BEQUANT uses a ‘Loan-To-Value’ (LTV) ratio methodology to manage loans.
The loan to value ratio represents the ratio of the market value of the digital assets that the client has borrowed, to the market value of the total sum of the Eligible Collateral, including the loan amount.
Currently, BEQUANT Pro offers five types of loans to clients.
• Leveraged loan
This is a loan that constitutes a multiple of the existing user assets to be held in their BEQUANT account.
• Credit Line
This is a facility for asset loan which constitutes a multiple of the existing user’s assets held in their BEQUANT Pro account, custodied with multiple exchanges, and for use with BEQUANT asset services on a rolling basis. Customers can use any part of the credit line granted to them, up to the total amount of the credit limit.
• Single platform leveraged loan or loan facility
Single platform loans and facilities are dedicated to a unique venue, whereby the existing user assets held in such venues, will not amount to less than 10% of the loan or loan facility amount.
• Uncollateralized Loan
This type of loan; a BEQUANT Exchange product, is only available for longstanding customers, who can benefit from interest-free, post-trade limits, regardless of the provision of collateral, with pre-agreed settlement terms and no option to withdraw funds.
• Off-platform Swaps
BEQUANT may enter a cryptocurrency swap, which is a process of exchanging one digital asset for another between two wallets, without using fiat currency as an intermediary. Cryptocurrency swaps are usually performed using a cryptocurrency trading exchange or a swapping platform, to allow quick, coin-to-coin transactions.
Eligible collateral is an asset that a lender accepts as security for a loan. If the borrower defaults on the loan payments, the lender can seize the collateral and resell it, to recoup the losses.
Here is a list of current eligible collateral:
Available assets are the amount of your eligible collateral that are available for withdrawal or to use for trading. If the amount turns negative, you must top up your account with eligible collateral, equal to this amount (margin call amount).
Margin calls and Liquidation Rules
BEQUANT monitors two LTV levels: 1) Initial and 2) Liquidation.
These levels can vary, depending on the amount, the type of collateral posted, and the terms of the loan granted.
If your Loan-to-Value ratio falls below the initial LTV Level, BEQUANT will issue you with a margin call. You have 12 hours to add additional funds to your account. These additional funds serve the purpose of raising your LTV ratio back above the initial level.
If your Loan-to-Value ratio falls below the liquidation LTV Level, or if you have not responded to a margin call within twelve hours, BEQUANT reserves the right to commence the liquidation of your account until it is determined that a sufficient portion of the loan has been repaid.
Sensible risk management should be utilised when using leveraged positions.
§ To request a leveraged loan, contact [email protected]
§ Your account manager will discuss the terms of the loan with you
§ You may be asked to complete a loan questionnaire and provide financial or other information BEQUANT requires
§ Once the Loan is approved, you will need to sign a loan agreement and confirmation of a digital assets loan
§ The loan amount will then be credited to your account