Borrowing Agreement - OKX Middle East Fintech FZE
Last updated: 20 December 2024
Section 1 - Introduction
1. Scope
1.1 This Agreement applies to the Services that we offer to you through the Platform under the VA Lending and Borrowing license issued to us by the VARA.
1.2 The Services that we offer are set out and described in Section 2 of this Agreement.
2. Applicability
2.1 This Agreement, as amended from time to time, supplements and is in addition to the Terms of Service. It is intended to be read in conjunction with the Terms of Service.
2.2 The provisions set out in the Terms of Service apply to this Agreement and are incorporated by reference and shall be deemed to have the same force and effect as if set out in full in this Agreement.
2.3 Unless otherwise defined in Schedule 1 of this Agreement, any capitalised terms used in the Terms of Service shall have the same meaning in this Agreement.
2.4 In the event of any conflict or inconsistency between this Agreement and the Terms of Service, this Agreement shall prevail to the extent of the conflict or inconsistency.
3. Acceptance
3.1 By using the Services, you agree to be bound by the provisions set out in this Agreement and you acknowledge and accept the risks involved as described in Clause 15 of this Agreement.
Section 2 - Description of Services
4. Flexible Loan
4.1 The Flexible Loan product allows you to borrow Virtual Assets from other users participating in the OKX Simple Earn product.
4.2 In offering the Flexible Loan product to you, OKX shall provide you with a Loan in the form of Virtual Assets.
4.3 As part of the Flexible Loan:
(a) the Interest Rate, which shall be expressed as an Annual Percentage Rate, shall be variable and shall change on an hourly basis and calculated in accordance with Clause 8;
(b) the Collateral you provide must always be worth more than the value of the Loan in accordance with Clause 10;
(c) the Loan does not have a set date on which you must repay it and is therefore open ended; and
(d) you may repay the in whole or in part Loan at any time.
4.4 A list of Virtual Assets that you may borrow is available on https://www.okx.com/trade-margin.
Section 3 - Fees and Payments
5. Fees
5.1 Subject to Clause 6, we may charge you any fees or commissions for providing the Services. Our current fees are set out on https://www.okx.com/fees/margin.
5.2 In the event that we decide to amend our fees, you shall be given 30 calendar days written notice of this.
5.3 By using the Services after the period set out in Clause 5.2, you agree to incur such fees.
6. Taxes
6.1 Subject to Applicable Law, if we charge you any fees, we may also be required to charge you tax such as Value Added Tax in addition to our fees.
6.2 By using the Services you agree to incur and pay any applicable tax.
Section 4 - Borrowing
7. Loan Procedure
Entering into a Loan
7.1 You may enter into a Loan at any time through the Platform.
7.2 To enter into a Loan, you must input into the Platform the amount of Virtual Assets that you want to borrow.
7.3 Before you enter into a Loan, the following shall be displayed to you:
(a) Interest Rate;
(b) Collateral;
(c) LTV Ratio;
(d) Margin Call Ratio; and
(e) Liquidation Ratio.
7.4 The Interest Rate, Collateral, LTV Ratio, Margin Call Ratio and Liquidation Ratio applicable to you shall vary depending on the amount of Virtual Assets you wish to borrow.
Loan Limit
7.5 The maximum amount of Virtual Assets available for you to borrow may change from to time.
7.6 In determining the maximum amount of Virtual Assets that you may borrow, OKX shall take into account a range of factors, including but not limited to, the following:
(a) the total number of Virtual Assets in your Account;
(b) the total length of time that you have been a client of OKX; and
(c) your trading activity on the Platform.
Disbursement of the Loan
7.7 To enter into the Loan you must click “confirm” on the Platform. By entering into the Loan, you:
(a) enter into a legally binding contract with OKX;
(b) are deemed to have accepted the Interest Rate, Collateral, LTV Ratio, Margin Call Ratio and Liquidation Ratio displayed to the Loan; and
(c) are liable for the Loan until such time as you fully repay it.
7.8 The Disbursement shall occur immediately to your Account once you click “confirm”.
7.9 From the time of Disbursement, you are permitted to transfer the amount of the Loan (in part or in whole) out of the Platform and use the proceeds in any way you desire.
Statements
7.10 OKX shall not provide you with monthly statements in relation to the Loan.
7.11 OKX shall ensure that you are able to generate monthly statements on your Accounts which shall set out:
(a) the total value of Virtual Assets in your account;
(b) all loans entered into by you;
(c) the amount of interest in US Dollars accrued by you during the relevant month; and
(d) the total collateral posted by you during the month.
7.12 OKX shall provide you with reminders on a monthly basis to remind you that you are able to generate monthly statements through your Account.
8. Interest
Interest Period
8.1 Each Interest Period shall be of a duration of one hour.
8.2 The first Interest Period shall commence from the start of the next hour immediately after the Disbursement.
8.3 Each subsequent Interest Period shall commence at the start of each hour thereafter.
8.4 The final Interest Period shall be the last hour on which the Loan is repaid or, if earlier, the last hour on which your Loan undergoes Liquidation.
Calculation of Interest
8.5 Interest shall be expressed as an Annual Percentage Rate.
8.6 The Interest Rate applicable to the Loan for each Interest Period is the percentage rate per annum determined by matching loans to the highest amount of Interest demanded by users lending their Virtual Assets through the OKX Simple Earn product.
8.7 The prevailing Interest Rate for each Interest Period shall be communicated to you by displaying it on your Account and shall be updated automatically on an hourly basis.
Payment of Interest
8.8 Interest shall accrue from Disbursement until full repayment of the Loan, or if earlier, when the Loan undergoes Liquidation.
8.9 Interest shall be due and payable on an hourly basis for as long as the Loan is still outstanding and remains unpaid.
8.10 Interest due shall automatically accrue in your Account at the end of each Interest Period on a compound interest basis.
9. Collateral
Providing Collateral
9.1 In order to enter into the Loan, you must provide Collateral by posting it onto the Platform.
9.2 Collateral may only be provided in the form of Virtual Assets and we shall specify the types of Virtual Assets that we accept as Collateral before you enter into the Loan.
9.3 In the event that a Virtual Asset that you used as Collateral is delisted, we shall inform you of this in advance and provide you an opportunity to provide alternative Collateral within a set time frame, at our discretion.
9.4 The amount of Collateral you need to provide shall be displayed to you before you enter into the Loan.
9.5 In all cases, the value of the Collateral you provide must always be more than the value of the Loan.
9.6 Upon providing the Collateral, we shall lock the Collateral within your Account and you may not access it or withdraw it until the Loan is repaid in full.
Posting further Collateral
9.7 You may be required to deposit further Collateral from time to time either:
(a) in accordance with Clause 10 of this Agreement; or
(b) if we determine in our sole and absolute discretion that more Collateral is required.
9.8 In the event that you are required to provide further Collateral, we shall notify you through your Account that your Collateral is insufficient and that you need to provide further Collateral in accordance with Clause 10.
9.9 It is your responsibility to monitor your Account to ensure that the Collateral deposited remains sufficient. Any airdrops that accrue to the Collateral shall not be considered or taken into account for the purposes of determining whether the Collateral is sufficient.
Return of Collateral
9.10 We shall return your Collateral to you only once the Loan is repaid in full in accordance with Clause 12.
9.11 If an Event of Default occurs, you shall immediately and irrevocably forfeit in favour of OKX:
(a) the amount of Collateral as equates to your outstanding Loan; or
(b) the entire Collateral, if the outstanding Loan amount is greater than the Collateral.
Holding of Collateral
9.12 Legal and beneficial ownership of any Collateral you provide OKX under this Agreement transfers to OKX until repayment is made under Clause 12.
9.13 Collateral held by OKX will be held in connection with this Agreement only and will not be used by OKX in connection with any other services on the Platform.
10. LTV, Margin Call and Liquidation Level
LTV Ratio
10.1 When you enter into a Loan, we shall provide you with an LTV Ratio applicable to your Loan.
10.2 Throughout the duration of the Loan and until the Loan is either repaid, or if earlier, the Loan is liquidated, your LTV Ratio shall be:
(a) calculated on a real time basis in accordance with Schedule 2 of this Agreement; and
(b) communicated to you on a real time basis on your Account.
10.3 You are required to continuously maintain sufficient Collateral to ensure that the LTV Ratio displayed in your Account remains either:
(a) at 69%; or
(b) below the Margin Call Ratio.
10.4 You understand and accept that due to the volatile nature of Virtual Assets, your prevailing LTV Ratio may change rapidly.
Margin Call
10.5 When you enter into the Loan, you shall be provided with a Margin Call Ratio expressed as a percentage.
10.6 If the LTV Ratio reaches or exceeds the Margin Call Ratio but is less than the Liquidation Ratio, a warning shall be communicated to you through your Account that your Loan is at risk of Liquidation.
10.7 If you receive a warning, you must immediately top up your Collateral to ensure it remains sufficient. You understand and accept that due to the volatile nature of Virtual Assets, there is a risk that you may be liquidated whilst you are in process of topping up your Collateral.
10.8 We are not obligated to provide you with a warning and it your responsibility to continuously monitor your Account and LTV Ratio to ensure that you are not at risk of Liquidation.
Liquidation Ratio
10.9 When you enter into the Loan, you shall be provided with a Liquidation Ratio expressed as a percentage and calculated in accordance with Schedule 3.
10.10 If your LTV Ratio reaches an amount equal to or greater than the Liquidation Ratio, we may do one or more of:
(a) liquidating your Collateral; or
(b) immediately deduct outstanding Interest from your Account.
10.11 We may liquidate your Account regardless of whether a warning in accordance with the Margin Call Ratio has been provided to you.
10.12 You understand that Virtual Asset markets are open 24 hours a day and 7 days a week. Therefore, liquidation may occur at any time and at any hour.
10.13 We may charge you a liquidation fee for any liquidation which we carry out. Our current liquidation fees can be viewed on https://www.okx.com/fees.
11. Insurance Fund
11.1 There may be instances where despite the steps we carry out to liquidate your Account, we are unable to recover the Loan Value and any sums due and payable to us. This occurs where, despite the steps we carry out on liquidations, your Account has a negative balance.
11.2 In such instances, we may at our own discretion use the Insurance Fund to cover any potential losses you may suffer either in whole or in part.
11.3 The use of the Insurance Fund is entirely at our own discretion and is not an as of right benefit or entitlement that is available to you.
11.4 In the event that we choose not to make use of the Insurance Fund, you remain liable for any shortfall in your outstanding Loan.
12. Repayment
12.1 You may repay the Loan in whole or in part at any time through the Platform by using the Virtual Assets available in your Account.
12.2 Once you have repaid the whole of the Loan and any outstanding Interest due, the Collateral shall be released to you promptly and no later than within one hour.
12.3 All repayments made by you shall first be allocated to our fees (if any) followed by Interest and finally to the Principal of the Loan.
13. Gas Fees
13.1 When using the Services, you may be charged a fee by the relevant blockchain to carry out actions on the network. This is commonly referred to as a “gas fee”. We do not have any control over the amount of this fee.
13.2 You shall at all times be liable for this fee.
14. Events of Default
14.1 If any one or more of the following events have occurred, OKX may immediately withdraw, suspend or terminate its obligations under this Agreement and declare all or part of any outstanding Loan immediately due and payable:
(a) We unable to deduct Interest which is due and payable for an Interest Period or any amount due and payable to OKX due to an insufficient balance in your Account;
(b) The Collateral in your Account is insufficient and you do not provide further Collateral within the period of time specified by OKX;
(c) We receive notice, whether formally or informally, or otherwise have reason to believe that you have been or currently are subject to any voluntary or involuntary proceedings for its dissolution, winding-up, liquidation, bankruptcy, administration, receivership or extrajudicial or judicial reorganisation or obtains a composition with its creditors, or any such analogous procedure or step is taken in any jurisdiction;
(d) You indicate to us that you are unable to meet your obligations under this Agreement;
(e) This Agreement is or becomes invalid, unenforceable or ineffective for any reason whatsoever; or
(f) You or, if applicable, your directors, officers, employees or persons acting on your or their behalf (i) violates any of the Sanctions Laws or (ii) becomes a Sanctioned Person.
14.2 Each event set out above is an Event of Default.
Section 5 - Risk Disclosure
15. Incorporation by Reference
15.1 The risks set out in the Terms of Service are incorporated by reference in this Agreement.
15.2 You should carefully review the risk disclosure statement set out in the Terms of Service. By using the Services, you acknowledge that you have read and understood the risks associated with your use of the Services and that your Virtual Assets are at risk of loss whilst you are using the Services.
15.3 In addition to the risks set out in the risk disclosure statement, the Services carries with it specific risks which are described below:
Liquidity Risk
15.4 Whilst your Virtual Assets are provided as Collateral, you shall not have access to them. You therefore cannot make use of these Virtual Assets for as long as they are used as Collateral.
Liquidation Risk
15.5 The underlying value of Virtual Assets is volatile and may change rapidly without any notice. As such, the value of the Virtual Assets that you borrow as well as your Collateral is at risk. In a volatile market, you risk liquidation with very little notice and therefore losing your Collateral.
15.6 In addition, in a volatile market, you risk liquidation whilst you are in the process of topping up your Collateral.
Early Warning Risk
15.7 We are not under any obligation to keep you informed of your risk of immediate or pending liquidation in accordance with the Margin Call Ratio. However, if we do so, the notification may be made by email and phone notification or through the Platform.
Volatile Interest Rate
15.8 You understand and accept that Interest is determined by matching against the highest demanded amount of Interest by lenders on an hourly basis. As such, the Interest charged to you may be volatile, will fluctuate on an hourly basis and in some circumstances may be as high as 100% APR.
Linked Product Risk
15.9 Liquidity for the Products is provided by users making use of the OKX Simple Earn Product and not by OKX.
Section 6 - Miscellaneous
16. Limitation of Liability
16.1 In addition to the limitation of liability provisions in the Terms of Service, the Services under this Agreement are provided to you on an ‘as is’ basis.
16.2 We disclaim any and all liability whatsoever for any loss you incur from your use of the Services unless such loss results from our gross negligence or wilful default.
17. No Advice
17.1 We are not permitted to advise you in relation to the Services we offer to you.
17.2 Any materials or information that we provide to you regarding the Services through our Website, the Platform or any other means does not constitute investment advice nor a recommendation of the Services we offer to you. You should not rely on this when making a decision to borrow Virtual Assets.
18. Commissions
18.1 We do not earn any commissions, remuneration or any other benefit from the Services that we offer to you on the Platform.
19. Complaints
19.1 If you are dissatisfied or otherwise wish to complain about the Services offered to you under this Agreement, you may file a complaint through the online "Contact Us" form submission, email, ticket or live chat.
19.2 An explanation of our complaints procedure is available on https://www.okx.com/help/okx-middle-east-complaints-handling-process.
20. Representations, warranties and undertakings
20.1 In addition to the representations, warranties and undertakings you have made to us in the Terms of Service, you additionally represent, warrant and undertake that:
(a) you shall maintain the required Collateral in accordance with the LTV Ratio;
(b) you understand the risks associated with the use of any Services;
(c) we shall not be liable to you for any losses you incur as a result of your use of the Services unless such loss results from our gross negligence or wilful default; and
(d) you are and shall remain compliant with all Applicable Laws.
21. Payments
21.1 Any payments to be made under this Agreement, including fees and tax, are due immediately on our demand.
21.2 Once demanded, you must pay these amounts to us and we reserve the right to automatically deduct these amounts from your Account.
22. Amendment
22.1 This Agreement may be amended in the same manner provided for under the Terms of Service.
22.2 An amendment to this Agreement does not automatically amend any other agreement that you may have with us including the Terms of Service.
23. Termination
23.1 This Agreement may be terminated in the same manner provided for under the Terms of Service and shall have the same effect as provided for under the Terms of Service.
23.2 The termination of this Agreement does not impact any other agreement you have with us, including the Terms of Service. You acknowledge and agree that if this Agreement is terminated, it shall not automatically terminate any other Agreement you have with us.
23.3 We reserve the right to terminate this Agreement in our absolute and sole discretion for any reason whatsoever.
23.4 In the event that this Agreement is terminated, you shall be liable for any outstanding obligations you have under this Agreement.
Schedule 1 – Definitions
In this Agreement, the following words, expressions and abbreviations shall have the following meanings unless context requires otherwise:
Account | means your general OKX trading account that you use to trade Virtual Assets. |
Agreement | means this Borrowing Agreement, as amended from time to time, and includes any schedule to it. |
Applicable Law | means the laws, regulations and rules of any competent authority that apply to OKX and/or its users, as enacted, replaced, amended, extended, consolidated, substituted and/or re-enacted from time to time, and which includes the VARA Rules. |
Collateral | means the Virtual Assets used to secure the Loan. |
Disbursement | means the time at which the Loan is disbursed to you. |
Sanctions Law | means the financial, economic or trade sanctions laws, regulations or restrictive measures administered, enacted or enforced by (a) the United Nations Securities Council; and (b) the United Arab Emirates |
Event of Default | means the events of default set out at Clause 14.1 of this Agreement. |
Flexible Loan | means the product described at Section 2 of this Agreement. |
Insurance Fund | means the pool of Virtual Assets belonging to and maintained by OKX that may be used to cover losses stemming from a liquidation of a Loan. |
Interest | means the additional amount due on the Loan as calculated in accordance with the Interest Rate. |
Interest Period | means the period of time for which Interest is due |
Interest Rate | means the Annual Percentage Rate applicable to the Loan |
Liquidation | means the immediate termination and liquidation of the Loan in accordance with Clause 10 of this Agreement. |
Liquidation Ratio | means the ratio at which the Loan will be liquidated. |
Loan | means the loan of Virtual Assets subject to certain terms and conditions from time to time. |
Loan Value | means the value of the Loan calculated as a combination of the Principal due on the Loan and any outstanding Interest. |
LTV Ratio | means the loan to value ratio calculated in accordance with Schedule 2 of this Agreement. |
Margin Call Ratio | means the ratio at which a warning will be sent. |
OKX | means OKX Middle East Fintech FZE. |
OKX Simple Earn | means the OKX Simple Earn product offered to customers of OKX and subject to separate terms and conditions. |
Principal | means the amount of Virtual Assets borrowed and outstanding. |
Platform | means the platform maintained by us and that we make available to you for trading Virtual Assets. |
Sanctioned Person | means any person (including individuals and companies and other entities) who is (i) directly targeted by Sanctions Laws, (ii) directly or indirectly, owned (aggregated 50 per cent.% or more of the shares) or controlled by, or acting on behalf of, or for the benefit of, one or more persons targeted by Sanctions Laws, or (iii) located or operating in countries or regions which are subject to comprehensive Sanctions Laws. |
Services | means the list of services and products set out in Section 2 of this Agreement. |
Terms of Service | means the Terms of Service entered into with OKX when you registered with OKX as amended from time to time. |
UAE | means the United Arab Emirates. |
VARA | means the Dubai Virtual Asset Regulatory Authority. |
VARA Rules | means the rules and regulations of the VARA as amended from time to time. |
Virtual Asset | means any digital representation of value expressed as a cryptocurrency or stablecoin that we make available for trading on the Platform. |
Website | means the OKX website which can be accessed on https://www.okx.com/. |
Schedule 2 – LTV Ratio
The LTV Ratio shall be calculated on a real time basis as follows:
(A / B) x 100
Where
A = the outstanding principal balance of the Loan expressed in USD based on the current market value of the Virtual Assets comprising the Loan
B = the current market value of the Collateral expressed in USD based on the current market value of the Virtual Assets comprising the Loan
Schedule 3 – Liquidation Ratio
The Liquidation Ratio shall be calculated on a real time basis as follows:
(A x DR – B x MMR – LF) / A
Where
A = the current market value of the Collateral expressed in USD based on the current market value of the Virtual Assets comprising the Loan
DR = the Discount Rate applicable to you based on the total Collateral posted with OKX. The Discount Rates are set out publicly on: OKX Discount Rates
B = the current market value of the Loan expressed in USD based on the current market value of the Virtual Assets comprising the Loan
MMR = the Maintenance Margin Rate applicable to you based on the total value of your loan. The MMRs are set out publicly on: OKX MMR
LF = the Liquidation Fee charged by OKX as updated from time to time.