Coincheck, the Japan-based crypto company, has aired the plans of putting an end to leveraged trading services.
Earlier this year on 30th August, the company announced reduction by 20% on the size of leverage available for margin traders.
The step was necessitated after the Japan Virtual Currency Exchange Association (JVCEA) revised their guidelines. JVCEA is a self-regulatory body that controls the Japanese Exchange Industry. These changes were effective by the end of October.
Now, Coincheck has announced that by 13th of March, 2020, they will have ended leveraged trading. The company will then allow a three-week grace period for users to transfer their money into their trading accounts.
According to the announcement, Coincheck will close all positions that will not have been settled by the end of March next year and transfer the balances to their users’ leverage accounts. All leverage account balances will also be automatically transferred after the due date.
Following the announcement, Coincheck suspended the orders on all leverage accounts. However, you can still access the database on all the leveraged transactions.
Leveraged crypto trading on the platform was put on hold temporarily in October this year. The trading had been suspended for a month following the implementation of a reduced leverage cap of 4x.
Since its formation in April 2018, Japan Virtual Currency Exchange Association has been making efforts to reduce leveraged trading. In August 2019, Coincheck said that the move to suspend leveraged trading was in compliance with the regulatory body.
While it is not clear what the motive behind Coincheck’s move is, it seems that the company is downing its tools due to a lack of interest from its users. The company assured its users that it would, however, keep improving the usability and introduce new services as well.