Our loan margin process is broken down into a three tier risk management system.
At 65% LTV, you will receive an email notification stating that your loan is approaching margin territory and we strongly recommend taking action to prevent your loan from entering a margin call or default in the event of continued market volatility. We recommend keeping your LTV as close to 50% as possible because price movements can occur rapidly. We also encourage keeping assets in your BlockFi Wallet which can be quickly added to your loan if necessary.
At 70% LTV, your loan enters a Margin Call. At this stage, action is required to restore your loan to below 70% LTV. Upon reaching the margin threshold, you now are granted 72 hours to cure your margin and bring your LTV ratio back to a healthy level. If your LTV falls below 70% and re-enters this threshold, the timeframe given will reset. However, if the price of the underlying asset (the collateral given) continues to decrease, you may reach the liquidation trigger (80% or above). If your margin is not cured within 72 hours or if the LTV reaches 80% or more (even within the 72 hours of cure period), we may liquidate, at our sole discretion, a portion of your collateral to bring down your loan LTV to a healthy level. Please note that all liquidations are final, and details surrounding any such transaction will be provided within 24 hours via email.
- The fastest way to cure your margin is by sending additional collateral to your loan account immediately in order to prevent a potential liquidation. This is the only method BlockFi recommends.
- 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- Any assets in your BlockFi Account cannot be withdrawn if your Loan LTV is above 70%.
At 80% LTV or above, you receive a final notice indicating that your loan has defaulted. At this stage, in accordance with your Loan and Security Agreement, BlockFi reserves the right to initiate the sale of your collateral to restore your LTV to a healthy level.
- BlockFi may initiate a sale, at our sole discretion, of your collateral to restore your LTV to a healthy level.
- All liquidations are final and details surrounding any such transaction will be provided within 24 hours via email and you will see your Dashboard update accordingly.
- 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.
- To be clear, if 80% LTV or above is reached at any point, BlockFi will liquidate, at our sole discretion, a portion of your collateral to bring your LTV to a healthy level.