Crypto Credit Service Agreement
Effective Date: March 14, 2024
1. Acknowledgment and Acceptance of Terms
This agreement applies to all users who engage in lending transactions through the Phemex Platform ("Phemex"). This agreement is intended to clarify the rights, obligations, and responsibilities of both borrowers and lenders （“account holder”）when using the services of Phemex. Users should read the entire content of this agreement carefully before registering as users of Phemex and enableing it’s borrower/lender account.
By engaging with the crypto credit services of Phemex, you hereby affirm that you have thoroughly reviewed, comprehend, and consent to be bound by the entirety of the terms and conditions set forth within the Phemex Crypto Load Service Agreement. Should you not fully grasp or agree to these terms, you should not use any of the Crypto Credit Services offered.
2. Scope
2.1. These provisions are binding upon all parties who access or utilize the Crypto Credit Services provided by Phemex.
2.2. This Agreement is a supplement to the Phemex Terms of Use, and the Terms and Conditions (collectively the “Terms”)all provisions outlined in the User Agreement shall continue to apply. In the event of any conflict or inconsistency between the terms of this Agreement and those of the User Agreement, the terms of this Agreement shall prevail, unless expressly stated otherwise.
3. Eligibility
3.1. In order to access and use the Crypto Credit Services, you must satisfy the eligibility criteria outlined in the Terms and/or on the Phemex trading platform from time to time.
3.2. We may change our eligibility criteria for the use of Crypto Credit Services at any time, including by introducing additional requirements.
3.3. If you no longer meet our eligibility criteria for using the Crypto Credit Services at any time after you have accessed or used the services (including because of a change to your circumstances or our eligibility criteria), you must notify us promptly, and we may suspend or terminate your ability to access or use the Crypto Credit services.
3.4. You hereby represent and warrant to Phemex that you will notify us of any change in your circumstances which may affect your ability to meet the eligibility criteria.
4. Crypto Credit Services
4.1. You represent and warrant on a continuous basis that: (a) you have the requisite authorization and permission to utilize the Crypto Credit services; (b) these Crypto Credit service terms constitute legal, valid, and binding obligations enforceable against you in accordance with their respective terms; and (c) the engagement with the Crypto Credit Services and the provision of such services to you do not violate any laws or regulations applicable to you. You covenant to promptly notify Phemex of any change in legislation or circumstance that might render this representation and warranty inaccurate or questionable. You further agree to indemnify the service provider upon demand for any and all losses, liabilities, and costs incurred as a result of any breach of this representation and warranty or your failure to notify Phemex of relevant changes in accordance with this clause.
4.2. By borrowing digital assets pursuant to the Terms and this agreement, you, as the lender, enter into a Credit Service Agreement with the lender who reviewed your profile listed on Phemex and decided to lend you digital assets. You consent to and acknowledge the right of Phemex to enforce the terms of the Credit Service Agreement on behalf of the lender against you under Terms and this Agreement.
4.3. By lending digital assets pursuant to the Terms and this Agreement, you, as the lender, enter into a Credit Services Agreement with the borrower who has reviewed your profile listed on Phemex and decided to borrow digital assets from you. You consent to and acknowledge the right of Phemex to enforce the terms of the Credit Services Agreement on behalf of you against the borrower under the Terms and this Agreement. As the lender, you agree to supply a certain amount of digital assets for lending to Phemex and authorize Phemex to list these assets for application by borrowers and to recommend to you screened borrower information.
4.4. Phemex reserve the right to suspend or discontinue the provision of the Crypto Credit Services Agreement in respect of any digital asset and/or to users situated in any jurisdiction, either in whole or in part, at any time and for any reason at our sole discretion. In such circumstances, Phemex may, without incurring any liability to you, reduce, cancel, or otherwise modify any loan. Should such action be taken, notice shall be provided to you except in exigent circumstances where Phemex may be compelled to suspend or discontinue the Crypto Credit Services in order to comply with legal requirements, regulatory or law enforcement directives, or internal policies, in which case such suspension or discontinuance may be immediate.
BORROWER ACCOUNT SERVICE
5. Crypto Loan Services
5.1. You shall bear sole responsibility for all risks associated with the use of the Crypto Credit Services. The service provider expressly disclaims any liability for losses or damages that may arise from your access to and use of the Crypto Credit Services.
5.2. You are obligated to deposit and maintain eligible collateral in the collateral account in such form and amounts, and at such times as Phemex may, in its sole and absolute discretion, require on behalf of the lender. This requirement may exceed the Collateral Requirements imposed by any governmental or self-regulatory organization in any jurisdiction (including any exchange) which you and/or Phemex is required to maintain.
5.3. Phemex shall determine the list of eligible collateral, and certain digital assets may be deemed acceptable as collateral only at a discounted value. Phemex may, but is not obliged to, inform you of any amendments to the list of eligible collateral or to the discounts applicable to the valuation thereof before such changes come into effect.
5.4. The valuation of any collateral shall be determined by Phemex in its sole and absolute discretion.
5.5. Phemex may establish and amend collateral requirements for the Crypto Credit Services, including by setting Loan-to-Value (LTV) ratios that you must maintain (the “Collateral Requirements”). Phemex may, at its sole and absolute discretion, vary the Collateral Requirements at any time and by any amount, with or without notice to you, and may stipulate that such requirements apply to both existing and new loans. You acknowledge that in certain market conditions, Phemex may effect an immediate change in Collateral Requirements and/or demand additional collateral to be deposited promptly within a specified timeframe, which may be less than 24 hours. You waives any right to contest such demands on the grounds of unreasonableness.
5.6. Should Phemex determine that additional collateral is necessary, you are required to provide such additional collateral forthwith upon the Phemex’s demand. Notwithstanding any such demand, Phemex may at any time exercise its rights under Section 11 (Default and Termination) of this Agreement.
5.7. You acknowledge that collateral may be retained and utilized by Phemex to secure the performance of your obligations under these Crypto Credit Service Terms and the overarching Terms of Service. All collateral shall be held by Phemex as a continuing security interest and shall be subject to Phemex’s general right of set-off for any and all obligations, liabilities, monies, or amounts whatsoever at any time now or hereinafter owing, due, incurred or payable by you to the lender under these Crypto Credit Service Terms, the overarching Terms of Service, or otherwise.
5.8. At the Phemex's request, you shall, at your own expense, perform all necessary deeds, acts, and things required by Phemex to perfect lender’s rights to the collateral provided by you under these Crypto Credit Service Terms.
5.9. Subject to the Terms, Phemex may, in its sole discretion, allow you to open sub-accounts for the purposes of utilizing the Crypto Credit Services.
6. Loans and Repayment
6.1. When applying for a loan, you shall specify the digital asset you wish to borrow and the digital asset you wish to provide as collateral for the loan. You shall also elect the term of the loan.
6.2. Provided that you satisfy all the eligibility criteria as determined by Phemex and you have sufficient eligible collateral available in your Phemex account, you may list your profile on Phemex to apply for a loan. If a lender agrees to grant you a loan, the loaned assets will be transferred to your Phemex account.
6.3. Phemex may attach conditions to the use of any particular loanable asset or eligible collateral, including but not limited to specifying a minimum and maximum amount that a particular asset may be loaned.
6.4. Phemex may determine which digital assets constitute loanable assets and eligible collateral at its sole discretion. If Phemex determines that a digital asset no longer qualifies as eligible collateral or loanable asset, we may terminate all relevant loans prior to maturity and initiate liquidation without any liability to you.
6.5. If you fail to repay a loan by the time it becomes due, interest will accrue at 2 times the principal of the loan until it is fully repaid. Specifically, starting from the time when the loan becomes overdue, the hourly interest = outstanding principal × 2 × daily interest rate ÷ 24.
6.6. You may repay a loan in whole or in part at any time prior to maturity without incurring any additional fees or penalties for such early repayment.
6.7. If your loan-to-value (LTV) ratio has reached the value outlined by Phemex, your collateral will immediately be subject to liquidation, and you will be liable to pay the liquidation fee in addition to any additional fees and costs associated with the liquidation. LTV = (the value of the principal in USDT + the value of the accrued interest in USDT) ÷ the value of the collateral in USDT.
6.8. All repayments shall be allocated first to Phemex’s service fees (if any), then to interest and last to the principal amount of the loan.
7. Collateral
7.1. Upon initiating a Loan, the corresponding amount of eligible collateral will be automatically moved from your spot account to a dedicated collateral account (the "Collateral Account"). You are required to maintain a collateral balance that is adequate to meet any Collateral Requirements that Phemex may stipulate from time to time.
7.2. Should the Loan to Value (LTV) ratio for a Loan at any point not satisfy the Collateral Requirements set by Phemex, you are obliged to deposit additional eligible collateral into the Collateral Account, irrespective of whether Phemex has issued a Margin Call to fulfill these requirements.
7.3. Phemex may provide a feature on the Platform that allows for an "auto top-up" function, which will automatically transfer eligible digital assets from your spot account to the Collateral Account if the LTV for a Loan drops below the Margin Call LTV. By enabling this function, you understand and agree that it does not compel Phemex to make a Margin Call, and it does not ensure that the transfer of Collateral will occur in time, or be enough to prevent Liquidation.
7.4. You acknowledge and agree that if the LTV for a Loan reaches or falls below the Liquidation LTV, Phemex is authorized and entitled (but not required) to sell or dispose, on behalf of the Lender, of any or all of the Collateral to satisfy the LTV as determined by Phemex at its sole discretion, regardless of whether a Margin Call has been issued ("Liquidation"). Phemex is not obligated to notify you prior to initiating Liquidation.
7.5. You grant Phemex the authority and discretion to sell or dispose of any or all Collateral as Phemex sees fit in its sole discretion.
7.6. In the event of any Liquidation, you will incur a Service fee for liquidation, which is a percentage of the value of the assets liquidated (the "Liquidation Fee"), as set by Phemex in its sole discretion. The Liquidation Fee Rate is currently 2%, though Phemex reserves the right to modify this rate and the method of its calculation at any time at its sole discretion.
7.7. You further acknowledge and agree that (i) you are responsible for all trading fees and transaction costs associated with the Liquidation, (ii) you are liable for any losses incurred during the Liquidation, and (iii) Phemex will not be liable for any losses you suffer as a result of the Liquidation should Phemex exercise any or all of its rights under these Terms and/or the lender’s authorization.
7.8. Phemex's failure to exercise any or all of its rights under this section shall not be deemed a waiver of its rights to do so at a later time, nor shall Phemex be liable to you for any actions taken or not taken.
7.9. It is your responsibility to monitor the Collateral Requirements for your Loans. Both your Collateral Balance and Loan Balance will be marked-to-market every minute, or at such other intervals as Phemex may decide in its sole and absolute discretion.
7.10. Phemex may (but is not required to) issue Margin Calls to you regarding any of your Loans, whether verbally, in writing, or in any other manner deemed appropriate by Phemex. Furthermore, you agree that Phemex may contact you via any telephone numbers you have provided to Phemex for the purpose of Margin Calls.
7.11. If the proceeds from Liquidation are not enough to cover your Loan Balance, you are responsible for the deficit, and the amount is immediately due and payable to the lender and/or Phemex.
7.12. You understand and agree that, as Digital Asset markets operate 24/7, Margin Calls and Liquidations can happen at any time, including outside normal business hours. You also acknowledge the volatile nature of Digital Asset prices, which can rapidly decrease in value.
LENDER ACCOUNT SERVICE
8. Crypto lending Services
8.1. As the lender, you confirm that you have understood and accepted that in the event of a borrower's default, Phemex will take appropriate measures to protect your benefits in accordance with the provisions of Terms and this Agreement. Moreover, you agree that Phemex has the right to review the qualifications of borrowers according to our own risk management and compliance requirements and to recommend your lending funds only to those borrowers who meet its criteria.
8.2. You acknowledge that once your lending funds are accepted by one or more borrowers, a lending relationship is established between you and the borrower(s), and you will provide the funds to the borrower(s) in accordance with the terms of the Credit Services Agreement, accepting that Phemex may exercise the rights and obligations of the Credit Services Agreement on your behalf when necessary.
8.3. You further confirm that you understand and agree that the lending funds you provide will be disbursed to the borrower(s) under the terms of the Credit Services Agreement, including but not limited to interest rates, loan duration, and repayment methods. You acknowledge that you have fully understood and accepted the risks associated with your lending funds, including but not limited to the risk of borrower default, and agree to manage these risks according to the regulations and operations of Phemex.
9. Declaration and Disclaimer
9.1.Declaration of Assurance on the Legality of Fund Sources.
a.You hereby represent and warrant that all lending activities conducted on Phemex shall be with funds of lawful origin. You shall ensure the legality of their funds, including, but not limited to, the sources and the process of appreciation being in compliance with applicable laws and regulations.
b.You acknowledge and agree that Phemex reserves the right to request proof of the lawful origin of funds and may suspend or terminate your access rights in the event that you fail to provide satisfactory evidence thereof, until such time as reasonable proof is furnished.
c.You acknowledge that in the event the illegality of the funds causes losses to Phemex or any third party, you shall indemnify and hold harmless against all such losses and bear the corresponding legal liabilities.
9.2.Disclaimer of Guaranteed Returns
a.You fully understand and agree that all lending activities made through Phemex carry inherent risks, and Phemex makes no warranties or representations of any kind as to the interests or returns on such lending activities.
b.Past credit services performance displayed on Phemex is not indicative of future results. The interests of crypto credit products may fluctuate, and you shall bear the risk of any lending losses.
c.You acknowledge that any crypto credit information provided by Phemex is for reference only and does not constitute investment advice. You shall make lending decisions based on your own judgment and shall assume full responsibility for such decisions.
9.3.Disclaimer of Technical Neutrality
a.Phemex provides only technical services such as the display of crypto credit information and the facilitation of crypto credit transactions, and shall not be liable for any crypto credit activities conducted by you through Phemex.
b.You understand and agree that Phemex does not participate in the making of lending decisions and shall not bear any liability for the outcomes of such lending activities. You shall independently assess the authenticity, legality, and appropriateness of the relevant lending activities and bear all risks associated with such crypto lending activities.
c.To the maximum extent permitted by law, Phemex shall not be liable for any losses resulting from technical failures, network issues, defects in third-party services, or other factors beyond the control of Phemex.
10. Interest
10.1. Simple interest shall accrue with respect to any loan on an hourly basis at the start of each hour (e.g., 1:00 PM, 3:00 PM, etc.) Time periods of less than one hour shall be counted as one hour. Interest with respect to any loan shall be calculated hourly as follows: interest = outstanding principal × daily interest rate ÷ 24.
10.2. Phemex reserves the right to modify the rates of fees, commissions, and charges, or impose other fees, commissions, and charges at its sole discretion.
11. Default and Termination
11.1.A default shall be deemed to occur in the event that:
a.Any payment or repayment in connection with any loan becomes overdue.
b.The collateral balance falls below the Collateral Requirements as outlined by Phemex.
c.Any representation, warranty, or undertaking made by you to Phemex becomes untrue, inaccurate, incomplete, or misleading, where you fail to inform Phemex as soon as reasonably possible.
d.You fail to comply with the terms of this Agreement or perform any of your obligations under this Agreement.
e.You have been found to be in breach or are being investigated by relevant authorities for being in breach of any applicable laws and regulations.
f.You fail to promptly provide Phemex with verification of your identity or the identity of any person entrusted by you to act on your behalf.
11.2.If a default occurs, Phemex may immediately take any or all of the following actions:
a.Suspend (indefinitely or otherwise), cancel, or terminate any Phemex account, or prohibit you from using Phemex services.
b.Liquidate or close any outstanding transaction. Phemex may determine the value of such position as soon as possible from the date of the closure at its absolute discretion.
c.Modify the applicable Collateral Requirements or sell the collateral and use the proceeds to meet your obligations.
d.Exercise any other authority or power that we deem appropriate.
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