RISK DISCLOSURE STATEMENT
This Risk Disclosure Statement provides you with information about some of the risks associated with Virtual Assets trading and other services offered by BEQUANT (the “Services”) but it cannot disclose all of the risks associated with Virtual Assets. 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.
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 Virtual Assets.
YOU SHOULD ENSURE TO HAVE ADEQUATE FINANCIAL RESOURCES TO BEAR ANY RISKS ASSOCIATED WITH VIRTUAL 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 VIRTUAL ASSETS CAN BE SUBSTANTIAL. BY USING THE SERVICES OF BEQUANT, YOU MAY NOT HAVE ACCESS TO THE INVESTOR COMPENSATION PROTECTION. VIRTUAL 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 does not provide investment, financial, tax, or legal advice. No communication or information provided to you by BEQUANT 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 Virtual Assets (a non-exhaustive list):
PRICE VOLATILITY AND LACK OF CONTROL OVER VIRTUAL ASSET
Virtual Assets are a relatively new asset class and there is little history as to the digital asset market. The price of Virtual 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 Virtual Assets, you may lose some or all of your assets value. Unlike other asset classes, certain Virtual Assets’ value may be difficult to assess due to a lack of information. You should not deal with Virtual Assets unless you understand the extent of your exposure to risk.
Cryptocurrency 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 cryptocurrencies might carry additional risks you need to consider. Limited liquidity or difficulties to trade the asset after you’ve 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 cannot control these external factors.
Because Virtual 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 Virtual Assets is limited. Markets for Virtual 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 Virtual Asset will be active and liquid or permit you to establish or liquidate positions in the Virtual Asset when desired or at favourable prices.
Since blockchain is an independent public peer-to peer network and is not controlled in any way or manner by BEQUANT, BEQUANT 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 Virtual 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 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, Virtual 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 BEQUANT’s 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 does not own or control the underlying software protocols and smart contracts which govern the operation of some of the Virtual 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 Virtual Assets is outside of BEQUANT’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 Virtual Asset. As a result, customers may have limited, if any, ability to influence the actions of the issuer of the Virtual Asset and may lack material information which could impact the value of any particular investment.
Smart contracts are what determine a Virtual Asset’s technological features and any vulnerability or bug in the smart contract code that controls or engages with a Virtual Asset, if it surfaces or is exploited, could adversely impact any Virtual Asset issued, tracked or held by the smart contract, and could permanently impair the Virtual Asset’s function and value.
BEQUANT is not responsible for the operation of the underlying protocols and smart contracts and BEQUANT 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 the Virtual Asset BEQUANT holds for your benefit. In the event of a Fork, BEQUANT may temporarily suspend BEQUANT’s Services (with or without advance notice) and BEQUANT may (a) configure or reconfigure its systems or (b) decide not to support (or cease supporting) the Forked protocol or smart contract entirely. BEQUANT 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 Virtual Asset which you hold.
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 is not responsible for the operation of the oracles and BEQUANT makes no guarantee of their functionality, security, or integrity.
Virtual 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 Virtual Asset transactions.
RISK OF ACCOUNT FREEZE
BEQUANT may freeze your Account, including any Virtual Asset Wallet and any subaccount, in the event that you are believed to be engaged in suspicious activity or to be in breach of any 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.
Customers may choose, at the sole discretion of the customer, to have BEQUANT or a third-party entity that is integrated into the BEQUANT platform perform custody of its digital assets. Having cryptocurrencies on deposit with BEQUANT or any third party in a custodial relationship has attendant risks. Custody involves storage in one or more “cold wallets,” “warm wallets” and/or “hot wallets.” This will require the custody provider the right to control private keys. BEQUANT will take reasonable steps as it determines are necessary protect these 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 Virtual Assets from such threats or that there will be no failure or penetration of the applicable security systems. This is an evolving space, it will be difficult to judge best practice among custodians.
Furthermore, third parties providing custodial services for Virtual Assets (such as crypto exchanges) are not banks. If any such third party loses any money, fails or goes out of business, there is 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 Virtual Assets/fiat. BEQUANT will not be responsible in the event of losses caused by those third parties.
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 digital asset that you intend to transfer and that BEQUANT 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.
RISK OF LOSS OF PRIVATE KEYS
Virtual Assets are controllable only by the possessor of unique private keys relating to the addresses in which the Virtual Assets are held. The theft, loss or destruction of a private key required to access a Virtual 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 Virtual Assets could result in the loss of such Virtual Asset.
ACCURACY OF INFORMATION
While BEQUANT 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 charges fees for trading and therefore benefits from trading activity regardless of whether the trading is profitable to you. BEQUANT and its Associates have certain actual or potential conflicts of interest related to the decision to support or not support a Virtual Asset or increase or decrease the scope of the Services made available for such Virtual Asset.
The legal characterization of certain Virtual 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. Whether and how one or more Virtual 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 Virtual Asset from the Services for any reason at our sole discretion.
All Virtual Assets are potentially exposed to regulatory risks. The regulatory treatment of some of the Virtual Assets may change. The effect of any future regulatory change on the BEQUANT or on you could be substantial and adverse. You should understand that the Virtual Asset industry is dynamic and is expected to significantly change over time. Therefore, BEQUANT or you may be subject to new or additional regulatory constraints in the future. BEQUANT 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 local regulations, directives, restrictions and laws in your place(s) of residence 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, Restricted Jurisdictions). We are not offering or soliciting the use of our Services to any person located in any Restricted 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 you to continue to monitor the legal and regulatory position in respect of the Virtual Assets.
The tax treatment and accounting of Virtual Assets (and any ancillary benefits) is a largely untested area of law and practice that is subject to changes. Tax treatment of Virtual 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 Virtual 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 Virtual Assets transaction.
The nature of Virtual Assets may lead to an increased risk of cyber attack, account compromise or fraud. While BEQUANT believes it has developed an appropriate security system reasonably designed to safeguard Virtual 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 Virtual Assets will likely adapt and previously unknown threats may emerge. To the extent that BEQUANT is unable to identify and mitigate or stop new security threats, Virtual Assets 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’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 Virtual Asset trading platforms and thefts of Virtual Assets are common. Victims may have difficulty recovering losses from hackers or trading platforms.
Attackers may also seek to steal information about the BEQUANT trading platform, financial data or user information or take other actions that would be damaging to you. In addition, transactions in Virtual 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 to the Services and may also lead to support response time delays. Although BEQUANT strives to provide you with excellent service, we do not represent that the BEQUANT 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 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 Virtual Assets) stored on your behalf, cyber attack, Virtual 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.
RISK RELATED TO PLATFORM DOWNTIME AND IT MAINTENANCE
BEQUANT 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.