Huobi crypto exchange has decreased the size of leverage trading for its existing users in China and has stopped new traders from entering the derivatives markets owing to the current <a href="https://www.cryptoknowmics.com/news/china-renews-call-to-crack-down-on-bitcoin-mining-and-trading/">crypto regulatory policy</a> in the country.
<h2><strong>Huobi China Restricts Derivatives Leverage Trading</strong></h2>
China’s popular cryptocurrency exchange Huobi has <a href="https://twitter.com/WuBlockchain/status/1405151941705887748" target="_blank" rel="nofollow noopener">reportedly</a> restricted the size of leverage to its current users from 125x to only 5x over concerns about the new regulatory crackdowns. Additionally, new users will not be able to use leverage at all.

It’s still unclear as to how long Huobi's new derivatives trading policy will last. Chinese blockchain journalist, Wu points out that this could drive traders to other exchanges “Chinese people who cannot play highly leveraged contracts will go to Binance,” claiming many investors already had accounts with <a href="https://www.cryptoknowmics.com/news/huobi-amp-okex-restrict-services-for-chinese-clients-ahead-of-a-govt-crackdown/">OKEx, Binance, and Huobi</a>.

https://twitter.com/WuBlockchain/status/1405180030724952067

Apart from China, <a href="https://www.cryptoknowmics.com/news/search-results-for-binance-huobi-and-okex-blocked-on-chinese-search-engines/">Huobi</a> is also facing tough times in other Asian markets like South Korea amid rising regulatory concerns.

For instance, Huobi Korea recently stopped trading its native crypto Huobi Token (HT) following regulatory warnings from South Korea’s Information Security Management System.
<h2><strong>Restricting the Leverage Size Due to Regulatory Concerns</strong></h2>
Leverage trading allows investors to borrow huge sums and add them onto a position, which can increase profits. However, a wrong move can result in a margin liquidation where the loan must be paid off or more collateral must be added before the trader’s balance goes into the negative.

With the availability of high amounts of leverage often up to 125x, a tiny move can result in a trader’s entire account being blown up to leverage levels of 50x or 100x and can be even compared to that of gambling if not used with caution.

Amid the regulatory crackdown on cryptocurrencies, Huobi perhaps intends to minimize retail investors from taking on large or unnecessary risks.

Huobi China Restricts Derivatives Leverage Trading to New Users

Huobi has decreased the size of leverage trading for its existing users in China and has stopped new traders from entering the derivatives markets.

Jafrin is a cryptocurrency journalist/researcher fascinated by the world of decentralization. She is hopeful towards blockchain’s innovation and its potential to reshape the world for good. Currently, she is bringing out the best of cryptosphere via covering the latest ins and outs of the blockchain space.

Huobi China Restricts Derivatives Leverage Trading to New Users

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