VARA Lending and Borrowing Services Rulebook (version dated 19 May 2025)chapter by chapter

Part I.A.1-2Part I.A Policies and procedures

VASPs must maintain written policies on virtual asset client access, including during volatility, and review these policies at least yearly.

Part I.B.1-3Part I.B Public disclosures

Publish policies on conflicts of interest, client asset protection, risk management, and any relevant convictions of Senior Management.

Part I.C.1Part I.C Interest disclosures

Firms lending Virtual Assets borrowed from clients must disclose interest denomination, annual percentage yield, whether fixed or variable, estimation method, accrual and crediting frequency, and simple or compound basis.

Part I.D.1-4Part I.D.1-3 Other disclosures

Lending and borrowing service providers must publish a prominent explanation of services, client types, restrictions and governance, and require third parties offering them to publish the same disclosures.

Part I.D.2 Asset and liability report

VASPs must publish and update, at least every three months, a lending and borrowing asset and liability report showing assets held, lent or borrowed, collateral pledged or posted, and how they are held.

Part II.A.1-2 Liquidity and collateral sufficiency

VASPs must always hold sufficient virtual assets to meet client obligations, ensure borrowers post sufficient collateral, monitor and audit it regularly, and immediately notify VARA of any shortfall or likely shortfall.

Part II.A.3 Withdrawals

Clients must be informed when Virtual Assets are non-withdrawable; otherwise, withdrawals must be processed within 24 hours barring external factors.

Part II.A.4-5 Collateral use and holding

Lending and borrowing service providers may use client Virtual Assets only as set out in Client Agreements, and client assets used in the service are held on the client's behalf unless the agreement states otherwise.

Part II.A.6 Counterparty due diligence

VASPs must regularly carry out comprehensive counterparty due diligence, collecting and verifying loan purpose, business nature, financial situation and liquidity of clients.

Part II.B.1-4Part II.B Client reporting and valuation

Lending and borrowing service providers must send clients at least monthly written statements of positions, transactions, interest and collateral, and independently value all client positions.

Part II.C.1-2Part II.C Record-keeping

Retain records of lending and borrowing transactions for eight years and provide them to VARA upon request.

Part II.D.1-5Part II.D Risk management and due diligence

Virtual asset lending and borrowing providers must perform due diligence on risk profile, collateral needs and pledgeability before providing services, apply the same steps to third-party business, monitor liquidity and market risk, record collateral assessments, and have independent third-party audits.

Part II.E.1-2Part II.E Client Agreements

Virtual asset lending client agreements must disclose collateral, loan-to-value ratios, interest, asset withdrawal rights, risks, termination and complaints terms, and the VASP must obtain clear client consent to use client virtual assets.

Part II.C.1-retRecord Retention — Lending and borrowing transaction records, agreements, instructions and counterp

Licensed lending and borrowing service providers must keep transaction records, agreements, instructions and counterparty information for eight years from the record date.