Important Information Regarding the Risks of Crypto Assets
UAB “Releaso” provides access to services related to crypto-assets. This risk warning is provided in accordance with the Markets in Crypto-Assets Regulation (MiCA). Before using these services, it is crucial that you fully understand the significant risks involved. Crypto-assets are highly speculative and can result in substantial financial losses. By accessing and using our services, you acknowledge that you have read, understood, and accepted the following risk warning.
For the purpose of this document, “crypto-assets” refer to digital representations of value or rights that may be transferred and stored electronically, using distributed ledger technology or similar technology, as defined under MiCA regulation. Crypto-assets are not legal tender in most jurisdictions and do not have intrinsic value. Their value is determined by market demand and supply, which can fluctuate wildly. The price of crypto-assets is highly volatile and unpredictable.
2. Extreme Price Volatility:
Crypto-asset prices can experience extreme and rapid fluctuations, including significant daily drops. You could lose a substantial portion or all of your investment.
Historical price performance is not indicative of future results.
3. Market Risks:
Market Manipulation: Due to their decentralized nature, crypto-asset markets can be vulnerable to manipulation. One example is a “pump and dump” scheme, where a group of individuals artificially inflate the price of a crypto-asset through coordinated buying (the “pump”) and then quickly sell their holdings at the higher price (the “dump”), causing the price to crash and leaving other investors with losses.
Liquidity Risk: Crypto-asset markets can be illiquid, meaning you may not be able to buy or sell your assets when desired, or at a fair price. This can be particularly acute during periods of high market volatility.
Valuation Challenges: Due to the lack of centralized pricing, determining the true value of a crypto-asset can be difficult. Different exchanges may list the same asset at significantly different prices.
4. Cybersecurity Risks:
Crypto-assets and related wallets are vulnerable to hacking and cyberattacks, such as malware, denial-of-service attacks, and phishing, which could result in the irreversible loss of your assets.
The immutability of blockchain technology means that lost or stolen assets are often unrecoverable.
Phishing and other social engineering attacks, where malicious actors try to trick you into revealing your private keys or sending them your crypto assets are common.
5. Opaque Market and Counterparty Risks:
The anonymity of some crypto-asset transactions makes it difficult to verify the legitimacy of counterparties.
Crypto-asset exchanges and custodians may be unregulated or poorly regulated, posing risks to the security of your assets.
UAB “Releaso” uses reputable custodians, but there are still inherent risks. It can be very difficult to locate and/or sue issuers of crypto assets.
6. Regulatory Uncertainty:
The regulatory landscape for crypto-assets is constantly evolving and varies significantly across jurisdictions. For example, changes in taxation rules or anti-money laundering regulations could significantly impact the value and usability of crypto-assets.
Future regulatory changes could negatively impact the value and usability of crypto-assets.
You will most likely not have the same protections that are afforded to you when using traditional regulated financial products.
7. Technological Risks:
The technology underlying crypto-assets, such as blockchain, is complex and subject to errors and vulnerabilities.
Loss of private keys can result in the permanent loss of your crypto-assets.
Forks in the blockchain, which are splits in the blockchain that create two separate versions, can create further confusion and risk.
8. Transaction Fees:
Transaction fees for crypto-assets can be high and unpredictable, especially during periods of high network congestion. These fees can significantly impact the profitability of your transactions.
9. Information and Project Risks:
Information about crypto-assets may be incomplete, inaccurate, or misleading.
Many crypto-asset projects are in their early stages and may fail, resulting in the loss of your investment.
Misleading advertising is common, and fraudulent crypto assets are also prevalent.
10. General Risks:
Risk of total loss: You risk losing all of your invested capital.
Cross border risks: It can be very difficult to understand what laws apply to your crypto assets, especially in cross border situations.
Influencer risk: Be aware that social media influencers are often paid to promote certain crypto assets.
Risk of insufficient information disclosure: Information regarding crypto assets is often lacking or unclear.
Disclaimer:
This risk warning is not exhaustive and does not cover all potential risks associated with crypto-assets. You should conduct thorough research and seek independent professional financial advice before investing in crypto-assets. UAB “Releaso” does not provide financial advice and is not responsible for any losses incurred as a result of your crypto-asset investments. UAB “Releaso” maintains records of risk warnings provided to clients. This risk warning will be updated periodically in response to regulatory changes or the emergence of new risks.
Acknowledgment:
By using UAB “Releaso” services, you acknowledge that you have read and understood this risk warning and accept the risks associated with crypto-assets.
