Raising margin requirements (reducing the leverage available to traders) is an important part of risk management that should be exercised by financially responsible brokers and regulators (and in the case of stocks and futures by exchanges) when changing market conditions point to risk of increased volatility.
After all, the margin requirements for a given currency pair even in normal market conditions are determined based on the typical volatility for that pair. That’s why exotic currency pairs have higher margin requirements (less leverage available to traders) than major currency pairs.
We discuss the rationale for raising margin requirements based on market conditions and the perils of brokers who do not respond to changing risk in greater detail in the following thread: LOW leverage is in fact dangerous