Huobi, one of the largest cryptocurrency exchanges in the world, has reportedly restricted derivatives for new and existing users over concerns about China’s regulatory crackdowns.
Chinese journalist Colin Wu reported on Twitter Thursday that Huobi had temporarily dropped the maximum allowable trading leverage from 125x to less than 5x for existing users. In addition, new users based in China were not allowed to engage in derivatives trading on the exchange.
It’s unclear how long Huobi's policy will last or if it will drive crypto traders in China to other exchanges. Wu said, “Chinese people who cannot play highly leveraged contracts will go to Binance,” unless the exchange would be the next target of the Chinese government. He claimed many investors already had accounts with OKEx, Binance and Huobi.
Related: Chinese search engines block results for top crypto exchanges
Crypto users based in China are facing authorities who are seemingly taking a tougher stance on regulating digital assets this year. Huobi’s mining arm, Huobi Mall, announced in June that it would suspend mining operations in the country following three of China’s major trade associations releasing warnings against cryptocurrency investing. Officials have also drafted rules aiming to impose harsher penalties on those mining crypto in the Inner Mongolia region.
According to CoinMarketCap, Huobi Global is currently ranked as the third-largest crypto exchange, behind Coinbase and Binance. The exchange’s volume over the last 24 hours is $11.4 billion at the time of publication.