Binance cryptocurrency exchange limits the list of fiat currencies for margin trading. The company announced this on its official website.
“Today, margin trading associated with a very high risk of losing funds. A trader can both get rich and lose all his investments in one moment. So, for example, with a sharp jump in the value of one or another cryptocurrency, the entire user’s margin balance will be completely liquidated. We do not want this”, – is the speech in the statement of the Binance exchange.
Thus, starting from August 8, 2021, exchange traders will not be able to use the Australian dollar, euro and British pound for margin trading. All margin trades in the above currencies closed on August 12, 2021. That is, all deals on these instruments must be closed by traders on their own by August 10, or the platform will close positions forcibly on August 12.
Delisting coincided with increased pressure from regulators to Binance
Binance didn’t clarify what exactly prompted it to abandon these fiat currencies. The delisting time coincided with increased international regulatory pressure on Binance-affiliated entities.
Bitcoin and other cryptocurrencies gained popularity among retail investors during the Covid pandemic, prompting regulatory authorities to pay special attention to trading platforms despite the fact that a huge part of cryptocurrency trading is unregulated.
Regulators in the UK, Japan, Italy and Thailand have raised concerns about Binance conducting unauthorized financial services.
EUR and GBP pairs may be unavailable due to FCA’s decision to ban Binance in the UK. Judging by the fact that the SEPA payment system has become unavailable on the exchange, the European Union is preparing to take a similar position with the British authorities. Apparently the Australian regulator will join them.
Now Binance is on the “black list” of the financial authorities of a dozen developed countries, which does not yet include the United States. The company is trying to take advantage of this by planning an IPO of its American subsidiary. However, the position of institutional clients “buried in the bud” this idea.
According to the reputable business publication Financial Times, at least two large crypto funds left the site. The investments withdrawn by ARK36 and Tyr Capital, who do not want to risk in the conditions of refusal to work with the exchange of banks and payment systems. Binance also lost a number of already completed deals with institutions.
Discontinued support for tokenized shares and cut leverage
Earlier, Binance also announced that it would end support for tokenized shares. Full support for such assets will end on October 14, 2021.
What caused the delisting of tokenized shares also remains unknown. However, at the end of April this year, the German financial regulator BaFin warned investors about possible violations related to tokenized shares on the crypto exchange. The platform closed trading on these assets three months after their launch.
It also became known earlier that Binance had cut the leverage to 20x. According to the head of the cryptocurrency exchange Changpeng Zhao, the decision made to protect the interests of consumers. A similar decision previously made the FTX cryptocurrency exchange.