Cross-Currency Margin Liquidation in Unified Trading Account

Last updated: 10/10/2026 04:05:32

In the Unified Trading Account (UTA) cross-currency margin mode, the system continuously monitors the account's risk rate and takes corresponding risk control measures based on the account's risk level.

As the account's risk rate increases, the system will progressively take measures including risk alerts, order cancellation, auto Conversion, and debt repayment. If the account's risk level still meets the liquidation conditions after these measures are completed, the account will enter the contract liquidation process.

The account risk ratio is a risk indicator that reflects the risk level of all assets and positions in the Unified Trading Account.

Account Risk Ratio = (Maintenance Margin + Liquidation Fees) ÷ Adjusted Equity
- Maintenance Margin = ∑ (Maintenance Margin for Each Asset in Cross Margin Positions × USD Index Price)
- Adjusted Equity = ∑ (Positive Equity of Collateral Currencies × USD Index Price × Discount Rate) + ∑ (Negative Equity of Collateral Currencies × USD Index Price) − Discount Losses from Spot and Margin Orders − Estimated Fees for All Open Cross-Margin Orders

1. Risk Alert

When the account risk ratio reaches or exceeds 80%, the system will send a risk alert notification to the user.

When the account risk ratio reaches or exceeds 90%, the system will send a auto Conversion alert. If the account risk ratio continues to increase, the system may perform auto Conversion of the collateral assets in the account and use the converted assets to repay the account's outstanding liabilities.

Users can reduce their account risk by adding margin, repaying liabilities, reducing positions, or canceling open orders.

2. Order Cancellation

When the account risk ratio reaches or exceeds 100%, the system will cancel spot, margin, and non-Reduce-Only contract orders to reduce the potential impact of unfilled orders on the account's risk level.

Reduce-Only orders do not increase position risk and are therefore not the primary target at this stage. At this point, certain account operations will be restricted until the account risk ratio falls below 80%.

Restricted operations: Asset transfers, increasing or opening contract positions, placing margin borrowing orders, and borrowing assets.

3. Auto Conversion and Debt Repayment

If the account risk ratio remains at or above 100% after order cancellation, the system will perform auto conversion and debt repayment based on the account's assets and liabilities. The system aims to reduce the account risk ratio to 80%.

Auto conversion applies when the account has positive-equity collateral assets and outstanding liabilities.

3.1 Positive Equity and Negative Equity

Assets in the account can be categorized based on their net equity:

Positive Equity Currencies: Assets with positive equity in the account that can be used as margin.
Negative Equity Currencies: Assets with negative equity that represent outstanding liabilities to be repaid.

For example:

Currency	Account Equity	Type
BTC	+1 BTC	Positive Equity Asset
ETH	+5 ETH	Positive Equity Asset
USDT	-20,000 USDT	Liability Asset

At this point, BTC and ETH can be used as assets to be converted, while USDT is the currency used to repay the outstanding liability.

3.2 Auto conversion

When Auto-Borrow is disabled and unrealized losses from contract positions result in an account liability, the system will trigger the automatic currency conversion mechanism by selling the collateral assets in the account to repay the liability. Non-collateral assets will not be sold.If significant unrealized losses cause the user's account equity to become negative, the system will directly convert all collateral assets into the currency of the outstanding liability.

Conversion and Deduction Rules

Deduction Priority: The system will prioritize currencies with higher liquidity and higher collateral allocation limits for conversion.

Liquidation Penalty:

During the conversion process, both the liability currency and collateral currencies will be subject to a liquidation penalty.
The penalty rate is determined based on the tier corresponding to the Tiered Collateral Value (USD) of the outstanding liability or converted collateral asset.
If the remaining collateral in the account is insufficient to cover the full penalty, the system will only deduct the maximum available amount without charging more than the remaining collateral. The subsequent contract liquidation process will then be triggered.

Calculation Example

Assume the liquidation penalty tiers for each currency are as follows:

XRP Liquidation Penalty Tiers: 0–$10,000: 2% | $10,000–$100,000: 3% | $100,000–$1,000,000: 4%
BTC Liquidation Penalty Tiers: 0–$2,000: 2% | $2,000–$20,000: 2.5% | $20,000–$1,000,000: 3%
ETH Liquidation Penalty Tiers: 0–$10,000: 2.5% | $10,000–$100,000: 3% | $100,000–$1,000,000: 3.5%

Scenario:

Outstanding Liability: 12,000 XRP (assuming an index price of 1 USDT, with a total value of $12,000 USD)
Available Collateral:
- BTC: 30 BTC (assuming an index price of 100 USDT, with a total value of $3,000 USD, subject to the 2.5% penalty tier)
- ETH: 920 ETH (assuming an index price of 10 USDT, with a total value of $9,200 USD, subject to the 2.5% penalty tier)

Process and Calculation:

Asset Deduction Order and Combination: Based on the collateral discount rate ranking, the system needs to raise $12,000 USD in conversion value:
- First, all 30 BTC are sold (value: $3,000 USD).
- Then, 900 ETH are sold (value: $9,000 USD).
- The total conversion value is = $3,000 USD (BTC) + $9,000 USD (ETH) = $12,000 USD.
Liquidation Penalty Calculation:
- BTC Penalty: $3,000 × 2.5% = $75
- ETH Penalty: $9,000 × 2.5% = $225
- XRP Liability Penalty: $12,000 × 3% = $360
- Total Theoretical Penalty = $75 + $225 + $360 = $660

Actual Deduction and Liquidation Trigger: After deducting 900 ETH, the account has only 20 ETH remaining, with a value of $200 USD. As the remaining collateral is insufficient to cover the $660 USD theoretical penalty, the system will only deduct the maximum available amount of $200 USD (that is, the remaining 20 ETH will be fully deducted). The account will then enter the subsequent contract liquidation process.

4. Auto Conversion Fees

Auto conversion may be subject to the applicable Conversion Penalty Rate.

For example:

If the convertible value of BTC is 20,000 USDT and the Conversion Penalty Rate is 1%, the actual conversion value after deducting the conversion penalty is 20,000 × (1 − 1%) = 19,800 USDT.

This means that the actual value available for repaying liabilities is 19,800 USDT. The specific Conversion Penalty Rates and applicable rules are subject to the latest rules published by the platform.

5. Risk Handling After Auto Conversion

After auto conversion and debt repayment are completed, the system will recalculate the account risk ratio.

If the account risk ratio falls below the 80% safety threshold, subsequent liquidation procedures will be terminated.
If the account risk ratio remains at or above 100%, the system will cancel Reduce-Only contract orders and initiate the contract liquidation process.

If the account has liabilities arising from over-the-counter (OTC) lending, such liabilities will be handled in accordance with the risk control and repayment rules applicable to the relevant lending service.

Futures Liquidation Process Part

1. Liquidation Trigger

Once liquidation is triggered, the system will temporarily restrict contract-related account operations, including placing orders, canceling orders, and transferring funds in or out of the account.

If the account equity is ≤ 0, the system will skip the regular liquidation process, cancel all contract orders in the account, and directly take over the remaining positions.

2. Takeover Risk Assessment

After liquidation is triggered, the system will further assess the account's Margin Ratio:

When the Account Margin Ratio ≥ 160%, or the Account Margin Ratio is < 0, the system will cancel all contract orders in the account and directly take over the remaining positions.
When the Account Margin Ratio < 160%, the account will enter the regular liquidation process.

3. Regular Liquidation

For accounts entering the regular liquidation process:

The system will cancel Reduce-Only orders for the relevant contracts.
For contracts with a Risk Limit Tier of Tier 1, the positions will be directly taken over by the liquidation engine.
For contracts with multiple Risk Limit Tiers, the system will reduce account risk by lowering the Risk Limit Tier step by step and partially reducing positions.

The system will determine the position reduction priority based on the maintenance margin requirements of each contract. When multiple contracts have the same maintenance margin requirement, the system will further consider contract liquidity when determining the reduction priority.

4. Calculate the Required Maintenance Margin Release

The system will calculate the amount of maintenance margin that needs to be released based on the account's current risk level, so that the user's positions can be reduced to a safe risk level.

If the account's equity is expected to fall below 0 after the estimated position reduction, the system will stop the regular step-by-step position reduction process and directly take over the remaining positions.

5. Liquidation Orders

During the liquidation process, the system will use IOC (Immediate-or-Cancel) orders to execute position reductions.

When multiple contracts require position reductions simultaneously, the system may execute liquidation orders for multiple contracts at the same time and continue the process based on the actual execution results.

Price for Closing Long Positions:

max (Mark Price × (1 − MMR of the Lowest Tier), Bankruptcy Price After Fees, Minimum Sell Price)

Price for Closing Short Positions:

min (Mark Price × (1 + MMR of the Lowest Tier), Bankruptcy Price After Fees, Maximum Buy Price)

Quantity of Each Liquidation Order:

min (Maximum Order Quantity for a Single Market Order × Maximum Market Order Quantity Ratio, Remaining Position Reduction Quantity)

6. When Does Liquidation End?

After each liquidation round, the system will assess the Account Margin Ratio to determine whether further liquidation is required.

Case 1: Account Risk Has Been Restored

If the Account Margin Ratio falls below 100% after Reduce-Only orders are canceled, the system will terminate the liquidation process.

For accounts that have already entered the liquidation order-splitting process, the system will use an 80% safe Margin Ratio as the risk control target:

If the Account Margin Ratio is ≤ 80% after the first liquidation order-splitting round, the liquidation process will be terminated.
If the Account Margin Ratio is ≤ 80% after the second liquidation order-splitting round, the liquidation process will be terminated.

Case 2: The Account Remains at Liquidation Risk

If the Account Margin Ratio remains within:

100% ≤ Account Margin Ratio < 160%

the system will continue the liquidation process until the account risk returns to a safe range or the conditions for position takeover are met.

7. When Will Positions Be Directly Taken Over?

Under any of the following circumstances, the system will terminate the regular liquidation process, and the liquidation engine will directly take over the remaining positions:

Account equity is ≤ 0.
Account Margin Ratio is ≥ 160%.
Account Margin Ratio is < 0.
The Risk Limit Tier of all open positions has been reduced to Tier 1, but the Account Margin Ratio remains ≥ 100%.
The account can no longer restore its Margin Ratio to the safe range through further Risk Limit Tier reductions and position reductions.

Once the positions are taken over, they will enter the subsequent liquidation and settlement process.