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According to Chinese writer Colin Wu, the move from the crypto exchange would likely drive customers to Binance for greater leveraged deals.
Huobi, one of the world’s largest cryptocurrency exchanges, has purportedly banned derivatives for new and existing customers due to regulatory crackdowns in China.
Chinese journalist Colin Wu reported on Twitter Thursday that Huobi had temporarily dropped the maximum allowable trading leverage from 125x to less than 5x for existing users. In addition, new users based in China were not allowed to engage in derivatives trading on the exchange.
Exclusive: Due to concerns about regulatory policies, China’s largest exchange Huobi recently restricted the leverage of existing users to less than 5x after stopping new users in China from using derivatives. The previous maximum was 125x pic.twitter.com/B5MWVJYGzK
— Wu Blockchain (@WuBlockchain) June 16, 2021
It’s unclear how long Huobi’s policy will last or if it will drive crypto traders in China to other exchanges. Wu said, “Chinese people who cannot play highly leveraged contracts will go to Binance,” unless the exchange would be the next target of the Chinese government. He claimed many investors already had accounts with OKEx, Binance and Huobi.
Crypto users in China are confronted with authorities that appear to be adopting a harder stance on regulating digital assets this year. Huobi Mall, Huobi’s mining arm, said in June that it will halt mining activities in the nation following warnings from three of China’s top trade groups against cryptocurrency investing. Officials have also developed guidelines with the goal of imposing tougher punishments on individuals who mine cryptocurrency in the Inner Mongolia area.
According to CoinMarketCap, Huobi Global is currently ranked as the third-largest crypto exchange, behind Coinbase and Binance. The exchange’s volume over the last 24 hours is $11.4 billion at the time of publication.