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Bitstamp Crypto Exchange to Pilot Leverage Trading via Bank Partnership

BlockClutch Team

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The twelfth-largest cryptocurrency market, Bitstamp, partnered with cryptocurrency-friendly Silvergate Bank to pilot Bitcoin (BTC) leveraged trading.

Based on a announcement on Jan. 14, the trade will function as the launch partner for your lender’s Silvergate Exchange Network (SEN) Leverage services.

Through the pilot phase, the exchange is only going to offer you leveraged trading to pick institutional clients. The only collateral now supported by the agency is Bitcoin, that is custodied by Bitstamp as Silvergate Bank’s first trade partner.

Silvergate Bank’s friendliness towards cryptocurrency companies is apparently paying off since it’s penned partnerships with significant cryptocurrency companies.

Silvergate, the crypto lender

Silvergate Bank’s friendliness towards cryptocurrency companies is apparently paying off since it’s penned partnerships with significant cryptocurrency companies.

In late August, Gemini, the cryptocurrency exchange based on the Winklevoss twins, announced it combined Silvergate’s SEN system to provide 24/7 fiat moves.

In accordance with a filing with the U.S. Securities and Exchange Commission in March 2019, Silvergate Bank functioned 542 electronic currency-related clients such as cryptocurrency trades and miners, custodians and international investors, amongst others. 

Legislation of crypto margin trading

currency trading makes it possible for traders to borrow money to be able to grow their potential gains. But, such trading also will come with substantial risks because it presents the possibility of losses which exceed a dealer’s initial investment. Therefore, many trades imply that amateur traders don’t take part in leveraged trading.

Leveraged cryptocurrency trading is visiting increasing focus from Japanese authorities. Since Cointelegraph reported yesterday, the Japanese Financial Services Agency (FSA) suggested reducing the leverage speed limitation of cryptocurrency margin trading from 4x to 2x. The regulator allegedly plans to set the order into clinic in April.

By decreasing the maximum speed, the FSA expects to shield shareholders from”an inordinate quantity of speculation and the probability of loss because of volatility”.

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