Democratized Prime Terms and Conditions of Service
Last Updated: October 28, 2024
By applying for a margin account, or engaging in margin trading, you agree to comply with these terms and any other applicable user agreements and you acknowledge and accept the risks of using these services.
1. Introduction.
The following terms (“Terms”) govern this Democratized Prime (“Margin Services” or “Services”) agreement between you (“You” or “User”) and Figure Markets Credit Cayman Islands and/or its affiliates (“Figure,” “Figure Markets,” or the “Exchange”). By accepting these terms or using any of the Services, you agree to the terms and conditions and accept the risks associated with using a high-risk product designed for sophisticated traders.
ARBITRATION NOTICE. You agree that disputes arising under these Terms will be resolved by binding, individual arbitration, and BY ACCEPTING THESE TERMS, YOU AND FIGURE ARE EACH WAIVING THE RIGHT TO A TRIAL BY JURY OR TO PARTICIPATE IN ANY CLASS ACTION OR REPRESENTATIVE PROCEEDING. YOU AGREE TO GIVE UP YOUR RIGHT TO GO TO COURT to assert or defend your rights under this contract (except for matters that may be taken to small claims court). Your rights will be determined by a NEUTRAL ARBITRATOR and NOT a judge or jury.
Modification Notice. We may amend or modify the Agreement at any time by posting revised terms on the Site or providing a copy to you. Any such revised terms shall be effective as of the time they are posted but will not apply retroactively. Your continued use of the Service after the posting of revised Terms constitutes your acceptance of such revised terms. If you do not agree with any such modification, your sole and exclusive remedy is to terminate your use of the Service and close any account(s).
BY CLICKING ANY BUTTON INDICATING ACCEPTANCE (E.G., AN “I ACCEPT” BUTTON) OR INSTALLING, DOWNLOADING, ACCESSING, OR OTHERWISE USING THE SERVICE, YOU ARE REPRESENTING TO US THAT YOU HAVE READ AND UNDERSTAND THESE TERMS, YOU ARE OVER THE AGE OF 18 (OR OLDER IF YOU RESIDE IN A STATE WHERE THE MAJORITY AGE IS OLDER), AND ARE EITHER CONSENTING TO BE LEGALLY BOUND BY THESE TERMS ON YOUR OWN BEHALF AS A USER OR ON BEHALF OF A COMPANY AS AN AUTHORIZED REPRESENTATIVE OF THAT COMPANY. IF YOU ARE CONSENTING ON BEHALF OF A COMPANY, THEN YOU FURTHER REPRESENT TO US THAT YOU HAVE THE AUTHORITY TO BIND THE COMPANY TO THESE TERMS AND THAT THE COMPANY AGREES TO BE LEGALLY BOUND BY THESE TERMS. IF YOU DO NOT AGREE TO THESE TERMS OR CANNOT MAKE THESE REPRESENTATIONS, THEN YOU DO NOT HAVE OUR PERMISSION TO USE THE SERVICE. YOUR USE OF THE SERVICE, AND FIGURE’S PROVISION OF THE SERVICE TO YOU, CONSTITUTES AN AGREEMENT BY FIGURE AND BY USER OR COMPANY, AS APPLICABLE, TO BE BOUND BY THESE TERMS.
2. Eligibility. The Services are available only to certain users in available geographic areas. Services are offered to and made available only to certain users in eligible jurisdictions. Not all Services or features are available in every location. Moreover, users in some locations may be provided the Services, or some portion thereof, by one or more of our affiliates. To use the Services, you must affirmatively opt in to authorizing a margin trading account with us, fund your account with acceptable collateral and meet the following criteria:
- If you are an entity, you are duly organized and in good standing under the applicable laws of the country of your organization;
- If you are an individual, you are old enough to legally form a binding contract in your jurisdiction;
- You have a valid email address, telephone number, street address and any other information that we may reasonably request during onboarding and verification;
- You have the power and authority to enter into and be bound to these Terms;
- You have not been suspended, removed or otherwise restricted from using the Services;
- You are not located in, a resident of, or under the control of any person resident in, located in, under the control of or organized in, any sanctioned or embargoed jurisdiction or any other jurisdiction here we may restrict or limit use of the Services;
- You are not listed on or under the control of any person listed on, OFAC’s list of Specially Designated Nationals and Blocked Persons List or any other similar regional, federal or non-US restricted or watch lists;
- If you are a person or entity trading in the United States or otherwise subject to applicable U.S. regulations, you have satisfactorily completed and submitted a valid certification regarding whether you are an Eligible Contract Participant (“ECP”), pursuant to 7 USC § 1a(18)), and the basis for such determination;
- You have provided us with substantiating documents, and any additional materials requested pursuant to our legal obligations and onboarding procedures; and
- You have experience trading with margin and a sufficient understanding of how margin trading works and the associated risks of using margin to trade digital assets.
You may be asked to provide additional information or to comply with additional requirements to open an account and use the Services. When applicable, we will communicate any such additional requirements to you and you must comply with the additional requirements to access and use the Services. By creating an account, accessing the Services and continuing to use the Services, you represent and warrant that the information and representations you provide are accurate and that you meet all applicable eligibility requirements. If you do not meet all eligibility requirements, then you must immediately stop using the Services and notify us. Even if you meet the eligibility requirements, we reserve the right to, in our sole discretion, determine that you are no longer eligible to own an account or use the Services.
You acknowledge and agree that we may make direct or indirect inquiries that we consider necessary to verify your identity, confirm that you satisfy the eligibility requirements, comply with applicable law and regulations, to investigate and protect you or us against fraud or other crimes, and as we may otherwise determine may be necessary or appropriate to enforce these Terms and applicable laws, subject to applicable privacy laws. We may take any action that we deem to be reasonably necessary based on the results of our inquiries and we have no obligation to inform you of the results of any inquiry or to offer remedial measures.
(a) U.S. Persons Required Certifications.
(i) Eligible Contract Participant (ECP). Margin trading is offered to individual and institutional users who submit a signed attestation, self-certifying their status as an Eligible Contract Participant (ECP) pursuant to Section 1(a)(18) of the Commodity Exchange Act, and the basis for such qualification. Only users who meet this requirement are eligible to use margin trading services.
(ii) Verification. Users must complete all required verification processes and provide necessary documentation to confirm their ECP status before engaging in margin trading.
3. Margin Lending and Leverage.
(a) Loan-to-Value (“LTV”) Ratio: The Exchange offers a maximum LTV of 80%. LTV is calculated as the loan amount, divided by the total value of your account (including any funds or assets loaned or purchased on margin).
(b) Initial Margin Requirement: To open a margin position, users must hold collateral in their account to serve as initial margin that corresponds to an LTV of 80%. For example, if a user wishes to borrow $80, they must provide $20 worth of acceptable collateral.
(c) Leverage: Figure Markets Credit Cayman Islands allows users to trade positions larger than their account balance. Users may leverage their positions using the borrowed funds up to the maximum LTV of 80%.
4. Collateral.
(a) Acceptable Collateral: The Exchange accepts only certain digital assets as margin collateral. Acceptable collateral includes USDC, Bitcoin, and Ethereum. The list of assets that are accepted as collateral is available on the Exchange’s website and may be updated from time to time.
(b) Collateral Valuation: The value of the collateral is determined by the Exchange based on current market prices as determined by the settlement benchmark. The Exchange reserves the right to adjust the valuation of collateral at any time to reflect market conditions.
(c) Isolated Collateral: Currently, users may not isolate the collateral held in their margin account from other assets in their exchange wallet or otherwise held in their accounts. As such, ALL ASSETS IN YOUR ACCOUNT ARE AT RISK OF LOSS DUE TO LIQUIDATION OR RIGHT TO OFFSET TO SATISFY ANY DEBT YOU MAY OWE TO US.
5. Settlement and Liquidation.
(a) Settlement Period: A user’s margin account will be settled hourly at the beginning of each hour (“Settlement Period”). During each Settlement Period, the Exchange will assess the value of the user’s positions and collateral. The Exchange reserves the right to change the settlement time and/or period with advance notice to users.
(b) Margin Calls: The Exchange does not issue formal “margin calls.” However, in its sole discretion, it may notify a user that its position is in danger of being liquidated. If the value of the user’s collateral exceeds the maximum allowable LTV of 90% at any time the user’s account will go into default. In some instances, we may notify you to deposit additional funds or close positions to restore your account to good standing. To avoid unintended liquidations, you must monitor your account closely and deposit additional collateral or repay borrowed funds as needed to ensure that your LTV does not exceed the maximum allowed threshold.
(c) Automatic Liquidation: If the LTV margin exceeds the maximum LTV threshold within the specified settlement period, the Exchange has the right, in its sole discretion, to automatically liquidate some or all of the assets in your account (“Automatic Liquidation”).. Automatic Liquidations may cause you to incur losses greater than the collateral you provided in connection with your loan.
(d) Liability for Losses: You understand and agree that you are solely responsible for any losses, realized or unrealized, incurred in connection with your account activities and during or as a result of an Automatic Liquidation. You agree and understand that under no circumstances is Figure liable for “lost” expectation of profits damages.
6. Fees and Interest.
(a) Fees: The user agrees to pay all fees and commissions, if applicable, associated with the Services, including but not limited to, trading fees, financing fees, liquidation penalties, origination fees, and withdrawal fees. The fee schedule is available on the Exchange’s website. Note, some transactions, including lending and borrowing transactions, may incur a minimum fee equal to $0.0000001 USD (or USD equivalent) per transaction.
(b) Interest on Borrowed Funds: Interest accrues on an hourly basis. Payment for interest incurred is required to be made in-kind, i.e., with the borrowed asset type. If you do not have sufficient assets to cover your interest payment in your account, you will incur an incremental margin loan equal to the interest owed. If you do not have sufficient collateral in your account to secure additional financing, some or all of your collateral may be liquidated.
7. Negative Account Balances.
(a) Liability for Negative Balances: You acknowledge that trading on margin carries risk of loss in excess of your initial deposit amount and you agree to be liable for any activities that would cause your account balance to become negative. Specifically, in the event that market movements cause your account to incur a negative balance, you agree to be fully liable for the total deficit.
(b) Recovery of Negative Balances: Figure Markets reserves the right to recover negative balances by any legal means, including:
(c) Failure to Repay: In the event of your failure to repay, Figure Markets reserves the right to terminate this Agreement, restrict your platform privileges, including permission to continue trading, charge interest on the amount owed at a rate determined by the prevailing platform lending rate, updated each hour, or otherwise 8% per year, compounded daily, pursue legal action, initiate collection activities to recover outstanding balances, or take any other action, as permitted by law, to protect its interests.
8. General Risk Disclosures.
(a) Risk Acknowledgement: You agree and understand that margin trading in digital assets involves significant risk, including the potential loss of all of the assets in your account, and that you may incur financial losses exceeding the value of assets in your accounts as a result of market fluctuations.
(b) Your Responsibility: You agree and understand that you are solely responsible for understanding the risks associated with margin trading and trading digital assets and that you should only trade with funds/assets that you can afford to lose.
(c) Figure Markets Credit Cayman Islands is NOT a member of FINRA or the NFA. It is not registered with either the SEC or CFTC or any similar regulatory authority in any jurisdiction.
9. Lend/Borrow Pool Risks.
(a) Defaults and Socialized Losses: In the event the assets in a lending pool are insufficient to repay lenders, obligations will be covered by the assets contributed to the insurance fund(s), which is funded, in part, by liquidation penalties. In the event the assets of the insurance fund(s) are insufficient to cover losses, losses will be socialized among users.
(b) Liquidity Risk: You understand and agree that lending and borrowing digital assets exposes you to liquidity risk, as there is a possibility that assets, including a borrower’s collateral, may not be able to be bought or sold quickly enough to prevent or minimize losses. In instances of limited liquidity, particularly in times of high volatility, large price movements can occur, which may result in outsized or unanticipated losses as well as an inability to execute trades at favorable prices or at all. Figure Markets does not guarantee the availability of liquidity for trades and it does not guarantee that positions will not be impacted by slippage. You are solely responsible for assessing the liquidity of assets you transact with and associated risks, including for losses you may incur. You are responsible for conducting your own due diligence before engaging.
10. Account Maintenance.
(a) Account Monitoring: You understand and agree that you are solely responsible for monitoring your account and positions regularly to ensure compliance with collateral requirements and to avoid liquidations and penalties.
(b) Account Information: You agree to keep your account information up to date and to notify us of any changes.
11. Termination.
(a) Termination by You: You may terminate this Agreement at any time by providing written notice to us at support@figuremarkets.com and repaying all borrowed funds and accrued interest.
(b) Termination by Us: We reserve the right to terminate your account if you breach any terms of this Agreement or any applicable terms or engage in fraudulent, manipulative, or illegal activities.
(c) Settlement of Borrowed Funds: Upon termination, you are required to settle all outstanding borrowed funds and pay any additional amounts owed.
12. Amendments. We reserve the right to amend these terms at any time. To the extent possible, any amendments will be communicated to you before taking effect. Continued use of the margin trading account constitutes acceptance of the amended terms.
13. Governing Law. These terms shall be governed by and construed in accordance with the laws of New York. Any disputes arising from these terms shall be resolved pursuant to Figure Markets’s arbitration provisions as provided in its general Terms and Conditions.
14. Indemnification.
**You agree to indemnify and hold us harmless from any and all claims, losses, expectation of profits, liabilities, damages, costs, and expenses (including legal fees) arising from your use of margin trading services or breach of any of our terms. **
15. Dispute Resolution.
(a) Arbitration: Any disputes arising out of or relating to this Agreement shall be resolved through arbitration pursuant to Figure Markets’s arbitration policy, as provided in our general Terms and Conditions.
16. Acknowledgement.
By using the margin trading services, you acknowledge that they have read, understood, and agree to be bound by these terms and disclosures.