Who is eligible to obtain a credit line with Sygnum?
All private qualified and institutional Sygnum clients are eligible for a credit line using crypto assets as collateral.
How do I apply for the credit line?
If you are a Sygnum client, please contact your Relationship Manager or our team here.
Most client loan applications can be assessed in the same business day.
Which assets can be used as collateral?
We accept the following tokens as collateral:
- Bitcoin (BTC)
- Ethereum (ETH)
- USD Coin (USDC)
- Uniswap (UNI)
- Litecoin (LTC)
- Bitcoin Cash (BCH)
- Polygon (MATIC)
- Internet Computer (ICP)
- Tezos (XTZ)
- Aave (AAVE)
- Maker (MKR)
- Compound (COMP)
- Curve DAO Token (CRV)
- Synthetix (SNX)
- Bancor (BNT)
- 1inch Network (1INCH)
- Aragon (ANT)
- Sygnum Digital CHF (DCHF)
- SushiSwap (SUSHI)
- Cardano (ADA)
Solana and Polkadot tokens will be added soon to our platform.
Which fees does your Sygnum credit line have?
The credit line has two associated fees: interest and commitment.
Interest fee: Sygnum charges an interest fee on the current drawings only. For example, if you have a CHF 1 million credit line with us, and you use only CHF 800,000 of it, we only charge interest on the CHF 800,000 drawing.
Commitment fee: This is the minimum fee you would need to pay every 12 months to keep the credit line open with us. For example, if your contract has a total limit of CHF 1 million and a commitment fee of 1 percent p.a., you would pay a minimum fee of CHF 10,000. If you use the line and the total interest charge is higher than CHF 10,000, the commitment fee is waived.
How are credit line fees charged?
Fees are charged on the last day of each quarter (31 March, 30 June, 30 September and 31 December). Fees are charged directly to the client’s account for the credit line.
What happens if my assets decrease in value and a margin call procedure is triggered?
Sygnum has two procedures:
In the case of a margin call, we contact a client and request additional collateral to restore the initial margin level.
At a liquidation level, Sygnum has the right, but not the obligation, to close any open positions and liquidate clients’ collateral to cover negative balances and meet collateral requirements.
Margin call thresholds vary according to the composition of a clients’ portfolio.
What happens to assets once clients pledge them as collateral?
Assets will be locked and unable to be transferred out, but will remain secure in the client’s Sygnum custody account. If the assets gain in value and the client becomes “over-collateralised”, the assets exceeding the collateralisation level become available for further trading and transferring out. This is an automatic process and is updated in real-time according to market prices.
Does Sygnum use my collateral for other business purposes?
Although obtaining ownership of the collateral (rehypothecation) is common, this is not a market practice Sygnum follows. Therefore, our clients do not face a counter-party risk when depositing their assets with Sygnum. Clients retain full ownership of all their assets, including those pledged as collateral, and have standard custody fees applied.