Disclosure Statement

Risk Disclosure Statements

INTRODUCTION

• The Risk Disclosure Statement provides the Client with information about the risks associated with Changer’s products, services and activities, Virtual Assets generally and the Accepted Virtual Assets and Stable coins listed on Changer. Clients are strongly advised to read this Risk Disclosure Statement carefully before deciding to use the platform. 
  
  The risks outlined in this statement are not exhaustive and only describe the general nature of the risks involved with holding Virtual Assets and Stable coins. The intention of this statement is just to outline the risks, and not to discuss in detail all the risks associated with holding Virtual Assets and Stable coins. Clients should undertake their own assessment as to the suitability of holding Virtual Assets or Stable coins based on their own investigations, research and based on their experience, financial resources and objectives.
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• OVERVIEW OF GENERAL RISKS ASSOCIATED WITH VIRTUAL ASSETS

  The Risk Disclosure Statement addresses the risks that are associated with transacting in Virtual Assets below:
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  (i) Virtual Assets are not Legal Tender;
  (ii) Loss of Value, Volatility and Uncertainty of Future Performance;
  (iii) Market Forces;
  (iv) Financial Crime and Cyber Attacks;
  (v) Availability of Virtual Assets;(vi) Technology Risk;
  (vii) Regulatory Risk.
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• DISCLOSURES

  A. RISKS RELATED TO THE SERVICES, VIRTUAL ASSETS, AND ACCEPTED VIRTUALASSETS AND STABLECOINS
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  RISK OF LOSS IN TRADING VIRTUAL ASSETS CAN BE SUBSTANTIAL AND YOU SHOULD,THEREFORE, CAREFULLY CONSIDER WHETHER SUCH TRADING IS APPROPRIATE FOR YOU INLIGHT OF YOUR CIRCUMSTANCES AND FINANCIAL RESOURCES. YOU SHOULD BE AWARE OF THEFOLLOWING:
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  (i) Virtual Assets are not Legal Tender

• Virtual Assets are not backed by any central government and do not constitute legal tender. 
  
  There is no assurance that a person who accepts a Virtual Asset as payment today will continue to do so in the future, and there may be no requirement for a person who accepts a Virtual Asset as payment today to continue to do so in the future. Holders of Virtual Assets put their trust in a digital, decentralized and partially anonymous system that relies on peer-to-peer networking and cryptography to maintain its integrity, and neither vendors nor individuals have an obligation to accept Virtual Assets as payment in the future.
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  (ii) Loss of Value, Volatility and Uncertainty of Future Performance

• There may be limited fundamental reasoning behind the pricing of Virtual Assets, creating the risk of volatility and unpredictability in the price of Virtual Assets relative to fiat currencies. Virtual Assets have had historically higher price volatility than fiat currencies with no or limited tangible underlying for price reference, allowing irrational and exorbitant moves in price (which may even result in a Virtual Asset having no value) as the process for valuation is speculative and uncertain.  
  
  Due to the additional risks involved, clients should only invest in Virtual Assets if they are prepared to accept the risk of losing all of their investment. Clients are advised not to transact in Virtual Assets if they are not familiar with it and to seek professional advice, as appropriate.
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  (iii) Market Forces

• Trading in Virtual Assets may be susceptible to irrational market forces, such as speculative bubbles, manipulation, scams, and fraud.
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  (iv) Financial Crime and Cyber Attacks

• [Reconciliation and Statements]Changer shall conduct a daily reconciliation of your Accepted Virtual Assets that Company holds on your behalf. Changer will not physically send out statements, instead, you may view your near-real time statement at any time upon logging into your Account. Please refer to Client Agreement for details of the statement.
• Financial crime and Cyber-attacks are more prevalent in the context of Virtual Asset trading as the ecosystem is fully digital and devoid of traditional governance. For example, a 51% attack is an attack on a blockchain by any Person or group of Persons who control more than 50% of the network's mining hash rate. Attackers with majority control of the network can interrupt the recording of new blocks by preventing other miners from completing blocks, altering payment history and subverting funds. 
  
  Clients are susceptible to Malware and fake/hijacked addresses and other forms of Cyber-attacks that holding Virtual Assets may pose and Clients should always take care of passwords and double check the addresses and URLs before loading software.  
  
  Private keys may be hacked, stolen or lost. Due to the nature of Virtual Assets, whoever owns the private key owns the relevant Virtual Asset. There is limited or (in some cases) no mechanism for the recovery of lost or stolen Virtual Assets, and Virtual Asset transactions may be irreversible. Once you send Virtual Assets to an address, there is a risk that you may lose access to, and any claim on, those Virtual Assets either indefinitely or permanently because, for example, an address may have been entered incorrectly. Losses due to fraudulent or accidental transactions may not be recoverable. 
  
  Virtual Assets may be used to facilitate money laundering, terrorism financing or other illegal activities.
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  (v) Availability of Virtual Assets

  Virtual Assets are required to be approved by the FSRA for holding on the Platform. Such approval may be withdrawn at any time, in line with the FSRA’s supervisory powers and obligations. Any Virtual Asset may be delisted at anytime without any notice or consent. Similarly, any new Virtual Asset arising from a hard fork or similar changes to a Virtual Asset's protocols will require approval by the FSRA prior to being available on the Platform.
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  (vi) Technology Risk

  The software protocols that underlie Virtual Assets are typically opensource projects, which means that (1) the development and control of such Virtual Assets is outside of Changer’s control and (2) such software protocols are subject to sudden and dramatic changes that might have a significant impact on the availability, usability or value of a specific Virtual Asset.
  
  These changes may include, without limitation, a "fork," a "rollback," an "airdrop," or a "bootstrap." Such changes may have an impact to the value of the Virtual Asset. Virtual Assets are dependent on new technologies, including distributed ledger technologies for the purposes of, amongst other things, anonymity, irreversibility of transactions, accidental transactions, transaction recording and settlement. 
  
  Transactions in Virtual Assets on the blockchain rely on the proper functioning of complex software, which exacerbates the risk of access to or use of Virtual Assets being impaired or prevented. Failing to acknowledge this can prevent Clients from use/access to Virtual Assets.
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  (vii) Regulatory Risk

  Many trading venues and Virtual Asset services are not regulated, or subject to limited regulation, and Clients should choose counterparties after careful due diligence. The regulation of Virtual Assets varies significantly between jurisdictions, including between the ADGM and other parts of the UAE. 
  
  Any regulatory changes or actions by the FSRA or a non-ADGM regulatory authority may adversely affect the use, transfer, exchange and value of a Virtual Asset. Virtual Asset regulations may be subject to sudden and/or frequent changes, depending on the jurisdiction concerned.  
  
  You further acknowledge the above list of risks is non-exhaustive and there may also be unpredictable risks. Subject to applicable law and the terms of your agreement with us, we are not responsible for any losses of any nature arising from your use of our services.
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  B. SPECIFIC RISKS ASSOCIATED WITH STABLECOINS

  Changer only acts as a custodian for Stable coin activities, and in no case is an issuer, operator, manager nor by any means a beneficiary of a Stable coin. Therefore, before conducting any transaction or trading in Stable coins, you should review the project page for a detailed information and be aware of any particular terms and conditions of the particular Stable coin’s issuer.
  
  Stable coins are designed to be pegged to fiat currency collateralized 1:1. However, Stable coins are not subject to any deposit insurance protection scheme, and the presence of fiat currency reserves is nota guarantee for redemption. There is a possibility that the assets held in reserves are not sufficient or may not be available for redemption at times of extremely high demand. Volatility spikes in the market might lead to occasions where the price of a Stable coin deviates from the underlying fiat currency.
  Any regulatory changes or actions by the FSRA or a non-ADGM regulatory authority may adversely affect the use, transfer, exchange and value of a Virtual Asset. Virtual Asset regulations may be subject to sudden and/or frequent changes, depending on the jurisdiction concerned.  
  
  You further acknowledge the above list of risks is non-exhaustive and there may also be unpredictable risks. Subject to applicable law and the terms of your agreement with us, we are not responsible for any losses of any nature arising from your use of our services.
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  (i) USDC SPECIFICRISKS

  Launched in 2018, USD Coin (USDC) is one of the top fiat-backed stable coins. USDC is a centralized token issued by Centre Consortium that was originally founded by the companies Coinbase and Circle Financial. Each USDC is designed to be backed by USD collateral held in reserve by leading regulated US financial institutions. Circle voluntarily publishes financial reports on assets held in reserve, on a monthly basis. However, USDC are not subject to any deposit insurance protection scheme, and the presence of a USD reserve is not a guarantee for redemption. There is a possibility that the assets held in reserve are not sufficient or may not be available for redemption at times of extremely high demand. As USDC is a token with a target of (price) stability which is said to be secured by assets denominated in USD or that are equivalent of USD, there is a risk that, as a result of controlling and regulatory rules to be imposed for such currency or assets, there may be unfavorable changes in use, transfer and redemption of USDC or tax liability may be imposed upon USDC holders. Centre Consortium decides on countries where USDC transactions will be supported or materialized or eligibility and appropriateness of persons who are to perform transactions, there is a risk that the UAE may be removed from countries supported and/or transactions by certain users with USDC may be blocked. In such case, Changer may stop accepting, remove and/or close USDC for transactions. For further information or support please contact Customer Support via email at [email protected]
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  Custody Disclosure Statement

  All the definitions used below are defined in the Agreement between you and Changer and must be read in conjunction with the Agreement.
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  SAFE  CUSTODY  PROVISIONS

  1. [Protection] When your Accepted Virtual Assets are held in Changer’s custody on your behalf, you shall be subject to the protections conferred by the Safe Custody Rules in COBS Chapter 15 as provided under the FSRA Rules.
  
  2. [Safe custody] Any Accepted Virtual Asset received by Changer from Clients will be received and securely stored by Changer, whereas Changer will be sole custodian of the private keys.
  
  3.[Interest] Changer does not provide interest on the Accepted Virtual Assets held on your behalf.
  
  4. [Jurisdiction] Changer shall hold Clients’ Accepted Virtual Assets in the ADGM. Should Changer decide to hold Clients’ Accepted Virtual Assets outside the ADGM, Changer will make prior disclosure to Clients via email that their Accepted Virtual Assets would be held outside the ADGM and, if applicable, that the market practices, insolvency and legal regime in that jurisdiction may differ from the regime applicable in the ADGM.
  
  5. [Segregation] Your Accepted Virtual Assets shall be held segregated from Accepted Virtual Assets belonging to Changer.
  
  6. [Pooling] Your Accepted Virtual Assets shall be pooled with other client Accepted Virtual Assets into an omnibus wallet, therefore, your Accepted Virtual Assets are not physically segregated from other clients’ Accepted Virtual Assets, but shall remain segregated from Changers’ assets.
  
  7. [Reconciliation and Statements] Changer shall conduct a daily reconciliation of your Accepted Virtual Assets that it holds on your behalf. Please refer to the Agreement for details of how statements may be accessed or obtained.
  
  8. [Client Default] On an event of default or at any time after Changer has determined, in its absolute discretion, that you have not performed (or Changer reasonably believes that you will not be able or willing in the future to perform) any of your obligations to it, Changer may immediately suspend your access to the Custody Service.