General: The purpose of this Declaration is to provide you with information about main risks related to the trading in cryptocurrencies and derivatives markets. Please note that this Declaration does not cover all risks existing in cryptocurrencies and derivatives markets due to the diverse nature of situations. In general, risk is defined as the probability of losses in financial transactions as the result of adverse effects of various factors. Please find below the main risks that will be related to your trading in the securities market.
Systemic risk affects several financial institutions and arise from their reduced ability to perform functions or services. It is difficult to assess systemic risk due to the high degree of interaction and interdependence of financial institutions; however, materialized systemic risk can affect all financial market participants.
Market risk arise from unfavorable changes of the market prices (value) of your financial instruments as well as from unfavorable changes of political situations, an abrupt devaluation of the national currency, a crisis of the government debt market, banking and currency crisis, force majeure of mainly natural and military character. It leads to an eventual decrease in profitability or even losses. Depending on the chosen strategy, the market (price) risk will result in increasing (decreasing) price of financial instruments. You should be aware that the value of your financial instruments may become high or low, and that its growth in the past does not necessarily mean its growth in the future.
Liquidity risk is defined as the risk of decreased ability to sell financial instruments at the required price as the result of the decreasing demand. In particular, liquidity risk can be materialized in losses associated with a significant reduction of financial instruments' value when there is a need to sale them quickly.
Counterparty risk is the risk of a third party defaulting its obligations to you. Your cryptoexchange should take measures to mitigate the counterparty's risk, but you cannot exclude it completely. The counterparty's risk is particularly high for a trading in cryptocurrencies and derivatives markets.
Legal risk is associated with possible adverse effect of the enforcement of laws or regulations, standards of selfregulatory organizations that regulate the cryptocurrencies market, which may lead to negative consequences for you.
Operational risk is associated with losses incurred by you as the result of failures of IT systems infrastructure organizations, including the exchanges, data-providers, websites and other. Operational risk may eliminate from or have negative impact on operational performance and as the result may bring you eventual losses. Please read the agreement carefully and assess to which risks, including the risks of any technical failure, you and your investment advisor are exposed.
In view of the above, we recommend that you carefully consider whether the risks related to the trading in cryptocurrencies and derivatives market are acceptable to you, taking into account your investment objectives and financial capabilities. This Risk Declaration is not intended to discourage you from trading in cryptocurrencies market, but to help you to assess the exposure and chose your investment strategy with due care and responsibility. Make sure that you fully understand this Risk Declaration and, if necessary, seek clarification from your investment advisor or an independent consultant who is an expert in the relevant matters.