Crypto exchange FTX has lowered its limit on leverage trading from 101X to 20X, according to FTX CEO Sam Bankman-Fried, mainly due to a lack of use.
Bankman-Fried explained on Twitter today that high-leverage trading makes up a small percentage of the exchange's trading volumes and is only used by a small portion of its user base. He pointed out that the average amount of leverage used on the exchange is only around 2X.
"And while we think that many of the arguments [about] high leverage miss the mark, we also don't think it's an important part of the crypto ecosystem, and in some cases it's not a healthy part of it," he said.
Bankman-Fried argued that this is the direction the crypto industry is heading in, claiming his exchange is making the first step.
"Again, this will hit a tiny fraction of activity on the platform, and while many users have expressed that they like having the option, very few use it," he said. "And it's time, we think, to move on from it."