Japan’s Crypto Exchanges Request Licensed Leverage For Investors Of 4 To 10 Times

Key Points:

• Japan’s crypto exchanges are lobbying to loosen margin trading regulations.
• The exchanges may submit it to the Japan Financial Services Agency next month in the hopes of allowing individual investors to utilize the leverage of 4 to 10 times.

According to Bloomberg, unbowed by last year’s global digital-asset market catastrophe, Japan’s crypto exchanges are pressing for an easing of margin trading restrictions.

The Japan Virtual & Crypto Assets Exchange Association states that many individuals in the business want retail investors to be able to borrow four to ten times their initial investment, although consumers may presently only borrow twice their first investment.

Genki Oda, the Vice Chairman of the association, stated in an interview with Bloomberg that modifying the leverage rule could enhance the appeal of Japan to crypto and blockchain firms. He further mentioned that such a move would stimulate increased trading activity.

According to Oda, the nation’s digital-asset exchanges are in negotiations to obtain an agreement on a proposed leverage limit and may submit their proposal to the Financial Services Agency (FSA) as soon as next month.

Japan has loosened several crypto laws, such as token listing and taxes, but it is still seen as having severe regulations. Because of this emphasis on investor safety, the Japanese branch of collapsed exchange FTX was able to restore money to customers early this year, despite the group’s ongoing US bankruptcy.

The worldwide crypto crisis of last year revealed dangerous practices and resulted in a slew of bankruptcies. Regulators have reacted by enacting new rulebooks that incorporate those lessons. Certain countries, such as Hong Kong and Dubai, are attempting to attract digital-asset businesses, while the US has tightened down on the industry.

Specifically, the Securities and Exchange Commission’s (SEC) litigation against the sector raged on Twitter, with the agency filing two high-profile cases against exchange heavyweights Coinbase and Binance last week. The SEC filed a complaint against Binance on June 5 and Coinbase on June 7, accusing both exchanges of breaching securities laws by selling certain cryptocurrencies for trade.

According to an FSA official, crypto businesses must give persuasive arguments for why lowering margin trading limitations would assist the government in accomplishing its objective of growing blockchain-based enterprises. The government is willing to talk about it with digital-asset companies.

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