Risk Disclosure Statement
CASH 2 CRYPTO RISK DISCLOSURE STATEMENT
This risk disclosure statement (Risk Disclosure Statement) is being provided to you in connection with the opening of an account (Account) with 2237667 Alberta Ltd. doing business as Cash 2 Crypto (Cash 2 Crypto) to purchase, sell and transfer certain digital assets (Digital Assets) through the services offered by Cash 2 Crypto platform (the Platform) and is incorporated by reference into the terms of service (the Terms) that you accept at the time of account opening and/or using the services provided by Cash 2 Crypto. Capitalized terms used and not defined in this Risk Disclosure Statement have the meanings given to them in the Terms.
No securities regulatory authority has expressed an opinion about or any of the Digital Assets, including any opinion that a digital (crypto) asset is not a security and/or derivative.
By using the Platform or any other services related thereto (collectively, the Services), you understand that there are substantial risks associated with the purchase, sale and use of Digital Assets, and you are agreeing to familiarize yourself and assume any and all such risks, including:
A. Risks Associated with your Account
(i) Trading in Digital Assets may not be appropriate for all members of the public. You should carefully consider whether trading is appropriate for you in light of your knowledge, experience, financial objectives, financial resources, and other relevant circumstances. Trading in Digital Assets may not be appropriate for you, particularly if you use funds drawn from retirement savings, loans or lines of credit, mortgages, emergency funds, or funds set aside for other purposes. The volatility and unpredictability of the prices of Digital Assets lead to significant losses over a short period of time.
(ii) Cash held by Cash 2 Crypto on your behalf is held in a general corporate account by Cash 2 Crypto, such cash is not segregated from other assets of Cash 2 Crypto, and accordingly, this arrangement may expose you to a risk of loss of your cash if Cash 2 Crypto becomes insolvent.
(iii) An Account is not a bank account and funds received or held by us or by you, and transacted through us, do not earn interest.
(iv) Cash 2 Crypto is not a member of the Canadian Investor Protection Fund (CIPF).
B. Risks Associated with Digital Assets
(i) We cannot reverse a Digital Asset transaction which has been broadcast to a Digital Asset network, and losses due to fraudulent or accidental transactions are not recoverable. You must be careful to transfer Digital Asset to your own wallet, and not to untrustworthy businesses or to people you do not personally know.
(ii) Some Digital Asset platforms have been subject to cyberattacks and other technical issues that have resulted in the loss or theft of Digital Assets to their users, and there is a risk that a similar cyberattack could affect the services and result in the theft or loss of your cash or Digital Assets for which you cannot recover.
(iii) There are risks associated with utilizing an Internet-based trading system including, but not limited to: the failure of hardware, software, and Internet connections. Cash 2 Crypto is not responsible for any communication failures, disruptions, errors, distortions, or delays you may experience when trading via the services, however caused.
(iv) Price and liquidity of Digital Assets has been, and may be, subject to large fluctuations on any given day and you may lose any and all value in your Digital Assets at any time.
(v) Digital Assets are not part of a central bank that can take corrective measures to protect the value of Digital Assets in a crisis. Digital Assets are not legal tender and are not backed by a government (i.e. do not have the same protection as the money deposited into a bank account)
(vi) Digital Assets derive value from the continued willingness of market participants to use Digital Assets. Digital Assets are susceptible to loss of confidence, which could collapse demand relative to supply and may result in permanent and total loss of value of a particular Digital Asset if the market for such Digital Assets disappears.
(vii) As a relatively new technology, it is expected that there will continue to be developments in blockchain, which could impact the value of a Digital Asset. Due to this short history, it is not certain whether the economic value or functional elements of Digital Assets will remain constant over time. Insufficient software development, contribution rates, community disputes regarding the development of the network and scaling options, or any other unforeseen challenges that the community is not able to navigate could have an adverse impact on the price of a Digital Asset.
(viii) Blockchain networks are powered by open source software. When a modification to that software is released by developers, and a substantial majority of miners consent to the modification, a change is implemented and the blockchain network continues uninterrupted. However, if a change were to be introduced with less than a substantial majority consenting to the proposed modification, and the modification is not compatible with the software in operation prior to its modification, the consequence would be what is known as a “fork” (i.e. a split) of the blockchain. One blockchain would be maintained by the pre- modification software and the other by the post-modification software. The effect is that both blockchains would operate in parallel, but independently. There are examples of such forks occurring in the past on both the Bitcoin and Ethereum blockchain networks, in some cases creating new popular and valuable assets of their own such as Bitcoin Cash. In the future, such a fork could occur again, and affect the viability or value of a Digital Asset. Similar to the blockchain networks themselves, Digital Assets built on top of Ethereum or that integrate with Ethereum decentralized applications (DApps) are self-governed and subject to frequent upgrades by the open-source community. As new versions are released, the value of the Digital Asset might be impacted and material changes to functionality could trigger changes in demand, supply or price. We reserve the right to decide how it will continue to support the resulting assets of a fork or protocol upgrade, if applicable, and will inform impacted clients of their trading or liquidation options at that time.
(ix) In the past, flaws in the source code for Digital Assets have been exposed and exploited, including flaws that disabled some functionality for users, exposed users’ personal information and/or resulted in the theft of users’ digital assets. Although the Bitcoin and Ethereum blockchains have demonstrated resiliency and integrity over time, the cryptography underlying either one could, in the future, prove to be flawed or ineffective. For example, developments in mathematics and/or technology, including advances in digital computing, algebraic geometry, and quantum computing, could result in the cryptography of the blockchain network being vulnerable to attack. Generally, any reduction in public confidence on the security or source code of a core blockchain network could negatively affect the broader sector, and this could negatively affect the value of Digital Assets.
(x) Cash 2 Crypto seeks to enable support for popular Digital Assets (e.g. Bitcoin and Ethereum) but does not guarantee that it will continue to support any particular Digital Asset. We will attempt to provide notice if we are required to disable or remove a Digital Asset.
(xi) It is possible that you may experience a technical error while using the services provided by Cash 2 Crypto. If you experience such an error, you should report the anomaly to customer support rather than taking action. We user reasonable efforts to fix all errors on a timely basis, but will not accept responsibility for actions based on user interface errors.
(xii) You can view your Digital Assets by logging into your Account. You are responsible for protecting your username and password, and if you lose that information you may not be able to access your Account.
C. RISKS ASSOCIATED WITH BLOCKCYPHER
In the case of transfer of Digital Assets in connection with pre-authorized purchase plan (PAPP) through our service provider, Digital Assets of the same type are typically combined together and sent to Cash 2 Crypto’s digital asset wallet maintained by BlockCypher Inc. (BlockCypher) before they are forwarded to the wallets specified by the customer. The forwarding of Digital Assets received at Cash 2 Crypto’s digital asset wallet at BlockCypher typically is structured to happen almost instantaneously, however, such transactions are subject to general risks pertaining to Digital Asset transactions as described above, including but not limited to risks of delays in processing transactions, hardware and software failure, cyberattacks, risks of exploitation of any vulnerability. Furthermore, BlockCypher is a legal entity not resident in Canada, and it may be difficult or impossible to enforce any legal claims against BlockCypher.