The Japan Virtual Currency Exchange Association has put forward a proposal to limit marginal trading loans.
With this initiative, it is suggested that investors may get borrowed capital in an amount exceeding their own deposits only by 4 times. The Association says that they strive to protect investors and such measures are related to a lack of local market regulation that could limit the upper-end of the borrowings to those who targets margin trading.
The April statistics showed that last year 142,000 traders dealt with derivatives, while the overall number of traders is some 3 million in the local market. At the same time, derivative trading accounted for more than 80% of all crypto trading in Japan, with marginal trading covering over 90%.
The Japan Virtual Currency Exchange Association was launched after the Coincheck hack this January. The unit deals with self-regulation development to improve the local crypto market. The most recent initiative is to be presented to the financial regulator willing to achieve its large-scale implementation.
Notably, it is possible that some investors can start leaving the market after the new rules, so the Association plans to set limits step-by-step.