Crypto-currencies are new technologies that often work differently to your prior experience. They entail various risks that you should understand. We have highlighted some of those risks below.
1. The trading of goods and products, real or virtual, as well as virtual currencies, involves significant risks. Prices can fluctuate on any given day. Due to such price fluctuations, you may increase or lose value in your assets at any given moment. Any currency, virtual or not, may be subject to large or sudden shifts in value and may even become worthless. There is an inherent risk that losses will occur as a result of buying, selling or trading anything on a market. You should be aware that the risk of loss in trading or holding Digital Currencies can be substantial.
2. Digital Currency trading also has special risks not generally shared with official currencies or goods or commodities in a market. Unlike most currencies, which are backed by governments or other legal entities, or by commodities such as gold or silver, Digital Currency is a unique kind of currency, backed by technology and trust. There is no central bank or government regulator that can take corrective measures to protect the value of the Digital Currency in a crisis, issue more currency, or balance the price fluctuations.
3. Instead, Digital Currency is an autonomous and largely unregulated worldwide system of currency firms and individuals. Traders and market participants put their trust in a digital, decentralized and partially anonymous system that relies on peer-to-peer networking and cryptography to maintain its integrity. Thus, the value of Digital Currency may be derived from the continued willingness of market participants to exchange Fiat Currency for Digital Currency, which may result in the potential for permanent and total loss of value of a particular Digital Currency should the market for that Digital Currency disappear.
4. Digital Currency trading may be susceptible to irrational (or rational) bubbles or loss of confidence, which could collapse relative to demand and supply. For example, confidence in Digital Currency might collapse as a result of unexpected changes imposed by software developers or others, a government crackdown, the creation of superior competing alternative currencies, or a deflationary or inflationary spiral. Confidence might also collapse because of technical problems, for example, if the anonymity of the system is compromised, if money is lost or stolen, or if hackers or governments are able to prevent transactions from settling.
5. Transactions in the Digital Currency may be irreversible, and, accordingly, losses due to fraudulent or accidental transactions may not be recoverable.
6. Due to the nature of Digital Currency, any technological difficulties experienced by the Company could prevent the access or use of a Member’s Digital Currency.
8. Markets for Digital Currency have varying degrees of liquidity. Some are quite liquid while others may be thinner or illiquid. The Company does not guarantee any profit from trading or any other activity associated with the site.
9. IN LIGHT OF THE ABOVEMENTIONED RISKS, WHICH ARE NOT A COMPREHENSIVE LIST, YOU SHOULD CAREFULLY CONSIDER IF HOLDING DIGITAL CURRENCY IS SUITABLE FOR YOU DEPENDING ON YOUR FINANCIAL CIRCUMSTANCES.