FTX removes high leverage from its platform

Karthik Subramanian

FTX, one of the fastest-growing crypto exchanges in the world, has announced that it would be reducing the maximum leverage that it allows for traders on its platform, and henceforth, the maximum leverage would be only 20x.


The exchange had been allowing leverage of up to 100x so far but based on certain conditions like higher fees and specific instruments etc but now it has chosen to remove any such leverage and has decided to switch to lower leverage in order to make trading ‘safer’ on its platform.

FTX has justified this move saying that the trades that happen on its platform with higher leverage are less than 1% of the total volume at the exchange and that the average leverage used at the exchange is only around 2x which is a bit of a surprise considering that it is home to a very large number of retail traders who are likely to prefer higher leverage for their trades.

The company believes that the entire industry is likely to move towards lower leverage in the coming months as this would make the trading ecosystem much safer for traders, less liquidations and also put less strain on the margin handling that the exchanges would need to do. FTX has also said that it would be introducing more apps and features in the coming months.

FTX had recently raised close to a billion dollars in what was seen as the highest equity raise in the crypto industry so far. It has been expanding its business globally and has also been expanding its business outside the exchange ecosystem. It has been planning to enter into the payments industry and recently also seems to be expanding into the NFT ecosystem to make full use of the currency craze in the crypto ecosystem.

By moving to reduce the leverage used on trades, FTX hopes to be the first mover as other exchanges may also start following suit in due course of time. As institutions enter into the crypto space, they are likely to be very averse to large volatility and even bigger liquidations. They are likely to favor more stable conditions and prices which would mean that the leverage that each trader has, needs to be controlled. Large leverages tend to lead to risky trades which are likely to keep the market very volatile. In order to slow down the market, controlling the leverage would be key. Though large leverages are given in the FX market, it is much bigger than crypto at this point in time and so the retail trading in the FX space doesn’t affect the overall ecosystem too much.

Read this next


Tools for Brokers makes it easy to migrate to its liquidity bridge for MT4/5, cTrader, Match-Trader

“We know how hard it is to move to a new liquidity bridge, especially for prime brokers who distribute liquidity to other market participants. And we didn’t want our clients to miss out on all the functionality that Trade Processor has to offer.”

Digital Assets

Auros raises $17m to strengthen LP and market making business in Crypto

“This strategic partnership with VivCourt and Bit Digital will place Auros in a strong position to build upon our best-in-class market making offering, grow our Derivatives Solutions business and continue to expand market share in our core HFT arbitrage and relative value strategies.”

Digital Assets

Metacade Presale Hits Final Stage Before Listings, Raising Over $500k in under 24 hours

Metacade, fast becoming the most exciting GameFi project in 2023, has reached the final stage of its token presale after raising more than $500k in 24 hours, reaching a total raise of $12.4m.

Digital Assets

KyberSwap announces first ever $ARB token liquidity pools, liquidity mining and trading campaigns on Arbitrum

Since launching in 2021, Arbitrum has emerged as one of the most promising Layer 2 solutions, with its ability to scale Ethereum and enable faster and cheaper transactions.

Digital Assets

Exness, Pepperstone, ThinkMarkets, TMGM tap Crossover’s execution-only crypto ECN

“We are delighted with the financial backing of global industry leaders in retail brokerage, market making, quantitative trading, banking, and crypto-native firms. Our consortium partners share our vision and have paved the way to create scale and opportunities for other industry participants to join our platform and participate in future rounds.”

Digital Assets

MetaMask taps MoonPay for fiat to crypto on-ramp in Nigeria

“Our partnership with MetaMask will enable us to provide Nigerian users with Bank Transfers, a widely used payment method across Nigerian e-commerce businesses. We hope this integration opens the doors for Nigerians to fund their self-custody wallet through a simplified user experience.”

Crypto Insider

Dubai Multi Commodities Centre picks Enya Labs as technology partner

Dubai Multi Commodities Centre (DMCC) has tapped Enya Labs as an ecosystem partner as it seeks to expand Dubai’s leading position as a global hub for digital assets.

Institutional FX

Advanced Markets integrates PrimeXM’s XCore trading and aggregation engine

“Advanced Markets Group has been at the forefront of liquidity innovation since its establishment in 2006. This strategic move, to further enhance our liquidity offering, is testament to our commitment to continue providing our clients with reliable and robust solutions that meet their needs.”

Digital Assets

Bybit taps Paradigm to launch spread trading on USDT-margined instruments

“We are thrilled that our collaboration with Paradigm has enabled us to provide traders with a more streamlined experience when it comes to spreads trading on USDT margined instruments. This launch further demonstrates Bybit’s commitment to bringing next level opportunities to our clients via superior trading experiences with top notch partners.”