Margin Trading Rules

1. General

1.1 These rules are formulated to regulate digital asset borrowing and margin trading activities, maintain market order, and protect the legitimate rights and interests of investors, based on the principles of fairness, transparency, and impartiality.

1.2 These rules apply to all borrowing and margin trading activities conducted on this platform. For matters not covered herein, the FameEX Terms of Service and other relevant platform policies shall apply.

2. Borrowing Rules

The maximum margin borrowing amount refers to the upper borrowing limit for a specific cryptocurrency under the corresponding margin trading pair. The platform calculates this limit based on the user's allowable margin level and risk control policies.

Calculation formula for Maximum Borrowing Amount:

Maximum Borrowing Amount = (Total Account Assets - Outstanding Borrowed Assets - Accrued Interest) × (Maximum Margin Leverage - 1) - Outstanding Borrowed Assets

3. Rules for Interest Rates, Interest Calculation, and Repayment

3.1 Assets in a user's margin account serve as collateral for margin trading on the FameEX platform.

3.2 Interest is calculated based on an hourly rate. Interest accrues from the actual borrowing time and is charged at the time of borrowing and subsequently every hour on the hour (natural hours). A partial hour will be counted as a full hour if it extends into the next one.

Interest formula: 

Interest = Borrowed Principal × Hourly Interest Rate × Borrowing Duration (in hours)

3.3 Prolonged unpaid borrowed funds and interest may cause the account's risk ratio to fall below the liquidation threshold, triggering forced liquidation. Users are strongly advised to proactively repay borrowed funds and interest, or maintain sufficient collateral in the margin account.

3.4 Repayment Rules: Users may manually select which borrowed assets to repay, either partially or in full. Repayments follow a fixed priority: earliest borrowed amount first, followed by accrued interest, and then the principal. Interest is recalculated hourly based on the updated borrowed amount. Once both the principal and all accrued interest for a loan are fully repaid, the loan status will be marked as “Repaid,” and no further interest will accrue on that order.

Repayment must follow the “borrow one, repay one” rule. This means users must repay loans using the same trading coin borrowed under that specific margin pair. Sufficient balance in the corresponding asset is required at the time of repayment.

4. Margin Tiers

The margin tier reflects the user's current borrowed amount. Higher borrowing levels correspond to higher tiers and increased liquidation risk. If both the base currency and quote currency are borrowed under the same trading pair, the higher tier applies, and the corresponding liquidation risk rate will follow the higher borrowed amount.

5. Margin Account Withdrawal Rules

Withdrawals—whether of the base or quote currency—are only permitted if the remaining assets maintain a risk ratio of at least (Margin Leverage ÷ (Margin Leverage - 1)) × 100%. For example, with 5X margin, the post-withdrawal risk ratio must be no less than 125%.

If the calculated maximum withdrawable amount exceeds the available balance, the withdrawal will be limited to the available balance.

6. Risk Management

6.1 Collateral for margin borrowing is limited to the net assets of the specific trading pair within the user’s margin account. Assets from other trading pairs or accounts are not included.

6.2 The FameEX platform continuously monitors the risk ratio of users’ margin accounts and takes appropriate actions based on any changes.

Risk Ratio Formula:

Risk Ratio = (Total Assets - Unpaid Interest) ÷ Total Borrowed Assets × 100%

Total Assets = Total value of all assets in the margin account for that trading pair

Borrowed Assets = Sum of all borrowed and unpaid amounts

Unpaid Interest = Total borrowed × hourly interest rate × borrowing duration – interest already repaid

6.3 Margin Call: When the account's risk ratio reaches the margin call threshold of the current tier, a margin call is triggered. Notifications are sent via SMS and email. The system then initiates forced liquidation and automatically returns borrowed funds.

After a liquidation is triggered, the platform will restrict the user's trading and asset operations for the affected trading pair until the liquidation process is complete. All open orders under that trading pair will be canceled, and the system will automatically place orders to convert the user's held assets into the repayment currency to settle the outstanding debt.

6.4 Margin Call Liquidation: After liquidation, the system will charge a liquidation fee and deposit it into the Margin Risk Reserve Fund, which is used to offset losses resulting from margin account bankruptcies.

If liquidation results in a negative balance (i.e., the user still owes debts after liquidation), the deficit is covered by the platform’s reserve fund.

Outstanding Balance = Borrowed Amount + Accrued Interest – Assets Repaid

6.5 Liquidation Fee: When a user's account is liquidated and there are remaining assets in the margin account, 8% of the remaining assets will be charged as a liquidation fee and deposited into the Margin Risk Reserve Fund.

If both the base currency and the quote (trading) currency remain in the user's margin account, the fee will apply to both. If only one currency remains, the fee will apply solely to that currency.

Liquidation Fee Rules:

• If the quote currency ≥ the minimum trading amount, 8% of the remaining quote currency will be charged.
• If the quote currency ＜ the minimum trading amount, the entire remaining balance will be charged.
• If the base currency ≥ 5 USDT, 8% of the remaining base currency will be charged.
• If the base currency ＜ 5 USDT, the entire remaining balance will be charged.

6.6 Margin Risk Reserve Fund: After forced liquidation and full debt repayment, 8% of the user's remaining margin account assets will be collected as a liquidation fee and put into the platform’s Margin Risk Reserve Fund. Additionally, a portion of the interest paid by users when repaying borrowed funds will also be allocated to the reserve fund.

7. Supplementary Provisions

7.1 Users must sign the Margin Trading Agreement on the FameEX platform before engaging in any margin-related activities.

7.2 The platform provides information, monitoring, and risk control services for borrowing activities. However, it does not offer any guarantee of returns or principal protection for margin trading conducted on the FameEX platform. Investors should fully understand the high risks associated with margin trading, independently assess potential losses, and participate voluntarily only after confirming that the risks are manageable and acceptable.

7.3 These rules are established by the platform and become effective upon public announcement to all investors. Any future amendments will be announced and take effect in the same manner.

7.4 FameEX reserves the right to interpret these Margin Trading Rules.

7.5 These rules have been effective since October 12, 2020.