FTX and Binance, two of the crypto industry’s largest exchanges, have both cut the amount of leverage users can trade with. FTX’s decision came into force yesterday, while Binance made the decision last Monday, 19 July.
Now, both exchanges are allowing users a maximum leverage of 20x. According to FTX CEO Sam Bankman-Fried (SBF), this is a direction that “the industry is headed, and has been headed for a while.”
In comparison, Binance CEO Changpeng Zhao (CZ) described this move as being in “the interest of consumer protection.” He also added in a tweet today that the exchange made this move last week, saying “We didn’t want to make this a thingy (sic).”
What is leverage?
Leverage is a term used in the trading world to describe how investors increase their exposure to market assets by paying less than the full amount of any given investment. When using 20x leverage, for example, a trader can turn a $100 bet into a $2,000 one without needing the entire $2,000.
Źródło: https://decrypt.co/76858/ftx-and-binance-remove-high-leverage-from-exchanges
