You are viewing CRYPTO 9.8 Loan levels and limits as it appeared on 25/10/2027. The current version of CRYPTO 9.8 Loan levels and limits was last updated on 25/10/2027.

CRYPTO 9.8 Loan levels and limits

Modelling of loan parameters

25/10/2027R
  1. (1) A firm must, prior to offering a qualifying cryptoasset borrowing service to a retail client, model and set limits for:
    1. (a) the loan-to-value ratio;
    2. (b) the margin call level; and
    3. (c) the liquidation level.
  2. (2) The firm must base the limits in (1) on modelling of previous price performance and volatility of the qualifying cryptoasset borrowing collateral and qualifying cryptoassets provided to the retail client as part of the qualifying cryptoasset borrowing service. On this basis, margin calls and liquidation should not be expected to occur within the first 6 months following the commencement of the qualifying cryptoasset borrowing service.
25/10/2027G

In CRYPTO 9.8.1R(1)(c), ‘liquidation level’ refers to the loan-to-value ratio at which the firm is entitled to realise some or all of the retail client’s qualifying cryptoasset borrowing collateral to discharge the retail client’s indebtedness to the firm in relation to the qualifying cryptoasset borrowing service.

25/10/2027G

Firms should note that the risk of liquidation will likely increase the higher the loan-to-value ratio is set, even if all other factors remain constant.

25/10/2027R

Modelling and limit-setting should be conducted without factoring in any potential additional qualifying cryptoasset borrowing collateral that may supplement the initial qualifying cryptoasset borrowing collateral provided by the retail client.

25/10/2027R
  1. (1) A firm must, prior to entering into an agreement relating to its qualifying cryptoasset borrowing service with a retail client, provide the retail client with the option to set their own limits for:
    1. (a) the loan-to-value ratio;
    2. (b) the margin call level; and
    3. (c) the liquidation level (including both full and partial liquidation levels).
  2. (2) The limit(s) set by the retail client may not be higher than the levels modelled by the firm under CRYPTO 9.8.1R.
Point In Time
25/10/2027