Due Diligence (200)

The Due Diligence evaluation considers Borrow History, Reputation, Compliance Risk, and Custody. These are described in the table below.

X-Margin captures the majority of this information as part of the onboarding process. Certain calculations are updated periodically as borrowers become more active on the X-Margin platform.

Factor	Description	Calculation	Weight
Borrow History	X-Margin captures loans and repayment activity through the system, and allows borrowers to upload information on their external borrowing history. Additionally, if applicable, X-Margin scrapes publicly available information.	The score is a function of the notional amount of borrow in relation to Portfolio Equity, and the time period over which the historical track record of repayment is available. Any history of failed repayment results in a 0 for this score.	75
Reputation	Reputation considers if the entity is onboarded across multiple reputable and regulated institutions. X-Margin captures this information by users supplying read-only API keys, or through connections made on the platform.	Borrowers fall in one of 3 tiers depending on the amount of reputable counterparties. Each tier corresponds to a point total.	75
Compliance Risk	X-Margin uses a 3rd party data provider to assist compliance checks and the searching of international databases. Compliance Risk evaluates the following entity information: Age, FATF Jurisdictions, CPI Index, Worldwide Governance Indicators, and Sanctions List.	Weights are applied to each of the factors in the description, and a percentage score is calculated. This score is converted to a point total using a tiered approach.	25
Custody	If trading firms rely on purpose-built, institutional grade infrastructure for the storage and movement of assets, X-Margin considers their operations as more secure.	Borrowers fall in one of 3 tiers, each of which corresponds to a point total. For example, if a Borrower uses Copper Custody or Fireblocks, they will receive the maximum score.	25