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Huobi, one of the largest cryptocurrency exchanges in the world, has reportedly restricted derivatives for new and existing users over concerns about China’s regulatory crackdowns.
Chinese journalist Colin Wu reported on Twitter today that Huobi had temporarily dropped the maximum allowable trading leverage from 125x to less than 5x for existing users. In addition, new users based in China were not allowed to engage in derivative trading on the exchange.
Exclusive: Due to concerns about regulatory policies, China's largest exchange Huobi recently restricted the leverage of existing users to less than 5x after stopping new users in China from using derivatives. The previous maximum was 125x pic.twitter.com/B5MWVJYGzK
— Wu Blockchain (@WuBlockchain) June 16, 2021
It’s unclear how long this Huobi policy will last or if it will drive crypto traders in China to other exchanges. Wu said “Chinese people who cannot play highly leveraged contracts will go to Binance,” unless the exchange would be the next target of the Chinese government. He claimed many investors already had accounts with OKEx, Binance, and Huobi.
Related: Chinese search engines block results for top crypto exchanges
Crypto users based in China are facing authorities seemingly taking a tougher stance on regulating digital assets this year. Huobi’s mining arm, Huobi Mall, announced last month that it would suspend mining operations in the country following three of China’s major trade associations releasing warnings against cryptocurrency investing. Officials have also drafted rules aiming to impose harsher penalties on those mining crypto in the Inner Mongolia region.
According to CoinMarketCap, HUOBI GLOBAL is currently ranked as the third crypto exchange under COINBASE and Binance. The exchange’s volume over the last 24 hours is $11.4 billion at the time of publication.
