The Japanese Coincheck crypto exchange is in the news today for reducing its leverage by a fifth. The latest cryptocurrency news show that Coincheck recently announced it is reducing the scope of its leveraged trading options in order to comply with the local rules.
As a blog post published on August 30 shows, officials are confident that they are reducing the size of leverage available for margin traders from five times to four times (a 20% change). The changes, according to the Coincheck crypto exchange, are expected to be put into action from October 31 this year.
Many best cryptocurrency news sites labeled the move as one that comes in direct response to the best practices put forward by the Japan Virtual Currency Exchange Association (JVCEA) which is the dedicated self-regulatory body for the Japanese exchange industry.
As the blog post reveals, both customers with uncommitted leveraged trading and customers with positions are urged to comply with the rules. For now, Coincheck said that new orders for leveraged trading are suspended.
The blog post also announces that the Coincheck crypto exchange is urging its traders to cancel any of their scheduled margin calls and take certain precautions. For those of you who are not following our altcoin news, margin trading involves a considerable amount of risk and has been suggested as a practice which can move the entire Bitcoin (BTC) market rates.
However, it is also an option which is gaining popularity and new offerings are hitting the market from different players including the popular cryptocurrency exchange Binance which announced margin trading earlier this year.
For now, the Coincheck crypto exchange is known for recovering from a giant $530 million hack in January 2018. As the exchange revealed last week, it is considering to launch a further spin-off for initial exchange offerings (IEOs). Very similar in their essence to initial coin offerings, the IEOs will facilitate sales or crowdsale tokens directly by an exchange without any need of a middleman.
To sum things up, Coincheck also said that orders will be cancelled after 14:00 on September 30, 2019 – and that the amount of margin required will change constantly which is why every user must check information at their own risk.
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