Risk Disclosure Statement
1. This Risk Disclosures Statement (“Risk Disclosure”) sets out the risks to the Client associated with the Services of Venomex. This Risk Disclosure cannot and does not disclose all risks and other aspects involved in trading and custody of Virtual Assets. Venomex may, from time to time, make amendments to the Risk Disclosure, as may be deemed necessary or appropriate or if so desired or directed by the Authority.
2. Trading on ATS involves significant risk and the Client specifically agrees to assume the risks set out in this Risk Disclosure as well as other risks not set out herein which are inherent to online trading and custody of Virtual Assets.
3. Any information provided by Venomex shall not be considered as financial or investment advice. Client shall not make any investment decision without first conducting its own research. Client is solely and exclusively responsible for determining whether any investment, strategy or any other product or service is appropriate or suitable for the Client, based on the Client’s investment objectives, personal and financial situation.
4. The Client may also seek full and independent financial, legal, tax and/or other professional advice before entering into any transaction on the ATS.
5. Clients are advised to read and understand the risks involved in trading and custody of Virtual Assets. Client acknowledges and agrees that Venomex shall not be responsible for or otherwise liable for any direct or indirect loss or damage of any kind whatsoever arising directly or indirectly from the occurrence in full or in part of any or all of the following risk events.
5.1 These risks include, but are not limited to, the following:
- Virtual Assets not being legal tender or backed by a government;
- the value, or process for valuation, of Virtual Assets, including the risk of a Virtual asset having no value;
- the volatility and unpredictability of the price of Virtual Assets relative to Fiat Currencies;
- that trading in Virtual Assets may be susceptible to irrational market forces;
- that the nature of Virtual Assets may lead to an increased risk of Financial Crime;
- that the nature of Virtual Assets may lead to an increased risk of cyber-attack;
- there being limited or, in some cases, no mechanism for the recovery of lost or stolen Virtual Assets;
- the risks of Virtual Assets being transacted via new technologies, (including distributed ledger technologies) with regard to, among other things, anonymity, irreversibility of transactions, accidental transactions, transaction recording, and settlement;
- that there is no assurance that a Person who accepts a Virtual Asset as payment today will continue to do so in the future;
- that the nature of Virtual Assets means that technological difficulties experienced by the Authorised Person may prevent the access or use of a Client’s Virtual Assets;
- any links to Virtual Assets related activity outside ADGM, which may be unregulated or subject to limited regulation; and
- any regulatory changes or actions by the Regulator or Non-ADGM Regulator that may adversely affect the use, transfer, exchange, and value of a Virtual Asset.
5.2 In addition to the risks mentioned in section 5.1 above, the Client shall take note of the following risks:
- Market Risk
- The price of Virtual Assets is highly volatile. Market for Virtual Assets is still new and uncertain. A particular Virtual Asset may lose part or substantially all of its value. Investment in Virtual Assets carries a high level of risk and, as such, may not be suitable for all Clients.
- Trading Risk
i. An Order incorrectly entered by the Client on the ATS may be executed at the price or quantity not desired by the Client or an Order entered for the wrong Virtual Asset may result in an unwanted Transaction.
ii. The Services may be unavailable due to Force Majeure events, unusual or exceptional market conditions or similar events, which may prevent the Client to liquidate its Virtual Assets held in the custody of Venomex.
- Liquidity Risk
i. The orderbook of Virtual Assets on Venomex may not have adequate liquidity at all times to execute the Order placed by the Client.
ii. Venomex may withdraw a Virtual Asset from its Market for any reason with or without notice.
- Custody Risk
i. During deposit or withdrawal, Virtual Assets may be lost due to incorrect wallet address entered or provided. It may not be possible to recover Virtual Assets sent to incorrect wallet addresses and Venomex shall not be responsible for transfer to incorrect wallet addresses.
ii. Each Virtual Asset has its unique wallet address. While transferring the Virtual Asset, if the Client uses the wallet address of another Virtual Asset, such Virtual Assets would be lost forever and cannot be recovered.
iii. In case a Virtual Asset is discontinued for trading, Venomex shall provide a time frame for Clients to withdraw their Virtual Assets. If the Client fails to withdraw Virtual Assets prior to Venomex ceasing to support transfer of any such Virtual Assets, this may result in the loss of any such Virtual Assets.
- Virtual Asset Risk
i. The features, functions, characteristics, operation, use and other properties of any Virtual Asset (“Virtual Asset Properties”) and the software, networks, protocols, systems, and other technology (including, if applicable, any blockchain) (“Underlying Technology”) used to administer, create, issue, transfer, cancel, use or transact in any Virtual Assets may be complex, technical or difficult to understand or evaluate.
ii. Any Virtual Asset and its Underlying Technology may be vulnerable to attacks on the security, integrity or operation of the Virtual Asset or its Underlying Technology (“Attack”).
iii. Any Virtual Asset, Virtual Asset Properties or Underlying Technology may change or otherwise cease to operate as expected due to a change made to the Underlying Technology, a change made using features or functions built into the Underlying Technology or a change resulting from an Attack. These changes may include, without limitation, a “fork” or “rollback” of a Virtual Asset or the underlying blockchain.
iv. Any Virtual Asset may be cancelled, lost, or double spent, or otherwise lose all or most of their value, due to forks, rollbacks, Attacks, changes to Virtual Asset Properties or failure of the Virtual Asset to operate as intended.
v. Any Virtual Asset may decrease in value or lose all of its value due to various factors including changes to Virtual Asset Properties or perceived value of Virtual Asset Properties, Attacks, suspension or cessation of support for a Virtual Asset by Venomex or other MTF/exchanges or service providers, legislative or regulatory activity and other factors outside the control of Venomex.
- Network Risk
i. Trading on the online platform exposes the participants to internet related risks. The entire internet, or parts of internet, may be unreliable or unavailable at any given time. Also, interruption, delay, corruption or loss of data or loss of confidentiality in the transmission of data, may occur when transmitting data via the internet.
ii. Messages including but not limited to Orders, trade confirmation, deposit and/or withdrawal requests, email communications between Venomex and the Client, may be delayed, intercepted, altered, or lost during transmission, due to hardware, software or network connectivity issues or any other issues arising from service provided by third party vendors.
- Currency Risk
i. All Virtual Assets transacted on Venomex are quoted against a Fiat Currency or another Virtual Asset. Fiat Currencies are prone to exchange rate risk.
- Legal Risk
i. The legal status of certain Virtual Assets may be uncertain. Clients have a responsibility to comply with the Applicable Laws and are solely responsible for reporting and paying any taxes arising from use of trading and/or custody services of Venomex.
- Loss of private key
i. The Client must ensure that the private key of its wallet is stored securely and not shared with any other Person. The loss of private key will result in the Client losing the Virtual Assets lying in its own Client wallet permanently.
- Cyber-attack Risk
i. Virtual Assets and the ATS may be targeted by hackers who may attempt to steal Virtual Assets or otherwise intervene in the functioning of the ATS or Venomex. This includes (but is not limited to) interventions by way of distributed denial of service (DDoS), sybil attack, phishing, social engineering, hacking, smurfing, malware, double spending, and spoofing.
ii. Transfer from or storage of Virtual Assets in a digital wallet exposes the Virtual Asset to the risk of loss due to security breaches arising from hacking, phishing, social engineering, smurfing, malware, spoofing and such other means. In most cases, it may not be possible to recover lost or stolen Virtual Assets.
iii. Unauthorized access of the Client Account by third parties, may lead to loss of Fiat Currencies, Virtual Assets and/or trading losses.
- Insolvency Risk
i. The Client understands and acknowledges that in the event that Venomex becomes insolvent and there is (for whatever reason) a shortfall in Client money, the available funds will be distributed in accordance with relevant provisions of section 14.4 of COBS (Client Money and Relevant Money Distribution Rules).
l. Third Party Risk
i. The Client may be exposed to errors, delays, acts, or omissions by third party providers including financial or payment institutions.
ii. The Client may be exposed to the default by third party providers vis-à-vis Venomex, including financial or payment institutions which may result in the Client suffering total or partial loss in respect of its Client Account.