Australia proposes leverage caps for crypto-settled derivatives

ASIC’s proposal would extend leverage limits and protections against negative balances to certain derivatives settled in digital assets.

Australia’s securities regulator wants to extend leverage limits and other retail investor safeguards to certain trading contracts settled in crypto.

On Monday, the Australian Securities and Investments Commission (ASIC) proposed expanding the rules for contracts for difference (CFDs), which let traders bet on price movements without owning the underlying asset.

The rules generally cover contracts settled in cash or by offsetting obligations between the parties. ASIC wants to add contracts settled by transferring digital assets, including those tracking non-crypto assets, provided they meet the other criteria for a CFD.

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