This Risk Disclosure Statement provides you with information about some of the risks associated with the services offered by Bequant Prime Limited (the “Services”). Capitalized terms used herein without definition shall have the meanings ascribed to them in the Terms of Business of Bequant Prime Limited (the “Terms of Business”).

By using the Services, you acknowledge that you have understood the associated risks involved and that you accept these risks. This Risk Disclosure Statement is intended to be an inclusive and not an exhaustive list of all the potential risks related to the Services. These risks, and other risks arising either now or in the future, could result in the loss or destruction of your assets. Please consider carefully whether the risks set out below, as well as all other applicable risks, are acceptable to you considering your investment objectives, risk tolerance, financial circumstances and investment experience prior to accessing and using the Services of Bequant Prime.

It is important that you make your own independent decision whether to access and use the Services and should seek any advice that you consider necessary or desirable (including financial and/or legal advice) from independent advisers before trading in DigitalAssets.

YOU SHOULD ENSURE TO HAVE ADEQUATE FINANCIAL RESOURCES TO BEAR ANY RISKS ASSOCIATED WITH DIGITAL ASSETS AND THAT YOU MONITOR YOUR POSITIONS CAREFULLY. TRADING INVOLVES RISK TO YOUR CAPITAL. YOU SHOULD NOT INVEST MONEY THAT YOU CANNOT AFFORD TO LOSE. THE RISK OF LOSS IN TRANSACTIONS INVOLVING DIGITAL ASSETS CAN BE SUBSTANTIAL. BY USING THE SERVICES OF BEQUANT, YOU MAY NOT HAVE ACCESS TO THE INVESTOR COMPENSATION PROTECTION. DIGITAL ASSETS SHOULD BE SEEN AS AN EXTREMELY HIGH-RISK ASSET AND YOU SHOULD NEVER INVEST FUNDS THAT YOU CANNOT AFFORD TO LOSE.

For the avoidance of doubt, Bequant Prime does not provide investment, financial, tax, or legal advice. No communication or information provided to you by Bequant Prime is intended as, or shall be considered or construed as investment advice, financial advice, trading advice, or any other sort of advice.

The following risks may arise in connection with Digital Assets (a non-exhaustive list):

PRICE VOLATILITY AND LACK OF CONTROL OVER VIRTUAL ASSET

Digital Assets are a relatively new asset class and there is little history as to the digital asset market. The price of Digital Assets can be highly unpredictable, not transparent and volatile when compared to other assets such as stocks, bonds and other tradable instruments. This means that if you purchase Digital Assets, you may lose some or all of your assets value. Unlike other asset classes, certain Digital Assets’ value may be difficult to assess due to a lack of information. You should not deal with Digital Assets unless you understand the extent of your exposure to risk.

Digital Asset trading is prone to being misused for illegal activities due to the anonymity of transactions and investors would be adversely affected if law enforcement agencies were to investigate any alleged illicit activities.

Newly issued Digital Assets might carry additional risks you need to consider including, but not limited to, limited liquidity or difficulties in trading the asset after you have bought it. This means prices could be volatile, going up and down quickly, and liquidity may be limited, all depending on supply and demand. Bequant Prime cannot control these external factors.

LIQUIDITY RISK

Because Digital Assets are relatively new, they have only recently become accepted as a means of payment for goods and services, or as an asset class, and therefore, the use and liquidity of DigitalAssets is limited. Markets for Digital Assets can at times become what is known as “illiquid,” which means there can be a scarcity of persons who are willing to trade at any one time. Thinly traded or illiquid markets have potential increased risk of loss because they can experience high volatility of prices and in such market participants may find it impossible to liquidate market positions except at very unfavourable prices. There is no guarantee that the markets for any Digital Asset will be active and liquid or permit you to establish or liquidate positions in the Digital Asset when desired or at favourable prices.

BLOCKCHAIN RISKS

Since blockchain is an independent public peer-to peer network and is not controlled in any way or manner by Bequant Prime, Bequant Prime shall not be responsible for any failure and/or mistake and/or error and/or breach which shall occur in blockchain or in any other networks in which the Digital Assets are being issued and/or traded. You will be bound and subject to any change and/or amendments in the blockchain system and subject to any applicable law which may apply to the blockchain. We make no representation or warranty of any kind, express or implied, statutory or otherwise, regarding the blockchain functionality nor for any breach of security in the blockchain.

DECENTRALISED FINANCE (DeFi)

Bequant Prime may utilise DeFi, through the blockchain, in respect of elements such as stablecoins, software, and hardware. As a result, there may also be coding errors, "bugs," that may cause the software to malfunction, and security vulnerabilities that allow thieves, "hackers," to break in and steal funds from the protocol. The infrastructure for DeFi and its regulation are still under development and debate.

There are no safety nets in DeFi. DeFi transfers all of the responsibility from the intermediaries to the user. If you accidentally transfer funds to a wrong address or forget the passphrases to your wallet, then you have lost your assets. There is no bank customer support line you can call to undo a transaction. Given the foregoing, Digitall Assets are not appropriate for all investors. You should not deal in these products unless you have the necessary knowledge and expertise, understand these products’ characteristics and your exposure to risk. You should also be satisfied that the product is suitable for you in light of your circumstances and financial position. In addition, use of the Services can never be considered a safe investment, rather, only an investment with a high risk of loss inherently associated with them.

OPERATION OF SOFTWARE PROTOCOLS AND SMART CONTRACTS

Bequant Prime does not own or control the underlying software protocols and smart contracts which govern the operation of some of the Digital Assets available for trading on our platform. In general, the underlying protocols are open source and anyone can use, copy, modify, and distribute them which means that (i) the development and control of such Digital Assets is outside of Bequant Prime’s control and (ii) such software protocols are subject to sudden and dramatic changes that might have a significant impact on the availability, usability or value of a given Digital Asset. As a result, customers may have limited, if any, ability to influence the actions of the issuer of the DigitalAsset and may lack material information which could impact the value of any particular investment.

Smart contracts are what determine a Digital Asset’s technological features and any vulnerability or bug in the smart contract code that controls or engages with a Digital Asset, if it surfaces or is exploited, could adversely impact any Digital Asset issued, tracked or held by the smart contract, and could permanently impair the Digital Asset’s function and value.

Bequant Prime is not responsible for the operation of the underlying protocols and smart contracts and Bequant Prime makes no guarantee of their functionality, security, or availability. The underlying protocols and smart contracts are subject to sudden changes in operating rules (“Forks”), and such Forks may materially affect the value, function, and/or even the name of theDigital Asset Bequant Prime holds for your benefit. In the event of a Fork, Bequant Prime may temporarily suspend the Services (with or without advance notice) and Bequant Prime may (a) configure or reconfigure its systems or (b) decide not to support (or cease supporting) the Forked protocol or smart contract entirely. Bequant Prime may, but is not obligated to do so, adjust your account in respect of a Fork, depending on the circumstances of each event attributable to any specific Digital Asset which you hold.

CRYPTOCURRENCIES SHOULD BE SEEN AS AN EXTREMELY HIGH-RISK ASSET AND YOU SHOULD NEVER INVEST FUNDS THAT YOU CANNOT AFFORD TO LOSE. THE RISK OF LOSING INCREASES DUE TO LEVERAGE.

You should consider whether you understand how margin trading works, and whether you can afford to take the high risk of losing your money.

At all times during which you have open positions, you must ensure that your account meets our margin requirements, which may change from time to time. Therefore, if our price moves against you, or if our margin requirements have changed, you may need to provide us with significant additional funds to meet your margin requirement at short notice, to maintain your open positions. If you do not do this, we will be entitled to close one or more or all of your positions automatically and you alone will be responsible for any losses incurred as a result.

ORACLES

Oracles, and the off-chain information that they supply to smart contracts, are a crucial aspect to the operation of many protocols, including those that rely on oracles to supply the current value of assets held as collateral. Risks can arise from the use of oracles. Centralized oracles, for example, are vulnerable to malicious behavior of the oracle provider, as well as to coding errors, attack or manipulation by others. More decentralized oracles may still be open to these vulnerabilities. Bad actors have employed oracle attacks to profit, for example by triggering liquidations based on faulty information. Even absent error or misconduct, the provision of certain information by an oracle can be delayed, which can cause stale information to be delivered to a smart contract and, in turn, create adverse consequences for those using the smart contract if market conditions have moved against them during the time delay. Bequant Prime is not responsible for the operation of the oracles and Bequant Prime makes no guarantee of their functionality, security, or integrity.

TRADING RISK

Digital Asset involves high risks and as a result, losses of capital may occur. You use the Services at your own risk. There can be no assurance that use of the Services will provide a positive return or profit, that significant losses will not be incurred, or that your objectives will be achieved. We advise that you should not invest more than you can afford to lose. It is important to have sufficient relevant, prior experience when entering into DigitalAsset transactions.

Margin Trading Risk. In addition to risks that apply to trading in Digital Assets and using the Services generally, there are specific risks that apply to margin trading. We may require that you provide collateral to support your obligations under certain transactions. In particular, you could be asked to provide additional collateral if the market moves unfavourably during the term of a particular transaction or if we change the collateral requirements at our discretion at any time. Such additional collateral may be substantial in poor market conditions and in other circumstances. You may be called upon at short notice to provide such additional collateral or reduce the total of all amounts that at any time are payable, owing but not payable, or are contingently owing by you in connection with the margin trading facility (“Amount Owing”). If the collateral additions or Amount Owing reductions are not made within the prescribed time, your collateral may be liquidated, and such other actions taken, without your consent. Moreover, you will remain liable for any resulting deficit in your Account. You should therefore carefully consider whether such an arrangement is suitable in light of your own financial position and investment objectives

The risk of loss in financing a transaction by providing collateral is significant. You may sustain losses in excess of the collateral held with Bequant Prime. Market conditions may make it impossible to execute contingent orders, such as “stop-loss” or “stop-limit” orders. You may also sustain a total loss of the initial and any additional collateral that you held with Bequant Prime to establish a position or maintain positions.

Where a transaction is leveraged, you should note that small price movements in the underlying market will have a multiplying effect on your corresponding gain or loss. Losses may even exceed the amount of margin deposited by you and you will be liable to us for any shortfall between the collateral and the loss incurred.

Any failure to make up the shortfall within the time required by Bequant Prime may result in Bequant Prime liquidating your position without your consent, applying the proceeds of such liquidation to the shortfall and claiming the balance (if any) from you. This could result in substantial costs and losses, which you will need to bear. Other consequences may also flow under the Terms of Service. You should therefore carefully consider whether such a trading arrangement is suitable in light of your own financial position and investment objectives. You must familiarise yourself with all the terms and conditions applicable to collateral and any margin trading facility and seek independent advice if needed.

Derivatives Risks. In addition to risks that apply to trading in Digital Assets and using the Services generally, there are specific risks that apply to derivatives trading, including for the avoidance of doubt, perpetual futures contracts. Derivatives products, with or without leverage, are complex in nature. It is therefore important that you understand the risks associated with cryptocurrency derivatives trading. The underlying DigitalAssets to derivatives products only exist virtually and there is no physical equivalent. Establishing a value for the underlying Digital Assets is or may become difficult as the value depends on the expectation and trust that the underlying has a future use. Among others, persistent high volatility, changes and advances may prevent the establishment of the underlying for future use thus potentially rendering the underlying worthless. We require that you provide collateral to support your obligations under the Service. In particular, you could be asked at short notice to provide additional collateral if the market moves unfavourably during the term of a particular transaction or if we change the collateral requirements at our sole discretion from time to time. Such additional collateral may be substantial in adverse market conditions and in other circumstances. The risk of loss of financing a transaction by providing collateral is significant and you may sustain losses in excess of the value of collateral held with us. If the required collateral additions or Amount Owing reductions are not made within the prescribed time, your collateral may be liquidated, and other actions taken, without your consent. For example, we may be forced to close your positions at a loss. Moreover, you remain liable for any resulting deficit in your Account.

Leverage risks. Margin trading and derivatives trading may involve a high degree of leverage as you may not be required to post 100% of collateral as margin. That is, the amount you provide upfront to enter into a derivative transaction may be small when compared to the underlying value of the derivative. Where a transaction is leveraged, you should note that small price movements in the underlying market will have a multiplying effect on your corresponding gain or loss. Losses may be substantial and may even exceed the amount of margin deposited by you and you will be liable to Bequant Prime for any shortfall between the collateral and the loss incurred by you and you may be called upon at short notice to provide additional collateral. Any failure to make up the shortfall within the time required by us may result in us liquidating your position without your consent, applying the proceeds of such liquidation to the shortfall and claiming the balance (if any) from you.

Perpetual futures. Perpetual futures contracts offered by Bequant Prime have no expiry date. Such contracts can be held or traded for an indefinite period of time and payments will continue to be made to, or deducted from you, in relation to a perpetual futures contract as long as it is held.

RISK OF ACCOUNT FREEZE

Bequant Prime may freeze your Account, including any Digital Asset wallet and any subaccount, in the event that you are believed to be engaged in suspicious activity or to be in breach of the Terms of Service. If your Account is frozen, you will not be able to trade or to make transfers to or from your Account. This may result in the closure of your open orders.

LENDING RISK

When you borrow using leverage, the Digital Assets in your Bequant Account become Bequant Prime’s collateral for the leveraged loan. A decline in the value of these Digital Assets is therefore a decline in the value of the collateral. It is important that you fully understands the risks involved which include, but are not limited to:

- You may lose more Digital Assets than originally deposited in your Bequant Account. If the Digital Assets purchased go down in price, you may face a margin call, which may require you to deposit more Digital Assets that Bequant Prime considers as acceptable collateral.

- Bequant Prime can set stricter or modified collateral requirements in its full discretion by providing an advance notice. An increase or change in eligibility in collateral requirements may take effect immediately after expiry of the notice period and may trigger a margin call as per conditions specified in the Master Digital Asset Loan Agreement.

- If you cannot meet a margin call, Bequant Prime can initiate the sale of Digital Assets in the Bequant Account in an order as determined solely by Bequant Prime. If these assets are insufficient, you will be responsible for making up any shortfall, and potentially reimbursing your Bequant Account. Bequant Prime has the right to set off your obligations against your Digital Assets in your Bequant Account(s) or in your account with any Bequant Group Companies.

- You are not entitled to a time extension on a margin call. While Bequant Prime may grant an extension, it is not required to do so. Granting an extension on a margin call does not waive Bequant Prime’s right to decline to grant an extension in the future.

CUSTODY RISK

Customers may choose, at the sole discretion of the customer, to have Bequant Prime or a third-party entity that is integrated into the Bequant Prime platform to perform custody of its Digital Assets. Having Digital Assets on deposit with any third party Custodian or Exchange has attendant risks.

Digital Assets are controllable only by the possessor of unique private keys relating to the addresses in which the Digital Assets are held. The theft, loss or destruction of a private key required to access a Digital Asset is irreversible, and any such private key would not be capable of being restored. Any loss of private keys relating to digital wallets used to store Digital Assets could result in the loss of such Digital Asset. Losing this private key is equivalent to losing access to those Digital Assets forever. There is no central authority to contact to regenerate that private key. Having this private key stolen is equivalent to giving full access to the Digital Assets to a malicious person/entity.

Custody involves storage of Digital Assets in one or more “cold wallets,” “warm wallets” and/or “hot wallets.” This will require the Custodian the right to control private keys. Bequant Prime or the third party Custodian, as applicable, will take reasonable steps as it determines are necessary protect the private keys and to prevent their exposure to hacking, malware and general security threats, but there can be no assurance that such steps will be adequate to protect such keys or the Digital Assets from such threats or that there will be no failure or penetration of the applicable security systems. This is an evolving space, therefore it will be difficult to judge best practice among custodians.

CREDIT AND COUNTERPARTY RISKS

Furthermore, your Digital Assets, when held by third party Exchanges or Custodians, may be subject to the counterparty risk or any specified or unforeseen risks of that relevant Exchange or Custodian. Such third parties are often not regulated nor supervised like traditional banks and broker-dealers. It is difficult (and often impossible) to assess their financial situation, because audited financial statements are often not available. Moreover, those third parties are not subject to any regulatory capital or liquidity requirements and investor protection. Hence, the credit and counterparty risk faced when executing and settling trades and holding assets with those third parties is high. . If any such third party loses any of your Digital Assets, defaults, is in financial distress, becomes insolvent or goes out of business, there may be no specific legal protection that covers you for losses arising from any funds you may have held with such a third party, even when such a party is registered with or regulated by a local regulator. In the event of a failure of such a third party, you may become a general unsecured creditor against that third party. Depending on the structure and security of the third party crypto wallets, some third parties may be vulnerable to hacks, resulting in the theft of Digital Assets/fiat. Bequant Prime will not be responsible in the event of losses caused by those third parties.

RISKS RELATING TO DEPOSITS, WITHDRAWALS, TRANSFERS

It is your responsibility to ensure that you use the correct address for any deposit, withdrawal, or transfer, and that the address you use is a valid address for the DigitalAsset that you intend to transfer and that Bequant Prime accepts as a deposit. Any inaccuracy in a specified address, or in the Digital Asset that you attempt to transfer between addresses, may result in total loss of the Digital Assets concerned.

ACCURACY OF INFORMATION

While Bequant Prime endeavours to keep information displayed on the Services as accurate as possible, there is a risk that this may not be correct, complete or updated.

CONFLICT OF INTEREST

Bequant Prime charges fees for trading and therefore benefits from trading activity regardless of whether the trading is profitable to you. Bequant Prime has certain actual or potential conflicts of interest related to the decision to support or not support a DigitalAsset or increase or decrease the scope of the Services made available for such Digital Asset.

LEGAL RISK

The legal characterization of certain Digital Assets is uncertain. This can mean that the legality of holding or trading them is not always clear, and may vary under the laws of different jurisdictions throughout the world. You acknowledge and agree that Digital Assets are not legal tender, not backed by any government, and accounts and value balances are not subject to any deposit protection schemes or any other insurance-type products. Whether and how one or more Digital Assets constitute property, or assets, or rights of any kind may also be unclear. You are responsible for knowing and understanding how the laws apply to you, your assets, rights and tax. We reserve the right to delist or remove any Digital Asset from the Services for any reason at our sole discretion.

REGULATORY RISK

All Digital Assets are potentially exposed to regulatory risks. The regulatory treatment of some of the DigitalAssets may change. The effect of any future regulatory change on Bequant Prime or on you could be substantial and adverse. You should understand that the Digital Asset industry is dynamic and is expected to significantly change over time.

Therefore, Bequant Prime or you may be subject to new or additional regulatory constraints in the future. Bequant Prime may, in its sole discretion, interpret and apply regulations even if it has an adverse impact on its customers including but not limited to cancelling or modifying your order, restricting or suspending your use of the Services, disclosing your identity, positions or your Account to the local regulators and national competent authorities to comply with Applicable Law.

Furthermore, you should understand that ultimately it is your responsibility to make sure that you comply with any and all regulations, directives, restrictions and laws that apply to you before using our Services. We strictly state that we do not permit the use of our Services by users from a jurisdiction in which the use of our Services is not permitted (including, without limitation, Prohibited Jurisdictions). We are not offering or soliciting the use of our Services to any person located in any Prohibited Jurisdiction or any other jurisdiction in which the specific use of our Services is not authorised or is otherwise prohibited by local laws.

We recommend that you continue to monitor the legal and regulatory position in respect of the DigitalAssets.

TAX RISK

The tax treatment and accounting of DigitalAssets (and any ancillary benefits) is a largely untested area of law and practice that is subject to changes. Tax treatment of Digital Assets may vary amongst jurisdictions. Moreover, there are no agreed standards and practices for how an auditor can perform assurance procedures to obtain sufficient audit evidence for the existence and ownership of the Digital Assets, and ascertain the reasonableness of the valuations. If you are unsure about the tax implications of your transactions, you should seek independent professional advice before entering into a Digital Assets transaction.

CYBER/FRAUD RISK

The nature of Digital Assets may lead to an increased risk of cyber attack, account compromise or fraud. While Bequant Prime believes it has developed an appropriate security system reasonably designed to safeguard Digital Assets from theft, loss, destruction and other issues relating to hackers and technological attack, such assessment is based upon known technology and threats. As technology develops, the security threats to Digital Assets will likely adapt and previously unknown threats may emerge. To the extent that Bequant Prime is unable to identify and mitigate or stop new security threats, DigitalAssets may be subject to theft, loss, destruction, malware attacks, denial of service attacks, coordinated attacks, account takeovers and other attacks which could result in loss of assets. Bequant Prime’s service providers may also be vulnerable to targeted attacks, unauthorized access, fraud, computer viruses, denial of service attacks, terrorism, firewall or encryption failures and other security problems. Cyber-attacks resulting in the hacking of Digital Asset trading platforms and thefts of Digital Assets are common. Victims may have difficulty recovering losses from hackers or trading platforms.

Attackers may also seek to steal information with regards to the Bequant Prime trading platform, financial data or user information or take other actions that would be damaging to you. In addition, transactions in Digital Assets may be irreversible, and, accordingly, losses due to accidental or fraudulent transactions may not be recoverable.

It is your responsibility to ensure that your access to credentials are kept secure and confidential, including your email, address, private keys, username and password, as well as access to or use of any two factor authentication hardware, software and the security and integrity of any systems (both hardware and software) or services that you use to access the Services.

TECHNOLOGY AND INTERNET RISKS

Access to the Services may become degraded or unavailable at any time, including during times of significant volatility or volume. This could result in the inability to use or access the Services and may also lead to support response time delays. Although Bequant Prime strives to provide you with excellent service, we do not represent that the Site or the Services will be available without interruption and we do not guarantee that any order will be executed, accepted, recorded, or remain open. Bequant Prime shall not be liable for any losses resulting from or arising out of transaction delays.

You acknowledge that there are risks associated with utilising an internet-based trading system including, but not limited to, the failure of hardware, software, and internet connections, the risk of malicious software introduction, the risk that third parties may obtain unauthorized access to information and/or assets (including your Digital Assets) stored on your behalf, cyber attack, Digital Asset network failure (such as blockchain), computer viruses, communication failures, disruptions, errors, distortions or delays you may experience when trading via the Services, howsoever caused, spyware, scareware, Trojan horses, worms or other malware that may affect your computer or other equipment, or any phishing, spoofing or other attack. You should also be aware that SMS and email services are vulnerable to spoofing and phishing attacks and should use care in reviewing messages purporting to originate from Bequant Prime.

RISK RELATED TO PLATFORM DOWNTIME AND IT MAINTENANCE

Bequant Prime may, from time to time, perform maintenance on the Trading Platform, routine or otherwise. This may lead to platform downtime and lack of access to the Trading Platform, potentially resulting in a delay or cancellation of a submitted Order yet to be processed and Orders placed during maintenance or downtime, and the inability for you to submit new or change existing Orders.