New policies on leveraged trading have drawn some attention to Japanese cryptocurrency exchange Coincheck.
A blog post today from the company announces that as of March 13, 2020, which happens to be Friday the 13th, the exchange is going to end support for leveraged transactions.
With about a quarter of lead time, investors are looking at how to make their way out of these relatively tricky positions.
New orders for leveraged trading will be suspended, and the company says that as far as termination, “the schedule is subject to change without notice” – but the internal release also details a plan for automatic decommissioning of leveraged transaction accounts that aren’t acted on by the deadline.
In general, it makes sense to limit leveraged trading, because it represents riskier types of crypto-related activity.
However, the company has not officially announced a reason for its March deadline, and William Suberg at Cointelegraph details a timeline of different changes in positions.
Suberg notes that regulator pressure from Japanese agencies may have had something to do with it, and Emilio Janus at Bitcoinist points out that for a recent suspension of leveraged trading, Coincheck cited pressure from the Japan Virtual Currency Exchange Association (JVCEA), but when these moves are less transparent, they raise a lot more questions.
Namrata Shukla at AmbCrypto goes over some of the background that may be helpful in unraveling the reasons for Coincheck’s trepidation.
“Coincheck has been treading a fine line in Japan since its hack in 2018, one where it lost over $500 million,” Shukla writes. “The impact of the hack was felt all over the country, with the regulatory authorities shocked and disturbed by the magnitude of the incident. Coincheck’s President, Toshihiko Katsuya, in an interview, had called it the largest cryptocurrency hack in history, following which regulations were made even more stringent in the country.”
Shukla quotes Coincheck’s President, Toshihiko Katsuya as saying the Coincheck hack was the “biggest … since Mt. Gox,” which reasonably leads to scrutiny for the exchange in general.
Stay tuned to see how Coincheck navigates these deep crypto waters.
