In one topic Recently, CEO Sam Bankman-Fried introduced on Twitter that FTX will cut back leverage choices from the present maximum of 100x to 20x. Bankman-Fried could be very supportive of the choice and cites a “responsible trade” strategy as one of the principle causes for the transfer.
Sam Bankman-Fried – CEO of FTX
The CEO additionally claims that FTX’s liquidation proceeds are “a very small fraction of our volume” – lower than 1% in reality. He went on to clarify that almost all of crypto exchanges at the moment provide high margin trading, and additionally they agree that liquidations and positions are only a small fraction of the quantity.
The majority of merchants on FTX use double leverage, Bankman-Fried mentioned, including:
“While there are many arguments that high leverage doesn’t work, we don’t consider it an important part of the crypto ecosystem, and in some cases it is unhealthy.”
After some inside deliberation, FTX determined to scale back the scale of the margin trade to twenty occasions – the maximum leverage. Bankman-Fried says:
“After a lot deliberation, we determined to be the primary to enter the nation that the trade is aiming for and has been on the transfer for a while. Today we’re eradicating the high leverage from FTX. The maximum allowed is 20x. “
The CEO concluded that the transfer wouldn’t have an effect on the bulk of retailers as “very few people are using it”. Additionally, he concluded that FTX “has many exciting new features and announcements coming soon”.
The CEO of Binance additionally took a comparable step notification that “Futures started last Monday, July 19th, capping the maximum leverage for new users to 20x. With the aim of protecting the interests of consumers, we will gradually apply this to existing users over the next few weeks. “
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