Glossary of Crypto-Backed Loan Terms – Figure Markets

This content is for informational purposes only and does not constitute financial advice.

Welcome to your comprehensive guide to understanding your Figure Crypto-Backed Loan. We’ve broken down our most common terms by category so you can easily find exactly what you need.

1. Loan Fundamentals & Application

Adverse Action Notice (AAN): A formal notice provided if your loan application is declined. It outlines the specific reason for the decision, such as an active bankruptcy, insufficient collateral, or an inability to verify identity.
Annual Percentage Rate (APR): The total annual cost of borrowing, expressed as a percentage. This figure provides a complete view of the loan's cost by combining your fixed interest rate with any required upfront administrative fees.
Application Window: The 14-calendar-day period you have to fully complete your application and sign your loan agreements. If the application is not completed within this timeframe, it automatically expires.
Credit Check (Soft Pull): A background verification used to confirm your identity and check for recent bankruptcies. This is a "soft pull" and does not impact your credit score, nor are lending decisions based on your credit score.
Disbursement: The official release of your approved loan funds. Depending on your preference and loan type, funds are disbursed either as fiat currency (USD) to your linked bank account or as stablecoin (USDC) to your digital wallet.
Fiat Currency: Government-issued currency, such as the US Dollar (USD). This is typically the currency used when funds are sent to your traditional bank account or when you make ACH payments.
Interest-Only Loan: Our standard 12-month loan structure. You are only required to pay the accrued interest each month (unless you choose to defer it), with the core principal balance due at the end of the term.
KYC / AML / BSA: Know Your Customer, Anti-Money Laundering, and Bank Secrecy Act. These are standard regulatory procedures requiring you to provide personal information and a valid ID to verify your identity and protect your account from fraud.
Maturity Date: The final scheduled end date of your loan contract (typically 12 months). On this date, the entire remaining principal balance and any deferred interest must be paid in full to close the loan and release your collateral.
Mobile-Based Loan: A loan originated entirely via the Figure mobile app. These loans secure your collateral within a dedicated MPC wallet and generally feature faster disbursement timelines.
Origination LTV: Your starting Loan-to-Value ratio established when your loan is funded. Selecting a lower Origination LTV gives you a larger safety cushion against crypto price drops.
Principal: The core amount of money you borrowed, excluding any accrued interest, fees, or deferred charges.
Rollover: An option that allows eligible borrowers to renew or extend their loan for an additional term as they approach their Maturity Date.
USDC (USD Coin): A stablecoin cryptocurrency pegged 1:1 to the US Dollar. You may use USDC to receive your loan funds or make payments toward your balance.
Web-Based Loan: A loan originated via the Figure website. These loans utilize Anchorage Digital to hold your collateral, with disbursements processed via standard ACH or USDC.

2. Collateral & Custody

Collateral: The digital assets—such as Bitcoin (BTC), Ethereum (ETH), or Solana (SOL)—you pledge to secure your loan. While held safely in a custodial wallet during the loan, they legally remain under your ownership.
Collateral Deposit Window: The strict 3-calendar-day period immediately following the signing of your loan agreement. You must deposit your required collateral into the designated wallet within this window to initiate funding, or the application will be canceled.
Custodial Wallet: A highly secure digital wallet managed by a trusted institutional third party (like Anchorage Digital) or secured via MPC technology. Your collateral is held here and cannot be moved or traded until the loan is satisfied.
Loan-to-Value (LTV) Ratio: The ratio of your total outstanding loan balance compared to the current real-time market value of your crypto collateral, expressed as a percentage. (Example: A $5,000 loan balance secured by $10,000 worth of Bitcoin results in a 50% LTV).
Micro Deposit (Verification Deposit): An optional security feature allowing you to send a small fraction of your crypto to confirm it arrives at the correct wallet address before transferring the rest. This fractional amount counts toward your total required deposit.
MPC (Multi-Party Computation) Custody: An advanced security framework where private keys are split across multiple decentralized nodes, ensuring institutional-grade security for your collateral.
Rebalancing: A feature allowing you to withdraw a portion of your pledged collateral if the market value of your cryptocurrency significantly increases, giving you access to excess crypto while keeping your loan active.

3. Margin Calls & Liquidations

Margin Warning (Courtesy Notice): An initial, proactive alert sent when your LTV begins to rise due to market dips. This warns you that you are approaching a formal margin call so you can take preventative measures.
Margin Call (Short Level): A formal notification issued when declining crypto prices push your LTV into a high-risk threshold. It alerts you that immediate action is required to keep your position safe.
Cure Deadline: The exact date and time by which you must fully resolve an active Margin Call. If you miss this strict deadline, the system will initiate automatic liquidation.
Margin Cure: The specific action required to resolve an active margin call. You can "cure" your account by depositing additional crypto collateral or by making a cash payment toward your principal.
Liquidation Protection: An optional safeguard designed to shield your collateral from sudden market drawdowns. When enabled, it utilizes designated backup assets to automatically stabilize your account.
Liquidation Threshold (Liquidate LTV): The absolute maximum allowable LTV percentage set by the platform. If market volatility pushes your LTV past this strict limit, the system will automatically initiate liquidation.
Liquidation: The automated sale of pledged crypto collateral to satisfy your outstanding loan balance. This happens when your LTV exceeds safety limits or a Margin Call is not cured in time.
Partial Liquidation: A borrower-friendly safeguard where only the precise, minimum amount of collateral required to return your loan to a healthy LTV is sold, preserving as much of your original crypto as possible.

4. Payments & Fees

Capitalized Origination Fee: An administrative fee required to process the loan that is added directly into your total loan amount (or interest rate), meaning you don't have to pay cash out of pocket at closing.
Interest Deferral (Deferred Interest): A flexible repayment option allowing you to postpone your monthly interest payments until the end of your loan term, with no additional deferral fees.
Liquidation Execution Fee (Crypto Liquidation Fee): A processing fee (typically 2%, depending on your state) applied if the platform is forced to sell your crypto collateral due to a missed payment, un-cured margin call, or automatic liquidation.
Payment from Collateral: A payoff method where you choose to use a portion of your pledged crypto assets to satisfy your outstanding loan balance instead of using cash or USDC. (Note: This action is subject to a Liquidation Execution Fee).
Per Diem Interest: The exact amount of interest that accumulates on your outstanding loan balance on a daily basis.

5. Technology & Platform

Provenance Blockchain: The public, decentralized blockchain ecosystem underlying Figure Markets. It is used to securely record transactions, execute binding smart contracts, and transparently track your collateral.
Pyth Network: The decentralized market data feed utilized by Figure Markets to securely determine real-time cryptocurrency pricing and calculate dynamic loan valuations.
Smart Contract: A self-executing digital contract programmed on the blockchain. It automatically enforces the terms of your loan—such as locking collateral and releasing assets upon payoff—without requiring manual human intervention.

Figure Lending LLC dba Figure 5200 77 Center Drive, Suite 400, Charlotte, NC 28217 819-6388. NMLS ID 1717824. For licensing information go to www.nmlsconsumeraccess.org

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Equal Opportunity Lender For general customer support, call (888) 819-6388 Monday - Friday, 6am - 9pm PT, Saturday - Sunday, 6am - 5pm PT (excluding holidays).

Equal Housing Opportunity

This site is not authorized by the New York State Department of Financial Services. No mortgage solicitation activity or loan applications for properties located in the State of New York can be facilitated through this site.

Digital currency is not legal tender, is not backed by the government, and BIA accounts are not subject to FDIC or SIPC protections.

Availability:
Crypto loans are offered to U.S. borrowers by Figure Lending LLC. This product is not available to U.S. residents of DC, ID, IL, KY, MD, MS, SD, TX, VT, or VA.
Crypto loans are offered through Figure Markets Credit LLC to residents of the state of New York and to international customers except in the following jurisdictions: Crimea (Ukraine), Donetsk (Ukraine), Luhansk (Ukraine), Afghanistan, Albania, Belarus, Central African Republic, Congo (the Democratic Republic), Cuba, Ethiopia, Haiti, Iran (Islamic Republic of), Iraq, Lebanon, Libya, Mali, Myanmar (Burma), Nicaragua, Nigeria, North Korea (Democratic People's Republic of), Pakistan, Palestine (State of), Russia, Somalia, South Sudan, Sudan, Syria, Ukraine, Venezuela, Yemen, or Zimbabwe.

Lender & Licensing:
Figure Markets Credit LLC. 650 S. Tryon Street, 8th Floor, Charlotte, NC 28202. (888) 926-6259. NMLS ID 2559612. For licensing information, go to www.nmlsconsumeraccess.org

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Investing in cryptocurrencies involves significant risks. Cryptocurrency trading is not available in NY. Please click here for risk disclosures on investing and trading in cryptocurrencies.

Figure Payments Corporation offers self-directed investors and traders cryptocurrency services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. Figure Payments Corporation's NMLS ID number is 2033432, and is located at 100 West Liberty Street, Suite 600, Reno, NV., 89501. You can verify Figure Payments licensing status at the NMLS Consumer Access website. Click here for Figure Crypto's state license and regulatory disclosures.

Crypto Loans starts at a minimum of $5,000, subject to state and jurisdiction-specific legal limitations. Your loan amount will ultimately depend on the amount of collateral in your account and your eligibility will be determined by your state or jurisdiction of residence, credit profile, and other personal information available at the time of your application.

¹General minimum and maximum loan amounts may vary subject to state-specific legal limitations.

²Repayment Period (Minimum-Maximum): 12 months
Maximum APR: 12.62% APR (APR includes interest plus applicable fees such as the 1% origination fee). Available interest rates for Figure's Crypto-Backed Loan are 8.91% (9.999% APR) at 50% LTV or 11.50% (12.62% APR) up to 75%.
Representative Example (Total Cost): As an example, a borrower receives a Crypto Backed Loan at 50% LTV of $10,000 for a term of 12 months, with an interest rate of 8.91% and a 1% origination fee of $100, for an APR of 9.999%. In this example, the borrower will receive $10,000 and will make 12 monthly payments of $74.25. Rates will be higher for applications secured by assets with a higher LTV ratio. The Figure Crypto-Backed Loan has a 12 month interest-only repayment term and allows for a maximum initial LTV ratio of 75%. Interest rates change frequently so your exact interest rate will depend on the date you apply and may depend on many factors such as LTV ratio.

³Obtaining a crypto-backed loan generally does not trigger an upfront taxable event. Tax treatment may vary based on individual circumstances. Consult your tax advisor.

⁴Liquidation protection is only available in CA, NY, FL, PA, AL, AK, GA, HI, MA, UT. Liquidations will still occur if the loan becomes delinquent. More information about liquidation protection can be found here. The Figure Crypto Backed Loan (CBL) allows eligible users to borrow U.S. dollars secured by crypto collateral. The maximum loan-to-value (“LTV”) ratio is 50% at origination.

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