Introduction
1. If you apply for a Margin Lending Facility a Service available through our Site, then this Margin Lending Facility Agreement (“MLFA”) will apply to you in addition to our standard Terms & Conditions (“T&C”) and form part of the Agreement between you and the Company.
2. To the extent of any inconsistency between this MLFA and our TOU, this Agreement shall prevail.
Risk Disclosures
1. We are furnishing this section to provide you with some basic facts about purchasing Assets on Margin, and to alert you to the risks involved with Margin Trading. Trading through a Margin Account is highly risky and may result in the loss of funds greater than those that you have deposited into your account. In addition, it is important that you fully understand the risks involved in trading Assets on Margin.
2. When your purchase Assets, you may pay for the Assets in full or you may borrow all or part of the price from us. Where you choose to borrow Assets from us, you will open a UPay Account with us. The Assets purchased in full will for the Collateral for the loan to you. If Assets that make up the Collateral decline in value, so will the Collateral. As a result, we can take actions such as to sell the Collateral in any of your UPay Account held with us or to issue a Margin Call in order to maintain the require Asset value of the Account.
3. You should understand that pursuant to this MLFA we generally do not issue Margin Calls and we will not credit your Account or increase your Margin to meet you margin deficiencies. We will instead generally liquidate positions in your account in order to satisfy Margin Requirements without prior notice to you and without an opportunity for you to choose the positions to be liquidated or the timing or the order of the liquidation.
4. You can lose more Assets than you have deposited in your Account. A decline in value in the value of Assets that are purchased on Margin may require you to provide additional Collaterals to avoid the forced sale (a “liquidation”) of those Margin purchased Assets or other Assets in your Account.
5. If the value of your Collateral falls below the Margin Requirements, or if we revise these requirements to be higher at any time, we can sell the Assets in your Account to cover the Margin deficiency. Where the liquidation is insufficient to cover such shortfall, your will be legally responsible for making up of such shortfalls.
6. We have no obligation to contact a User before a Margin Call, or a liquidation is valid. Thus, you should understand that you need keep yourself informed about preceding Margin Requirements and how Margins will affect you at any time a Margin Requirement changes against your favour. You should also ensure proper risk management of positions that are in line with your risk tolerance.
7. You are not entitled to choose which Assets are liquidated to meet a Margin Call. We have sole discretion and right to decide which positions to liquidate in order to protect our interest.
8. Margin Requirements can be amended and raised at any time at our sole discretion without written notice to you. These changes often take effect immediately and will affect your existing Margins. If your use of Margin is not within an amended or raised Margin Requirements, you can expect to be liquidated immediately without notice.
9. You are charged Interest in connection with borrowing Margins in order to maintain a short position. Interest rates paid to, or rates and fees collected from your in connection with borrowing or lending Assets are subject to frequent change without notice and will vary based on the nature of the Asset being sold short. You pay Interest on your Margin Loan Facility which we can amend at our sole discretion without prior notice to you. These Interest costs will reduce your return on investment.
10. You may borrow Margin to stake Assets. When you stake Assets, you may lose control over the Assets (such as to the network you have staked it to) including the ability to repay Margin used to the staked Assets. In such a circumstance you are still obligated to repay interests for as long as these assets are no repaid. You should carefully consider the risks of staking Margin Assets.
Short Selling Special Risks
Short selling exposes you to additional risks, potentially leading to significant losses. If you fail to maintain adequate Margin, we may close your position by repurchasing the Asset, potentially causing substantial losses if the Asset's price has risen above your short sale price. Short selling involves unlimited market risk, as you might need to buy back the Asset at a higher price to cover a short position, with no cap on potential price increases. When shorting, we provide the Asset from our inventory, outsourced liquidity providers, or marketplace liquidity. Borrowed Assets can be recalled at any time without notice, and lenders can demand their return whenever they choose. In cases where we cannot borrow or reborrow Assets following a recall, we may buy-in Assets on your behalf to cover short positions, without prior notice to you, and you are responsible for any resulting losses or costs, including transaction fees.
Interpretations and Definitions
“Asset” Means any contract, such as a derivative or future contract or any digital asset such as a crypto currency token or a non-fungible token.
“Collateral” Means the Asset you have pledged and charged as security for the grant of Margin.
“Liquidation” Means a forced sale of an Asset belonging to a User arising from either Collateral or Margin not meeting Margin Requirements.
“Interest” Means the prevailing rates of interests charged for the lending of Margin by us to you.
“Margin Call” Means an instruction by us, the Company to you, a User to increase the Collateral.
“Margin Trading” Means engaging in any transaction in which assets are purchased entirely or partially through a Margin Lending Facility extended to you, a User for which your assets act as Collateral.
“Margin Lending Facility” Means the Margin we make available to you subject to the terms under this MLFA.
Representations and Warranties
1. You represent and warrant that:
The assets deposited in your account as Collateral are not borrowed and are totally unencumbered by any mortgage, charge, lien or other interest;You have read, understood and accepted risk disclosure and the Margin Requirements set out above in relation to borrowing risks and accepted the obligations to the Company;
2. You agree and undertake to notify us when either of the representations and warranties cease to be true.
Loan Facility
1. You may draw upon the available Margin from your Margin Account for Margin Trading or to continue to hold Assets purchased through the Margin extended by this Margin Lending Facility provided that you maintain sufficient Collateral in your Margin Account at all times as required under the Margin Requirements. We will determine the Margin Requirements of your Margin Lending Facility in our sole discretion.
2. You agree that we are entitled to charge you Interest for the Margins we issued to you, in whatever Asset type, such Margins may have been incurred at the rates as specified on our Site and as amended from time to time at our sole discretion regardless of whether prior notification has been given. You agree that we have no obligation to, and in some cases no ability to Liquidate any Margins so as to reduce your exposures to Interest. You undertake to pay all Interests incurred from Margin lending Facility extended to you regardless whether you Account goes into a deficit.
3. Unified and Universal Collateral– When you use our Margin Loan Facilities you agree and accept the unification of the Margin across all Services across and Account with us.
Security Interests
1. All Assets purchased with Margin shall form Collateral. Assets in your Account to the extent sufficient are deemed pledged as Collateral relative to the Margin requested and granted in accordance with the prevailing Margin Requirements.
2. All Collaterals of any kind held by us are hereby pledged to us by you and you grant to us a perfected first-priority lien and security interest in our favour to secure the performance and obligations and liabilities to us arising under this or any other agreement with us to the maximum extent permitted under applicable laws.
Margin Accounts, Margins and automatic Liquidation
1. If at any time your Account does not meet the Margin Requirements we may, without limiting its other rights, sell, close or otherwise liquidate all or part of your positions in any of your Account held with us or with an any agent or broker with no prior notice to you.
2. This Liquidation will usually occur automatically but not withstanding the foregoing, we have no obligation to take any action if your Account does not meet the Margin Requirements.
3. Our Margin Requirements or risk control may include leverage ratio limits or position size limits. If these limits are reached or exceeded, you may not be able to place new orders and you authorize us to liquidate existing positions and/or enter into risk reducing Transactions on your behalf without notice, in order to bring your Account back into compliance with the relevant Margin Requirements.
4. Margins are subject at all times to Margin requirements established by us and you agree and undertake to maintain your Margins within Margin Requirements. We reserve the right to modify Margin Requirements for any and all Users any open or new positions at any time, in our sole discretion without prior notice.
5. You undertake to monitor your Account at all times to ensure that you maintain sufficient Collateral at all times to meet our Margin Requirements.
6. We may reject any order if your Account has insufficient collateral to meet Margin Requirement and can delay processing of any order while determining the Margin status of your Account.
7. The Margin Requirements on our Site is only indicative and does not reflect the actual Margin Requirements which can change rapidly depending on market conditions.
8. You will not rely on us to close or liquidate positions in your Account in the event you do not comply with the Margin Requirements. In-particular, you shall not rely on the auto-liquidation rights and systems to function as a stop-loss order. You shall not assume that we shall liquidate positions to prevent you from losing more than you have deposited. Likewise, we may in our sole discretion and our interests delay or decide not to liquidate positions in your Account with a Margin deficit and shall have no liability for any loss you sustain in connection with such delay of or forbearance from Liquidation.
9. For the purposes of determining your compliance with our Margin Requirements, we will in our sole discretion determine the value of positions and Assets in your Account. Our calculations may differ from the valuation and prices disseminated by other markets, and you agree to subject yourself unconditionally to our valuations.
10. These terms and the Margin Requirements are designed to protect the integrity of the market and are not designed to protect you. You understand and agree nonetheless that by using our Margin Lending Facilities you are subjecting yourself to this MLFA and the Margin Requirements. Our failure to apply or enforce any of the terms here in or in the Margin Requirements does not give you any right to bring an action against us and nothing in this Agreement constitutes a warranty or undertaking that we will apply or enforce the Margin Requirements.
Liquidation and Set-Off
1. You agree that we have the right in our sole discretion by not the obligation to Liquidate and/or set-off all or any part of your positions or Assets or Collaterals in any of your accounts, at any time and in any manner without prior notice to you at any time where:
Your account has no Assets are in deficit;
You have insufficient Assets or Collateral to meet Margin Requirements;
We anticipate in our sole discretion that your holding of any position is likely or will result in a future violation of our Margin Requirements;
Where you execute an order for which you do not have sufficient Assets;
Where we determine in our sole discretion that Liquidation is necessary to advisable to protect you;
In an event of default, a breach by one or more terms on your part in this MLFA, our Terms & Conditions or the Margin Requirements;
Where this agreement is terminated;
Where legal or investigation proceedings are commenced by either party.
(Each a “Liquidation Trigger”)
1.1 You shall be liable and shall promptly pay us for such deficiencies in your account that arise from such Liquidation or that remains after such Liquidation. We have no liability for any losses sustained by you in connection with such Liquidation (or omissions on our part to do so), even if you re-establish a liquidated position at a worst position. You shall indemnify and hold harmless us for all actions, omissions, costs, fess (including but not limited to attorney’s fees), or liabilities associated with such Liquidation undertaken by us.
1.2 We may allow you to request the order of Liquidation of assets in your Account in the event of a margin deficiency but such requests are not binding on us and we retain the sole discretion to determine the assets to be liquidated including the order and manner of the Liquidation. We may liquidate your position through any method at our sole discretion and we or our Affiliates may take the counter party position for such Liquidations.
1.3 Margin Calls - if we do not for any reason liquidate under margined positions and issue a Margin Call, you shall immediately deposit assets into your Account such Assets or Collateral to satisfy our Margin Call.
Suspension
In the event a Liquidation Trigger occurs you agree that we shall hold the sole right and discretion to freeze all or any part of your Account or Assets and/or to exercise positions on your Account without prior notice to you.
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