Risks Associated With Margin Trading on Figure Markets Exchange

Figure Markets Exchange Members (“Member”, “Members”, “they”, “their”, “themselves”) use the trading platform operated by Figure Markets (“Exchange”) at their own risk. There can be no assurance that use of the Exchange will provide a positive return or profit, that significant losses will not be incurred, or that a member’s objectives will be achieved. Note, the Exchange is not providing any leverage to any Member. Members should only use loan proceeds for commercial purposes.

Leverage allows trading in certain cryptocurrencies or digital assets with limited margin in relation to the value of the digital assets in your wallet/account. The result of this is that even a slight fluctuation of the price of the leveraged cryptocurrency or digital asset could mean substantial gains on leveraged positions when these fluctuations are in your favor but could also mean sudden loss of the allocated margin, and potentially all of the assets in your account, if the fluctuations are to your detriment.

If a Member decides to use margin on the Exchange it is important to have sufficient relevant experience when entering into these transactions. Margin trading using cryptocurrencies or digital assets is not suitable for everyone. A Member should only fund their wallet and trade with digital assets that they own and can afford to lose. It is possible that a Member may lose a substantial proportion or all of their capital. As a result, Members should carefully consider whether they can afford to bear the risks of loss involved in using margin. The Exchange’s margin trading is designed so that the maximum risk associated for any Member with respect to a position on the Exchange shall not exceed the total actual amount of digital assets in the Member’s wallet/account (by way of fees, funding, margin and/or premium). Members who owe funds after the assets in their account have been liquidated may be blocked from trading until their debts are repaid. A Member may have a single net position in any given cryptocurrency or digital asset at any time. If a position is liquidated, then the digital assets allocated to that position as margin will be lost, up to the entire amount of the Member’s Account balance.

Under certain market conditions, particularly given the high volatility and substantial risk of illiquidity in digital asset markets, a Member may find it difficult or impossible to close a position in the market at a favorable price. For example, if there is insufficient liquidity in the market or technical issues with the trade orders that a Member attempts to place, a Member may not be able to manage the risk on their positions. Placing contingent trade orders, such as “Stop” order types, will not necessarily limit a Member’s losses to the intended amounts, since these order types are not guaranteed and market conditions may make it impossible to execute such orders. The use of leverage can work against a Member as well as for a Member and can lead to large losses as well as gains. The conduct of all trading in a Member’s wallet/account is at a Member’s own risk and Figure Markets does not take any responsibility for any loss or damage incurred as a result of a Member’s use of the Exchange or any Member’s failure to understand the risks involved in digital assets markets generally or a Member’s use of the Exchange. Additionally, Figure Markets may not accept any orders at its discretion, if it determines a Member is or may be abusing the use of margin trading in their account or violating another Exchange rule or any applicable user agreement.

Trade Orders are not monitored by Figure Markets to ensure a Member’s transaction is appropriate for a Member’s risk. Essentially, members must make their own independent assessment as to what level of risk is appropriate for themselves. Members must be able to manage their overall risk appetite.

MEMBERS OF FIGURE MARKETS EXCHANGE MUST ENSURE THAT THEY ARE ABLE TO MONITOR THEIR ACCOUNT AT ALL TIMES. FIGURE MARKETS EXCHANGE IS NOT RESPONSIBLE FOR MONITORING ANY ORDERS OR POSITIONS ON, OR ANY OTHER ASPECT OF, A MEMBER’S WALLET/ACCOUNT.

SPECIFIC TO RESIDENTS IN THE UNITED STATES Members must certify as Eligible Contract Participants (“ECP”) to be eligible for margin trading. Members are required to have more than $10 million in assets invested on a discretionary basis. The $10 million in assets do not include a Member’s personal residence or other assets that the Member owns that are not part of a Member’s trading or investment portfolio. If you have any questions about whether you qualify as an ECP, you should consult your legal advisor. Figure Markets ensures that a Member’s self-certification will be subject to review. If in Figure Markets’s due diligence we require more information from a Member to verify their status as an ECP, Figure Markets will email that Member with further questions.