Disclosures

1. Introduction

1.1. Purpose

The purpose of this Risks Disclosure (“Document”) is to provide you with information about the risks associated with VersiFi services. Each VersiFi service has its own distinct risks. This document provides a general description of the risks when you use VersiFi services.

This Document does not explain all the risks or how such risks relate to your personal circumstances. It is important that you fully understand the risks involved before deciding to use VersiFi services.

2. Risks Disclosure and Information on Virtual Assets

VersiFi may amend this Document to ensure continuous relevance or when instructed by regulatory authorities. This document should be read in conjunction with VersiFi User Agreement.

VersiFi does not provide Services to those classified as Retail Clients. All Applicants and Clients of VersiFi should read and understand

We have set an outline of some general risks of which you should be aware:

• You should always remember that you may not get back the amount originally invested as the value of the investments, and the income from them can go down as well as up.
• There are no guaranteed returns. The price or value of an investment will depend on fluctuations in the financial markets that are outside our control.
• Past performance is not a guide to future performance.
• Operational risk, such as breakdowns or malfunctioning of essential systems and controls, including IT systems, can impact the ability of closing your investments or otherwise transact. Also, we make use of third-party vendors and executing brokers and are therefore reliant on their performance.
• The value of an individual investment may fall because of a fall in markets depending, for example, on the level of supply and demand for a particular financial instrument, the investors or market perception, the prices of any underlying or related investments or other political and economic factors.
• You will be exposed to concentration risk where there is an insufficient level of diversification in your account, and you are excessively exposed to one or a limited number of investments.

In addition to the above, you should review and understand:

2.1. No Personal Advice

We do not provide personal advice in relation to our products or services. No communication or information provided to you by VersiFi is intended as, or should be considered as, investment advice, financial advice, trading advice, or any other 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.

2.2. No Tax, Regulatory or Legal Advice

The taxation of virtual assets is uncertain, and you are responsible for determining what taxes you might be liable to, and how they apply, when transacting through the VersiFi services. It is your responsibility to report and pay any taxes that may arise from transacting on the VersiFi services, and you acknowledge that VersiFi does not provide legal or tax advice relative to these transactions. If you have any doubts about your tax status or obligations when using VersiFi services, you may wish to seek independent advice.

You acknowledge that, when, where and as required by applicable legislation, VersiFi should report information regarding your transactions, transfers, distributions or payments to tax or other public authorities. Similarly, when, where and as required by applicable law, VersiFi should withhold taxes related to your transactions, transfers, distributions, or payments. Applicable legislation could also prompt VersiFi to request you for additional tax information, status, certificates, or documentation.

2.3. Market Risks

Virtual asset trading is subject to high market risk and price volatility. Changes in value may be significant and may occur rapidly and without warning. Past performance is not indicative of future performance. The value of an investment and any returns can go down as well as up, and you may not get back the amount you had invested.

2.3.1. Interest Rate Risk

Interest rate sensitivity means that prices change relative to current and future interests rate expectations. Interest rate changes may also directly or indirectly impact the value of other financial instruments that do not provide for a return on a fixed rate basis.

2.3.2. Inflation Risk

The risk that the rate of price increases in the economy deteriorates the returns associated with an investment. The real value (the value adjusted for the impact of inflation) of an investment will fall because of the rate of inflation exceeding the rate of return of the investment.

2.3.3. Exchange Rates Risk

Exchange rate changes may cause the value of investments to rise or fall relative to the base currency, any movement in currency exchange rates may have a favourable or an unfavourable impact on the profit or loss of the investment.

2.4. Liquidity risk

Virtual 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.

Liquidity risk is the inability to buy or sell an investment at the desired time, or to transact in an instrument at all. When a delay occurs, such delay may affect the price at which such asset can be bought or sold. Also, instruments that are illiquid or that trade in lower volumes may be more difficult to value or to obtain reliable information about their value. Liquidity risk is linked to a variety of factors such as:

• The terms and conditions of an instrument.
• The fact that the instrument is not publicly traded or listed on an exchange.
• Adversely perceived market developments.
• The fact that the ownership of an investment is highly concentrated in one or small number of investors.
• A reduced number of financial institutions operating as market maker in the relevant financial instruments.
• The fact that market participants may attempt to sell holdings at the same time as the investor, and there may be insufficient liquidity to accommodate these sales.

These factors may exist at the time of investment or may arise subsequently.

2.5. Commissions, Fees, and Charges

VersiFi may, in its discretion, update the fees and charges from time to time. Please be aware of all costs and charges that apply to you because such costs and charges will affect the gains you generate from using VersiFi Services.

Before you invest or trade, you should obtain a clear explanation of all commissions, fees, and other charges for which you will be liable. These fees will affect your expected returns, and include but are not limited to:

• Trading fees.
• Custody fees.

2.6. Availability Risk

We do not guarantee that the VersiFi Services will be available at any time or that VersiFi Services will not be subject to unplanned service outages or network congestion. It may not be possible for you to buy, sell, store, transfer, send or receive Virtual Assets when you wish to do so.

There are legal requirements in various countries which may restrict the products and services that VersiFi can lawfully provide. Accordingly, some products and services and/or certain functionality within the Platform may not be available or may be restricted in certain jurisdictions or regions or to certain Users and any VersiFi campaigns, user competitions or other promotions will not be open to (and are not targeted at or intended for) Users to whom restrictions apply. Users are responsible for informing themselves about and observing any restrictions and/or requirements imposed with respect to the access to and use of the Platform and the VersiFi Services in each jurisdiction from which the Platform and the VersiFi Services are accessed by or on behalf of the User. VersiFi reserves the right to change, modify or impose additional restrictions with respect to the access to and use of the Platform and/or the VersiFi Services from time to time in its sole discretion without notification.

2.7. Third Party Risk

Third parties, such as payment providers, custodians, and banking partners may be involved in the provision of VersiFi Services. You may be subject to the terms and conditions of these third parties, and VersiFi may not be responsible for any loss that these third parties may cause to you.

2.8. Security Risk

It is not possible for VersiFi to eliminate all security risks. You are responsible for keeping your VersiFi Account password safe, and you may be responsible for all the transactions under your VersiFi Account, whether you authorised them or not. Transactions in Virtual Assets may be irreversible, and losses due to fraudulent or unauthorised transactions may not be recoverable.

2.9. Risks related to Virtual Assets

Given the nature of Virtual Assets and their underlying technologies, there are several intrinsic risks, including but not limited to:

• Faults, defects, hacks, exploits, errors, protocol failures or unforeseen circumstances occurring in respect of a Virtual Asset or the technologies or economic systems on which the Virtual Asset rely.
• Transactions in Virtual Assets being irreversible. Consequently, losses due to fraudulent or accidental transactions may not be recoverable.
• Technological development leading to the obsolescence of a Virtual Asset.
• Delays causing a transaction not to be settled on the scheduled delivery date.
• Attacks on the protocol or technologies on which a Virtual Asset depends, including, but not limited to: (a) distributed denial of service; (b) sybil attacks; (c) phishing; (d) social engineering; (e) hacking; (f) smurfing; (g) malware; (h) double spending; (i) majority-mining, consensus-based or other mining attacks; (j) misinformation campaigns; (k) forks; and (l) spoofing.

2.10. Monitoring Risks

Virtual Asset markets are open 24 hours a day, 7 days a week. Rapid price changes may occur at any time, including outside of normal business hours.

2.11. Communication Risks

When you communicate with us via electronic communication, you should be aware that electronic communications can fail, can be delayed, may not be secure and/or may not reach the intended destination.

2.12. Currency

Currency exchange fluctuations will impact your gains and losses.

2.13. Legal Risk

Changes in laws and regulations may materially affect the value of Virtual Assets. This risk is unpredictable and may vary from market to market.

Regulatory/Legal risk is the risk from regulatory or legal actions and changes which may reduce the profit potential of an investment or cause a loss on your investment. Legal changes could even have the effect that a previously acceptable investment becomes illegal or if affects the tax treatment of your investment may impact its profitability. Such risk is unpredictable and may depend on various political, economic, and other factors.

2.14. Risks relevant to certain types of transactions and arrangements

2.14.1. Off-Exchange transactions

Transactions that are conducted off-exchange may involve greater risk than dealing in exchange traded instruments because there is no exchange market through which to liquidate your position, or to assess the value of the instruments or the exposure to the risk.

Trading in off exchange investments, that is investments which are not traded under the rules of a regulated market or exchange or where there is no recognised market, and which are not settled through a regulated clearing house, exposes the investor to the additional risk that there is no certainty that the market makers will be prepared to deal in such investments and as a consequence there might be no secondary market for such investments. There may also be restrictions in relation to access and liquidity, for example, investments may only be made or redeemed on certain dates or with prescribed period of notice. You should be aware that it may be difficult to obtain reliable information about the current value of such investments or the extent of the risks to which they are exposed.

2.14.2. Suspensions of trading

Under certain trading conditions it may be difficult or impossible to liquidate a position. This may occur, for example, at times of rapid price movement if the price rises or falls in one trading session to such an extent that under the rule of the relevant exchange trading is suspended or restricted. This is an event outside of the control of VersiFi.

Placing a stop-loss order will not necessarily limit your losses to the intended amounts, because market conditions may make it impossible to execute such an order at the stipulated price.

2.14.3. Cancellation of orders

Under certain trading conditions it may be incumbent upon VersiFi to cancel existing user orders on the system, upon the initiation of the regulator or relevant VersiFi departments, in the interest of preservation of a fair and orderly market and/or prevention of operational irregularities taking place due to the market order(s) in question. Cancellation of orders may also occur during the process of removing a trade pair from the VersiFi trading and custody platform.