FTX has announced the removal of high leverage, with the maximum allowable leverage now being 20x.

The FTX Exchange has stated that its margin trading leverage would be reduced. The maximum leverage available will now be 20x. High leverage, according to Bankman-Fried, is harmful to the crypto ecosystem. FTX CEO Sam Bankman-Fried has indicated that the exchange's leverage choices will be reduced to 20x as the greatest level currently available.



In a recent post on Twitter, Bankman-Fried revealed that FTX will no longer enable leverage trading on the exchange greater than 20x. Bankman-Fried supported the conclusion with numerous significant points in the thread. One of the reasons for the decision, according to the FTX founder, is the exchange's dedication to "responsible trading."

Liquidation revenue on FTX, according to Bankman-Fried, is "a minuscule proportion of our volume." The FTX report goes on to say that the majority of crypto exchanges now allow high levels of margin trading, and that they, too, concur that liquidations and positions account for a small percentage of total volume. He also stated that liquidations on the FTX account for less than 1% of the company's volume and positions.

The shift to a 20x leverage ratio

Bankman-

Fried went on to say that the bulk of FTX traders use 2x leverage. He goes on to say that the arguments for using high leverage are not without merit. “And while we believe many of the high-leverage arguments are off the mark, we also do not believe it is an important component of the crypto ecosystem, and in some circumstances, it is not a healthy part of it.”

After extensive internal deliberation, FTX has decided to decrease margin trading size to 20x as the greatest feasible leverage available. “And so, after a lot of back and forth, we're going to be the ones to take the first move here: a step in the direction the industry is heading, and has been heading for a while,” Bankman-Fried said. We're removing high leverage from FTX today. The maximum allowed will be 20x.”

The bulk of traders, according to Bankman-Fried, will be unaffected by the move because "relatively few use it." FTX also has "a lot of fun new features and announcements coming down the road," according to the suddenly billionaire. (We didn't raise that money for no reason!)”

FTX just completed a $900 million Series B fundraising round, which set a new record. The amount raised is the largest in the history of crypto-exchanges. The exchange continues to put pressure on competitors like Coinbase and Binance.

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