How Do Unregulated Offshore Crypto Exchanges Offer Much Higher Leverage?

Unregulated offshore exchanges are not subject to the strict minimum margin requirements set by US regulators like the CFTC. They can set their own, much lower, initial margin requirements, which translates directly to offering higher leverage (e.g.

100x or more). This attracts high-risk traders but exposes them to much greater liquidation risk, as a small price movement can wipe out their entire margin deposit.