RISK
DISCLOSURES
1. Nature of Cryptocurrency and Stablecoin
- Cryptocurrency and Stablecoin are digital representations of value serving as mediums of exchange, units of account, and stores of value.
- They lack legal tender status and are not generally supported by any government or central bank.
- Their value is solely determined by market forces, making them more volatile than traditional currencies.
- The value of cryptocurrency can be contingent on market participants' willingness to exchange fiat currency for it, posing the risk of permanent and total loss if the market disappears.
2. Absence of Deposit Insurance
- Cryptocurrencies are not covered by deposit insurance, leaving them without the same protections as traditional financial assets.
3. Legislative and Regulatory Risks
- Legislative and regulatory changes at the state, federal, or international levels can adversely affect the use, transfer, exchange, and value of cryptocurrency.
4. Market Risks
Purchasing cryptocurrencies carries several risks:
- Volatile price swings or flash crashes.
- Potential market manipulation.
- Cybersecurity threats.
- Cryptocurrency markets and exchanges lack the same regulatory controls and customer protections as traditional investments.
- Acceptance of cryptocurrency as payment is not guaranteed to persist.
5. Complexity and Vulnerability
- Investors, both individuals and institutions, should thoroughly research individual cryptocurrencies and their platforms before investing.
- Cryptocurrencies can have complex technical characteristics and be vulnerable to security attacks.
- Transaction timestamps may not align with initiation times.
6. Knowledge and Experience
- Cryptocurrency trading demands knowledge of cryptocurrency markets and competition with global traders.
- Adequate knowledge and experience are essential for significant cryptocurrency trading.
7. Technology-Related Risks
- Cryptocurrencies may undergo unexpected changes or cease functioning due to alterations in underlying technology or security breaches.
- Changes can include "forks," "rollbacks," "airdrops," or "bootstraps," which may impact the value of existing cryptocurrency holdings.
8. Appropriateness of Cryptocurrency Trading
- Cryptocurrency trading is highly risky and may not be suitable for funds from retirement savings, student loans, mortgages, emergency funds, or other designated purposes.
- It can result in significant immediate financial losses.
9. Transaction Irreversibility and Fraud Risk
- Cryptocurrency transactions can be irreversible, making losses from fraudulent or accidental transactions unrecoverable.
- The nature of cryptocurrency heightens the risk of fraud or cyberattacks.
10. Market Liquidity and Execution Risks
- Under specific market conditions, it may be challenging or impossible to quickly liquidate a cryptocurrency position at a reasonable price.
- This can occur due to sudden market drops, trading halts, or changes in the underlying cryptocurrency system.
- Greater cryptocurrency volatility increases the likelihood of transaction difficulties.
11. Technical Failures
Apart from typical market risks, losses may result from:
- System failures.
- Hardware failures.
- Software failures.
- Network connectivity disruptions.
- Data corruption.
In light of these risks, individuals and institutions alike should
exercise caution and thorough due diligence when considering involvement
in cryptocurrency and Stablecoin markets. Please note that
cryptocurrencies are not covered by deposit insurance.
