The founder of FTX, Sam Bankman Fried, has announced plans to remove high leverage from the trading platform. The highest amount of leverage that will be allowed on FTX will be 20x.
The announcement was made on Twitter
The announcement came from the founder in a tweetstorm on Sunday. He spoke about the margin system on FTX and said that removing high leverage from his platform “is a step in the direction the industry is headed.”
In the tweets, he also explained that removing the option to trade above 20x leverage will only hit a tiny fraction of activity on the platform and that only a small amount of users uses it. He says that the average amount of leverage used is ~2x, and that he thinks high leverage is not an essential part of the crypto ecosystem.
FTX wants to encourage responsible trading
According to Bankman, the goal of FTX is to encourage responsible trading. It seems that the decision to remove these high forms of leverage is based on this goal and that he hopes other exchanges will follow.
The tweetstorm came five days after FTX raised money at an $18 billion valuation. The exchange raised $900 million in a new funding round that closed last Tuesday. Participants in the round included SoftBank Group Corp, Sequoia Capital, and Third Point,