If the price falls
What happens if the price falls.
LTV is what you owe, including any unpaid fee, divided by the value of your collateral. As the price falls, your LTV rises. These are the rules at each level, and what we send you.
What LTV means
Owed, divided by what your collateral is worth
The maturity half of the fee counts as owed from day one. So your LTV starts a little above the advance divided by the collateral value.
The examples use bitcoin. Accepted collateral: bitcoin (BTC), ether (ETH), solana (SOL), XRP and BNB, with more to come.
Example in bitcoin
USD 104,625 ÷ USD 200,000 = 52.3% LTV
The advance is USDT 100,000. The fee is a fixed 9.25% of the advance, USDT 9,250, so USDT 4,625 of it is still owed at maturity. Advances are at most 60% of collateral value when made.
The ladder · illustrative
Move the price and watch the levels
Pick your collateral, then drag the slider or use the arrow keys. The column is the value of what you pledge. The lines show where each level starts.
Your example
Slider from 40% to 130% of today's price. Starts at today's price.
Illustration only: an advance of 50% of today's collateral value, with a fixed fee of 9.25% of the advance. It leaves out costs of sale. Your Advance Confirmation sets the terms that apply. Choose your own advance in the simulator.
The five levels
What happens at each one, and what we send
Prices are for the example in bitcoin: 2.0000 BTC pledged, USD 104,625 owed. These are the bitcoin levels. The levels for other assets are set for each asset and stated in your Advance Confirmation.
- 60%Release
Below 60% (above USD 87,188 in the example) you may be able to ask for excess collateral back, on the conditions set out in repay and release.
- 75%Warning
We make reasonable efforts to tell you. No action is required at this level, but you still owe the full amount. It is a prompt to add collateral or repay part, if you want to. Starts at USD 69,750.
- 80%Top-up
We send a Top-Up Notice that states your LTV and what restores it: the collateral to add, or the repayment to make, to get back below 75%. You have 24 hours from the time it is sent. Starts at USD 65,391.
- 85%Partial sale
We may sell enough collateral to bring you back below 75%, immediately and without further notice, even during the 24 hours. We decide how much to sell, acting in a commercially reasonable manner. In a fast fall, more may be sold. Starts at USD 61,544.
- 90%Full close
Everything owed falls due. We may sell the collateral needed to clear it, without further notice, and return what is left. Starts at USD 58,125.
| If the price reaches | What it means |
|---|---|
| USD 65,391 per BTC (80%) | Add at least 0.1334 BTC, or repay at least USD 6,540, to get back below 75%. |
| USD 61,544 per BTC (85%) | About 0.80 BTC could be sold, if the sale is made at that price and before costs. You could keep about 1.20 BTC. What you owe could fall to about USD 55,390. |
A top-up counts only once the collateral has been received in your vault with the required confirmations, or the repayment has been received in cleared funds. If more than one level is reached at once, we may act on the highest.
How the price is decided
A median of at least two sources
We use the median of the US dollar prices from at least two reputable sources that we select. A median limits the effect of one bad price, but with two sources it is simply their average. If fewer than two sources are available, we may use another reputable source we select. Our calculation is conclusive unless there is a manifest error. We do not assume a stablecoin is worth USD 1.00 when we work out a price.
| Source | Price |
|---|---|
| Source A | USD 65,000 |
| Source B | USD 64,900 |
| Source C (a bad print) | USD 51,000 |
| Price we use (the median) | USD 64,900 |
With only two sources, the median is their average. A bad print of USD 51,000 next to a good price of USD 65,000 would give USD 58,000.
How we contact you
What we send, and when
A warning, a notice, a statement. Each says one thing, and the levels above say when. But a fast fall in the price of your collateral can lead to a sale with little or no notice, so do not wait for a message.
A sale can happen with little or no notice. The price of crypto can move quickly, including at night, at weekends and on holidays. At 85% and 90% LTV we may sell without contacting you first, even while a 24-hour period is running. We monitor your LTV continuously, including outside business days. Watching it is also your responsibility, and a notice may not reach you in time. If one of our notices is late or never arrives, our right to sell is not affected.
| What we send | When | Channels |
|---|---|---|
| Warning | At 75% LTV | Operational notices: email, SMS, a messaging application or the client portal. |
| Top-Up Notice | At 80% LTV, with 24 hours to act | |
| Sale statement | Within one business day after any sale | |
| Maturity reminder | Possibly, before maturity. We are not obliged to send one, and the maturity date in your Advance Confirmation is what counts | |
| Release statement | After repayment. | |
| Notice of default or termination | If either happens | Formal notices: in writing, by email and by courier, to the address in the agreement. An emailed formal notice sent before 5:00 pm on a business day counts as received that day, and otherwise on the next business day. Times are San José, Costa Rica time. |
Illustrative · move the price
What you would hear at each price
Drag the slider or jump to a level. It uses the example from the ladder: –. Change the collateral, quantity or price there. The example advance is 50% of today's collateral value, with a fixed fee of 9.25% of the advance.
Move the price
Enter your collateral in the ladder to see what you would hear.
Figures are rounded. This is a simplified picture of the agreement, not a forecast or advice. The price is indicative and the price sources in your agreement apply.
Your part
Keep your contact details current
We can only reach the details we hold. While anything is owed, the agreement asks you to:
- make sure each authorised person can be reached by email and telephone at all times;
- watch every message from us, including outside business days; and
- tell us within five business days if your name, address, ownership, control, directors or authorised persons change.
Good practice
Do not rely on us alone
The simulator shows how far the price can fall before each step. Set your own price alerts at levels that suit you.
We will never ask for your keys, passwords or one-time codes by email or message.
After a sale
If we sell, you see every line
A statement within one business day
It shows the quantity of collateral sold, the prices obtained, the costs deducted and how the proceeds were applied.
Proceeds are applied in a set order
First the costs of the sale. Then any unpaid fee. Then the advance. Then any other secured obligations. Anything left over is yours.
Any surplus comes back within two business days
We send surplus collateral or proceeds to a whitelisted account in your name within two business days after what you owe has been paid in full.
A shortfall is still a debt
If the proceeds do not cover what you owe, you pay the shortfall on demand. It remains a debt.
The risks
What else can go wrong
Not every risk is about the price.
Ineligible collateral
An asset can become ineligible, for example if it is no longer widely traded, its network fails, or an authority restricts it. We may then require you to add collateral or repay part within five business days, or sooner. Until then we may value that asset at zero. If you do not comply, we may sell it.
Other defaults
A change of control without our written consent, or not giving us information we request within 30 days, is also an event of default. We may then declare everything owed due and sell collateral. A default adds no extra fee; enforcement costs can still apply.
You can lose your collateral and still owe money. If a sale does not cover what you owe, the shortfall remains a debt. Read the risk disclosure before you apply. Every application is subject to due diligence, and we may decline any application or request. Nothing on this site is an offer.