, in October that year, Binance also introduced an increased leverage margin on Bitcoin (BTC) against Tether (USDT) contracts to 125x.
The move to limit leverage is aimed to protect users from high risks. Another popular crypto exchange FTX has also announced similar cuts recently. It announced an official cut in leverage from 101x to 10x.