Virtual Assets Risks
Last updated on December 1st, 2019
Trading Virtual Assets involves significant risks and losses may occur.
Before using the Excelon Exchange Services you must carefully assess whether your financial situation and tolerance for risk is suitable for buying/selling/trading Virtual Assets.
Please note that here may be additional risks that we have not foreseen or identified in this document.
- The price or value of Virtual Assets can change drastically at any time and may even fall to zero. The risk of loss in trading or holding Virtual Assets can be substantial and can result in the loss of your entire exposure.
- The Virtual Asset market is vulnerable to market manipulation and other misuse. In addition, the market is susceptible to bubbles or loss of confidence, which could collapse demand relative to supply. Examples of reasons for confidence collapse include: law enforcement agencies investigations or crackdowns; changes imposed by the software developers or others; appearance of competing Virtual Assets; security breaches or hacks by criminals; technical problems or software bugs; etc.
- Virtual Assets also are associated with specific risks not generally shared with official currencies or goods or commodities in a market. Unlike most currencies, which are backed by governments or other legal entities, or by commodities such as gold or silver, a Virtual Asset is a unique type of currency, backed by technology and trust. There is no central bank that can take corrective measure to protect the value of Virtual Assets in a crisis, or issue more Virtual Assets.
- Virtual Assets are not issued by a central authority and are still largely unregulated in most jurisdictions. Therefore you do not benefit from protections available to customers receiving regulated E-money/payment services.
- The legal, tax and regulatory status of Virtual Assets is uncertain and may change suddenly. If you are in a country where buying and selling Virtual Assets becomes illegal, your service may be suspended and you may lose any rights you may have to the Virtual Assets we store on your behalf. You should make sure you are able to buy and sell Virtual Assets lawfully wherever you are located.
- You are responsible for paying any taxes owed as a result of buying and selling Virtual Assets through our service. If you do not pay tax or report your Virtual Assets to your tax authority, you may face fines or other penalties.
- Our banking providers do not transfer Virtual Assets, exchange Virtual Assets, or provide any services in connection with Virtual Assets.
- Virtual Assets are held in digital wallets, which are vulnerable to hackers, malware, and software malfunctions (bugs). Instance of any such factor may result to substantial loss of Virtual Assets we, our Liquidity Providers, or chosen custodian, hold on your behalf.
- The Virtual Assets you hold with us are held on an “omnibus basis” either in our digital wallet(s) or in custody by a third party which may be a Liquidity Provider or an established custodian institution. In the event of insolvency of a Liquidity Provider or custodian, please note there is no specific legal protection that covers you for losses arising from any Virtual Assets that were held with such third party. This could mean that you have no specific rights under insolvency law to recover Virtual Assets held by the insolvent third party and you may be treated as an ordinary creditor of the same.
- We cannot guarantee that all the Virtual Asset functionalities of the Excelon Exchange Service will be available all the time, or that we will be able to buy Virtual Assets at the time of your request. We do not make any representations or warranties that access to the Excelon Site, any of the Excelon Services, or any of the materials contained therein, will be continuous, uninterrupted, timely, or error-free.
- The information on the Site is provided for information purposes only. It is not intended to be and does not constitute financial advice or any other advice. It is general in nature and not specific to you and is not an offer to buy or sell or a solicitation of an offer to buy or sell any Virtual Asset, security, product, service or investment, nor is it a recommendation, endorsement, or sponsorship of any Virtual Asset, security, company, or fund. Excelon Exchange is not responsible for any investment decision made by you.
Virtual Assets Protocol risk
Virtual Assets supported by Excelon Exchange are governed by underlying software protocols that we do not own or control. These underlying protocols are open source and anyone can use, copy, modify, and distribute them. As a result, we undertake no responsibility for the operation of the underlying protocols and we are not able to guarantee their functionality, security, or availability.
You acknowledge and accept the risk that underlying software protocols relating to any Virtual Asset you hold with Excelon Exchange may change.
In particular, the underlying protocols are likely to be subject to sudden changes in operating rules called “forks”, and such forks may materially affect the value, function, and/or the name of the Virtual Asset you hold with Excelon Exchange. In the event that a fork occurs within the underlying protocol of a Supported Virtual Asset, we will liaise with the relevant liquidity providers in order to determine the best approach for our users in relation to such event. Any such decision will be made at Excelon Exchange’s sole discretion. In the event of a fork on a Virtual Asset, there is a risk that we may need to temporarily suspend operations in relation to that Virtual Asset without providing advance notice to you. We may, in our reasonable discretion, decline to support either or both branches of a fork.
Where possible, we may provide you with notices or alerts on forks in order to help you to deal with upcoming forks. However, it is your responsibility to make yourself aware of, and consider how to deal with, upcoming forks.
By proceeding, you acknowledge the risks presented by forks and you accept that we have no responsibility to assist you to move or sell an unsupported branch of a forked protocol.