RoboForex Goes Against the Trend, Launches 50:1 on Crypto

RoboForex is launching an extremely high-leverage product via the company’s Belize-regulated subsidiary. As the industry is tackling the reduction of leverage across the European Union, the firm is boosting leverage on crypto trading to 50:1. For an asset class as volatile as cryptocurrency, this yields a massive risk to clients and to the brokerage.

According to Roboforex, the new cryptocurrency leverage will be available across all accounts and trading platforms and includes Bitcoin, Bitcoin Cash, Dash, EOS, Ethereum, Litecoin and Ripple. The company’s offering comes amid increasingly tight scrutiny on leverage on the part of reputable regulators. Earlier this year, the company launched Bitcoin as a base currency.

The lax regulatory framework in Belize permits the firm to deliver this product to market, however what the long-term effect of such a move will be is unknown. Regulators globally have been cooperating closely in recent years and offshore jurisdictions have historically proven to be risky for institutional and retail clients alike.

Excessive Risks

Commenting on the company’s move, the Chief Marketing Officer of Roboforex, Denis Golomedov, said: “Many of our clients trade Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term. It’s really important for them to cooperate with the broker, which provides the most comfortable trading conditions and highest security level when they trade these instruments. The increased leverage will allow our clients to implement a wider range of trading strategies and significantly increase their trading volume.”

With crypto moves in excess of 5 percent in an hour being common place, the risk to the clients and to the brokerage are significant. Excess leverage on volatile financial instruments has historically caused significant losses to the industry with Black Swan Black Swan A Black Swan event is most commonly associated with an unforeseen calamity or event. In its most basic form, this event results in disastrous consequences for multiple parties, markets, or individuals and are characterized as extraordinarily rare in frequency, yet are seemingly predictable in retrospect. In the foreign exchange space, the most noteworthy of these events in recent memory was the Swiss National Bank (SNB) crisis which roiled currency markets back on January 15, 2015.During this in A Black Swan event is most commonly associated with an unforeseen calamity or event. In its most basic form, this event results in disastrous consequences for multiple parties, markets, or individuals and are characterized as extraordinarily rare in frequency, yet are seemingly predictable in retrospect. In the foreign exchange space, the most noteworthy of these events in recent memory was the Swiss National Bank (SNB) crisis which roiled currency markets back on January 15, 2015.During this in Read this Term events such as the SNB-induced Swiss franc panic, Brexit and the Bitcoin Cash fork wreaking havoc across the market.

Reputable regulators worldwide have for years been telling brokers that they should be adopting a more conservative approach to leverage. Japan and the US pioneered restrictive leverage caps years ago, and the European Union followed suit on the 1st of August of this year. The company’s move is a clear step away from this trend.