Account Liquidation

Liquidation Risk Alert

Websea actively monitors changes in margin account assets, continuously computes the risk rating, and prepares for potential liquidation orders. When a user's risk rating hits 150%, it triggers a warning in the user's account. Websea will then send both an SMS and email warning to the user.

Note: The threshold for this warning is subject to change based on the cryptocurrency being traded. Users are advised to refer to the latest data presented on the Websea platform.

Account Liquidation

Account liquidation is initiated when the risk rating of a user’s margin account reaches 110%. Upon triggering this process, Websea will send notification messages to the user via SMS and email.

Note: Similar to the risk alert, the risk rating threshold for account liquidation may vary depending on the cryptocurrency and market conditions.

Liquidation of Pending Orders

If a user's risk rating falls below 110%, indicating liquidation status, Websea will take several steps:

• Restricting Transactions: The user's ability to execute new trades is restricted.
• Cancellation of Pending Orders: Current pending orders are cancelled.
• System Liquidation Order: A liquidation order is placed by the system. This process prioritizes the selling of currencies with higher assets in the account at market price. The aim is to cover the loan assets and outstanding interest.
• Post-Liquidation: After the position closure, if the account's risk rate returns to a safe state, any remaining assets can be transferred out of the account.

Note: The specific procedures and thresholds for liquidation of pending orders are subject to change based on the cryptocurrency.

Remarks

(1) Isolated Margin Liquidation Order Price Calculation

• In principle, if a user's risk rating drops to 100%, the liquidation order price will be adjusted according to current market conditions.

(2) Repayment Amount in Negative Account Balance Situations:

• In cases of extreme market fluctuations, if the system's liquidation orders fail to fully cover the borrowed assets and interest, it results in a position overrun. When an account slips into a negative balance, the liquidation account automatically compensates with some assets. Additionally, Websea maintains a risk reserve fund to prevent additional losses for users. Any negative balance is covered by this fund.