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Japan gets in the ring with margin trading exchanges

Priya

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Japan clamps down on Bitcoin [BTC] and other cryptocurrencies margin trading
Source: Unsplash

Japan, one of the countries at the forefront of cryptocurrency regulation, took another step towards regulation. The regulation in question was passed on to all crypto exchanges providing margin trading services to its customers.

According to a local news portal, Nikkei, “Japanese financial authorities will expand on already pioneering rules for cryptocurrency trading to bring further order to one of the world’s biggest virtual currency marketplaces.”

The report further stated that Japan’s cabinet gave a green light to a draft amendment for the Financial Instruments and Payment Services Law, on Friday. This amendment will not allow cryptocurrency exchanges to provide leverage of up to 2 to 4 times on initial cap and will come into effect from April 2020 onwards.

Simply put, margin trading is a trading service that enables users to participate in cryptocurrency trading activities with borrowed money/leverage. Here, lenders will lend their coins to traders in exchange for some interest on the borrowed cryptocurrency.

Further, in a practice similar to that of foreign exchange trading, all the exchanges involved in leveraging will be required to re-register with the regulatory authorities of Japan, including top brokerage firms. This action would not only allow financial bodies to take anti-money laundering measures but would also ensure investor protection.



The 18-month timeframe for the implementation of the new rules also present an opportunity to the Financial Services Agency, the regulatory body of Japan, to crack down on unregistered cryptocurrency exchanges, reported Nikkei. Additionally, virtual currency operators would be divided into categories, including exchanges involved in margin trading and exchanges involved in initial coin offerings.

This marks a significant development as previous reports suggested that the total cryptocurrency margin trading in Japan was much more than cash transactions. The sum of cash transactions in Japan, towards the end of December, was around 777.4 billion JPY, according to Japan Virtual Currency Exchange. The sum of margin trading was noted to be 8.42 trillion JPY, around $75.6 billion, almost 11 times more than that of cash transactions.





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Priya is a full-time member of the reporting team at AMBCrypto. She is a finance major with one year of writing experience. She has not held any value in Bitcoin or other currencies.

Bitcoin

Bitcoin’s [BTC] biggest threat is its users, not governments, says Bitcoin.org’s Cobra

Febin Jose

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Bitcoin’s [BTC] biggest threat is its users, not governments, says Bitcoin.org’s Cobra
Source: Pixabay

Bitcoin [BTC], the world’s largest cryptocurrency, saw a significant surge earlier this month, helping the coin break strong resistance at $5,000 and $5,200. Following the great fall of the king coin in early 2018, the Bitcoin ecosystem was struggling with scalability and technological issues, eventually leading to the hard fork.

Bitcoin.org’s Cobra, who is also the co-owner of Bitcointalk.org, has always maintained that Bitcoin was the cryptocurrency to look out for through his various Twitter bouts with prominent personalities in the cryptoverse. Due to his strong, unbridled support for Bitcoin, he has often trashed altcoins for their low market dominance.

In a new Twitter thread, Cobra spoke about the “biggest threat” to the Bitcoin ecosystem. Even though many crypto-enthusiasts believe that governments and technological issues were the biggest threats to the king coin, Cobra had a completely different opinion.

According to the Bitcoin maximalist, users have the potential to signal Bitcoin’s doom. His tweet read,

Source: Twitter

Source: Twitter

Though most Bitcoin supporters usually support his opinions, this tweet was met with a lot of resistance. Twitterati swarmed the thread in an attempt to prove him wrong. A user named @MrHodl alleged that this could not be true as Bitcoin had “no community.” He added that this, in turn, prevented toxicity in the ecosystem.

Cobra replied to the tweet stating,



“I think there is a community, it’s just not fully representative of everyone with a stake in Bitcoin. Most holders are quiet and not too familiar with what’s going on. There’s people with 1000+ BTC and they don’t engage at all with discussion platforms, just lurk.”

Some Twitter users took it as an attack on Bitcoin investors and opposed Cobra’s stance. A user @CarstenBKK commented,

“Maybe I am lost in translation. What do you wanna tell us? That you are part of Bitcoin network of people owning/using it, but you are just disgusted by the idea, that the network is called community in the sense of direct human collaboration and affection to the groups ideals?”

Previously, Cobra had accused Twitter’s Jack Dorsey and Square Crypto of pandering to Bitcoin users, while also suggesting that the crypto project was merely a way to bring in more users for Dorsey’s CashApp. His tweet read,

“Gotta respect how hard @sqcrypto is pandering to Bitcoiners. Very clever how @Jack has embedded himself in the community; in return the community promotes @CashApp, which gives that service a small but dedicated and activist group of early users.”





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