Our loan margin process is broken down into a three tier risk management system.
At a 65% LTV, you would get an email notification stating that your loan is approaching margin territory and we recommend action (but not required).
At a 70% LTV, you would enter a Margin Call. From there, you have 72 hours to cure your margin. If your margin is not cured within 72 hours or your loan hits an 80% LTV, we will sell a portion of your collateral to bring your LTV back down to a healthy level.
- The fastest way to cure your margin is by sending additional collateral to your loan account immediately in order to prevent a potential liquidation.
- You may also pay down a portion of your loan balance, however cash moves much slower than crypto and we can only take actions based on the assets we have on the platform (ACH Payments to Scratch take 3-5 business days).
- Any assets in your Interest Account cannot be withdrawn if your Loan LTV is above 70%.
At an 80% LTV, you get another email notification stating your loan in in Default and subject to immediate liquidation.
- In accordance with your Loan and Security Agreement, your loan would enter Default and BlockFi reserves the right to initiate a sale of your collateral to restore your LTV to a healthy level.
- If your collateral has already been sold, the details of the sale will be made available within the next 12-24 business hours and you will then see your Dashboard update accordingly.
- Default Liquidations are not something we actively wish to do and would take as many steps as possible to avoid this if possible.
- BlockFi utilizes a variety of liquidity providers to execute these transactions in order to capture the best available price for our clients, which may vary from prices listed on public exchanges due to market conditions and volatility.