Risk Disclosures Document
There are several risks associated with virtual/crypto-assets and transacting in virtual/crypto-assets or perpetual futures, some of which are illustrated below. By accessing and using the services of Pi42.com, you hereby acknowledge and affirm that you have thoroughly reviewed the following virtual/crypto-assets risk disclosures.
DISCLAIMER
CRYPTO PRODUCTS AND NFTS ARE UNREGULATED AND CAN BE HIGHLY RISKY. THERE MAY BE NO REGULATORY RECOURSE FOR ANY LOSS FROM SUCH TRANSACTIONS
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1) Unique Features of Virtual/Crypto-assets
Virtual/crypto-assets are not recognized as legal tender in most jurisdictions, including India,. The pricing of virtual/crypto-assets is determined by the agreement between parties involved in a transaction, which may or may not align with the market value (which itself is determined by demand and supply) of the virtual/crypto-asset at the time of the transaction.
2) Price Volatility; Risk of Partial or Total Loss of the Invested Amount
The price of a virtual/crypto-asset is based on its perceived value and is susceptible to fluctuations based on external factors beyond the control of any individual entity. These products are characterised by high volatility, including on occasion due to market manipulation, with certain virtual/crypto-assets experiencing daily price swings exceeding 20%. Consequently, holding virtual/crypto-assets or transacting in perpetual futures entails significant volatility risk, potentially resulting in substantial losses for holders/traders.
3) Valuation and Liquidity
Virtual/crypto-assets and perpetual futures can be traded through privately negotiated transactions and numerous virtual/crypto-asset exchanges and intermediaries worldwide, each with its own pricing mechanism and order book. The lack of a centralised pricing source poses challenges for valuation. Additionally, certain virtual/crypto-assets may have concentrated holdings, affecting their prices and liquidity. As a result, buyers and sellers of virtual/crypto-assets or perpetual futures may not receive their expected treatment or prices, and liquidity dispersion can create challenges for existing positions, particularly during stressful periods.
4) Cybersecurity
Pi42.com follows applicable industry standards and best practices to reasonably secure information collected from you. That said, the use of virtual/crypto-assets or perpetual futures and related "wallets" exposes market participants to cybersecurity risks, including vulnerabilities to hacking and the possibility that publicly distributed ledgers may not be immutable. A cybersecurity event could lead to significant and irreversible losses for individuals trading virtual/crypto-assets or perpetual futures. Even a minor cybersecurity incident within the virtual/crypto-asset sphere could exert downward price pressure on the affected product and potentially impact other virtual/crypto-assets as well as perpetual futures.
5) Virtual/Crypto-asset Exchanges, Intermediaries, and Custodians
Virtual/crypto-asset exchanges, intermediaries, custodians, and vendors facilitating virtual/crypto-asset transactions are relatively new and largely unregulated in most jurisdictions. The lack of regulatory oversight raises the risk that a virtual/crypto-asset exchange may not hold sufficient virtual/crypto-assets and funds to meet its obligations, and identifying such deficiencies may prove challenging. Moreover, these exchanges are susceptible to significant outages, downtime, transaction processing delays, and flash crashes, resulting in higher operational risk compared to regulated futures or securities exchanges. Determining the issuer of a virtual/crypto-asset, the trading platform, wallet provider, or intermediary, especially in cross-border situations, can be difficult, making it challenging to ascertain applicable laws or enforce claims against them. Your ability to avail services on Pi42.com’s platforms may be subject to this.
6) Regulatory Landscape
Most virtual/crypto-assets and products or services associated with them, including perpetual futures, remain largely unregulated. Such products and services are subject to legal ambiguity and you should obtain appropriate legal advice. Future laws, regulations, or directives may also impact the price of virtual/crypto-assets and associated futures contracts .
7) Technology
The relatively new and rapidly evolving technology underlying virtual/crypto-assets introduces unique risks. Accessing, using, or transferring a virtual/crypto-asset on a blockchain or distributed ledger requires a unique private key. The loss, theft, or destruction of this private key may result in an irreversible loss of the associated virtual/crypto-asset. Additionally, the ability to participate in blockchain forks could have implications for users.
8) Transaction Fees
The amounts of blockchain fees associated with virtual/crypto-assets are subject to market forces, and during periods of stress, they may increase substantially. Virtual/crypto-asset exchanges, wallet providers, and other custodians may charge high fees relative to custodians in other markets.
9) Insufficient Information
Publicly available information about specific virtual/crypto-assets may be inaccurate, incomplete, and unclear regarding the project and its risks. Documentation may be highly technical and may require diligence on your part to comprehend the characteristics of the virtual/crypto-asset and/or the perpetual futures.
10) Misleading Information
Certain virtual/crypto-assets and related products, including perpetual futures, are aggressively advertised to the public through marketing materials and information that may be unclear, incomplete, inaccurate, or intentionally misleading. For instance, advertisements on social media platforms may focus on potential gains without adequately highlighting the high risks involved. Caution should be exercised concerning social media "influencers" who may have a financial incentive to promote specific virtual/crypto-assets and related products and services, potentially leading to biased communications.
11) Fraud and Malicious Activities
Numerous fake virtual/crypto-assets and scams exist, aiming to deceive individuals and deprive them of their funds using various techniques, including phishing or fake identification.
12) No Personal Advice
We do not provide personal advice in relation to our products or services. We sometimes provide factual information, information about transaction procedures, and information about potential risks. However, any decision to use our products or services is made by you. No communication or information provided to you by us is intended as or shall be considered or construed as, investment advice, financial advice, trading advice, or any other sort of advice. You are solely responsible for determining whether any investment, investment strategy, or related transaction is appropriate for you according to your personal investment objectives, financial circumstances, and risk tolerance.
13) No Monitoring
We do not monitor whether your use of Pi42.com services is consistent with your financial goals and objectives. It is up to you to assess whether your financial resources are adequate for your activity with us, and to your risk appetite in the products and services you use.
14) Liquidity risk
Digital Assets may have limited liquidity which may make it difficult or impossible for you to sell or exit a position when you wish to do so. This may occur at any time, including at times of rapid price movements.
RISK WARNING
Digital asset prices are subject to high market risks and price volatility. The value of your investments/contracts can go up or down and you may not get back the amount invested/transacted. You are solely responsible for your transaction decisions, and despite any risk management tools that we may provide, Pi42.com is not liable for any losses you may incur. All of your margin balance may be liquidated in the event of adverse price movement, and past performance is not a reliable predictor of future performance. You should carefully consider your experience, financial situation and objectives and risk tolerance and consult an independent advisor prior to making any investment. No risk management tools or services on Pi42.com may neutralise the risks outlined in this document or that otherwise exist in relation to virtual/crypto-assets or perpetual futures.
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