When you trade with leverage, borrowed funds that multiply your buying power in crypto or forex markets. Also known as margin trading, it lets you control larger positions with less capital—but it also turns small price moves into big losses. That’s why governments are stepping in. From the U.S. to Japan to the EU, leverage trading regulations are tightening, and not all exchanges can keep up.
These rules aren’t just about protecting beginners—they’re about stopping systemic risk. In 2024, the U.S. CFTC capped crypto leverage at 10:1 for retail traders. The EU’s MiCA framework limits it to 5:1 for major coins. Meanwhile, some offshore platforms still offer 100:1 leverage, but those are the same ones getting shut down or flagged as unlicensed. You’ll find this reflected in posts about exchanges like COREDAX, a crypto exchange that operates under specific regulatory frameworks, and why platforms like Bitbaby Exchange, a platform flagged for lacking proper oversight get labeled scams. If an exchange doesn’t mention leverage limits clearly, assume they’re not following the rules.
It’s not just about where you trade—it’s what you’re trading. Tokens with zero volume, like Archer Swap (BOW), a low-liquidity DeFi token with almost no trading activity, are often excluded from leveraged trading altogether. Exchanges that do allow leverage on these tokens are either ignoring regulations or setting traps. The same goes for airdrops like Pax.World (PAXW), an NFT project that turned out to be a high-risk, low-utility token. Leverage on unstable assets is a recipe for liquidation—and regulators know it.
Some countries are going further. Vietnam’s new 2025 directive bans foreign leverage entirely for local users. Jordan’s licensing rules now require exchanges to prove they can monitor margin calls. Even Switzerland, known for being crypto-friendly, requires strict AML checks before allowing leveraged positions. This isn’t a crackdown—it’s a cleanup. The wild west of crypto leverage is ending, and only compliant platforms will survive.
What does this mean for you? If you’re using leverage, check your exchange’s legal disclosures. Look for licenses from FINMA, the FCA, or other recognized bodies. Avoid platforms that hide leverage limits in fine print. And never trade high-leverage positions on tokens with no real volume or community—those are the ones that vanish overnight. Below, you’ll find real-world examples of how these rules play out on the ground: which exchanges got shut down, which tokens got delisted, and how traders are adapting to the new reality.
In 2025, leverage trading regulations are splitting into two worlds: strict caps in U.S. forex and wild 500x leverage in crypto. Traders need to understand jurisdiction rules, dynamic margins, and new risk tools to survive.