Japan's Financial Services Agency (FSA) is planning to put a cap on the leverage available for crypto margin trading to curb speculation and risk.
According to a news report from Nikkei Thursday, the financial market regulator is considering limiting crypto margin traders' borrowing power to two to four times their deposits.
Currently, there are no regulations specifically governing the cryptocurrency margin trading space in Japan, the report added, with exchanges offering as much as 25 times leverage. That means traders can effectively borrow cryptocurrencies worth up to 25 times the deposit with an exchange, however, just a 4 percent drop in the purchased crypto assets would wipe out the initial deposit.