Binance Launches Margin Trading Platform

Cryptocurrency exchange Binance announced on Thursday morning that it has launched its margin trading platform.

Traders using the new service will be able to access leverage of 3:1 but a source with knowledge of the matter said that this is likely to increase in the near future.

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Binance’s strategy officer, Gin Chao, also told Finance Magnates at the end of last month that the exchange was going to provide more than 5:1 in leverage to its clients, suggesting that there is more to come from the company.

“This is another step in providing an inclusive cryptocurrency trading platform catering to the needs of both advanced institutional traders and retail traders under the same roof,” said Binance CEO Changpeng Zhao.

“We are providing a new tool in the financial services and cryptocurrency markets to help amplify trading results of successful trades.”

Not alone

Zhao’s firm first announced its margin trading platform in May. The firm inadvertently revealed that it would be providing the service when it published a screenshot of its latest platform update. That picture contained a “Margin” tab that users quickly picked up on.

Several other cryptocurrency companies have already launched margin trading services for their clients. Bitmex, for example, provides 50:1 leverage to its clients.

But though margin trading has been eagerly embraced by traders, it’s been given a cold reception by regulators.

Last week, the Financial Conduct Authority announced that it was considering a ban on cryptocurrency derivative products for retail investors. That would effectively scupper any margin trading plans firms had for British investors.

The FCA is not alone. Regulators across the globe have been blaming high leverage for retail trading losses for several years now.

As such, if cryptocurrency firms are going to start providing the service to their clients, they can expect swift and harsh regulatory push back if they start wiping out clients with margin calls.

 

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