Risk Disclosure Statement

Last Updated: January 15, 2025

IMPORTANT RISK WARNING

Trading cryptocurrencies and digital assets involves substantial risk of loss and is not suitable for every investor. The high degree of leverage available in futures trading can work against you as well as for you. Before deciding to trade cryptocurrencies or use any of our exchange services, you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with cryptocurrency trading and seek advice from an independent financial advisor if you have any doubts.

1. Introduction

This Risk Disclosure Statement ("Statement") is provided by CoinShares ("Company," "we," "us," or "our") to inform you of the material risks associated with using our cryptocurrency exchange platform, including spot trading, futures trading, staking services, and AI-powered automated trading (collectively, the "Services"). This Statement does not disclose all risks and other significant aspects of trading in cryptocurrencies or using our Services.

You should not engage in cryptocurrency trading unless you fully understand all the associated risks and have the financial resources to withstand potentially significant losses. We strongly advise you to seek independent professional advice before making any trading decisions.

2. General Cryptocurrency Trading Risks

2.1 Volatility Risk

Cryptocurrency markets are extremely volatile. Prices can fluctuate significantly within very short timeframes, including seconds or minutes. The value of your investment can decrease rapidly and substantially. Historical price movements and trends are not reliable indicators of future performance.

Example: Cryptocurrencies have experienced single-day price swings of 20-50% or more. Your entire investment could potentially lose significant value within hours.

2.2 Market Risk

Cryptocurrency markets are influenced by numerous factors including:

Global economic conditions and monetary policies
Regulatory announcements and government actions
Technology developments and security breaches
Market manipulation and coordinated trading activity
Social media sentiment and news coverage
Whale movements (large holders buying or selling)
Exchange listings and delistings
Network congestion and transaction fees

2.3 Liquidity Risk

Cryptocurrency markets may experience periods of low liquidity, making it difficult to execute trades at desired prices. During high volatility or market stress, liquidity can evaporate rapidly, resulting in:

Inability to exit positions at intended prices
Significant slippage between expected and executed prices
Delayed order execution or order failures
Wider bid-ask spreads increasing trading costs

2.4 Regulatory Risk

The regulatory environment for cryptocurrencies is evolving and uncertain. Changes in laws, regulations, or government policies could:

Significantly impact the value of cryptocurrencies
Restrict or prohibit cryptocurrency trading in certain jurisdictions
Impose additional compliance requirements or taxes
Affect the legality or operability of our Platform
Lead to the closure or restriction of exchanges

2.5 Technology Risk

Cryptocurrency trading depends on complex technology systems that may be subject to:

Software bugs, glitches, or errors
Hardware failures
Internet connectivity issues
Cyberattacks and security breaches
Blockchain network congestion or failures
Smart contract vulnerabilities

3. Service-Specific Risks

3.1 Spot Trading Risks

Spot trading involves the direct exchange of cryptocurrencies at current market prices. Risks include:

Immediate exposure to market price fluctuations
Execution slippage during high volatility periods
Order cancellation or partial fills due to market conditions
Price differences between quoted and executed prices

3.2 Futures Trading Risks

LEVERAGE WARNING: Futures trading with leverage amplifies both potential gains and potential losses. You could lose more than your initial margin and may be required to deposit additional funds to maintain positions. Liquidation of positions at unfavorable prices can result in substantial losses.

Futures trading carries enhanced risks including:

Amplified losses due to leverage
Margin calls requiring additional deposits
Forced liquidation at unfavorable prices
Funding rate payments that can erode positions
Rapid depletion of trading capital during adverse moves
Gap risk where prices move through stop-loss levels

3.3 Staking Risks

Staking services involve locking your assets to earn rewards. Associated risks include:

Lock-up periods during which you cannot access or sell your assets
Potential reduction in asset value during the staking period
Slashing penalties for validator misconduct on certain networks
Variable and unpredictable reward rates
Smart contract vulnerabilities in staking protocols
Network-level issues affecting staking rewards

3.4 AI Automated Trading Risks

WARNING: Historical returns, including any stated performance metrics, are based on specific market conditions and time periods. Future results may be substantially different, including the possibility of significant losses. AI trading systems are not infallible.

Our AI-powered automated trading system carries specific risks:

Algorithm performance may vary significantly under different market conditions
Black swan events and unprecedented situations may cause unexpected losses
Technical failures may result in missed opportunities or erroneous trades
Past performance does not guarantee future results
AI models may not adapt quickly to changing market dynamics
System downtime may occur during critical market movements
Data feed errors may lead to incorrect trading decisions

4. Financial Risks

4.1 Loss of Capital

You can lose part or all of your invested capital. There is no guarantee of profits, and historical performance is not indicative of future results.

Your trading capital may decrease significantly in a short period
Losses may exceed your expectations
You may not be able to recover losses through subsequent trades
Trading fees and commissions will reduce your overall returns

4.2 Withdrawal Taxes and Fees

Important Notice: Withdrawals of profits and gains may be subject to applicable taxes or fees as disclosed on our Platform. These fees are separate from network transaction fees and will be clearly disclosed prior to withdrawal confirmation. You are also responsible for any tax obligations in your jurisdiction arising from trading gains.

4.3 Counterparty Risk

Your funds are exposed to counterparty risks including:

Exchange insolvency or bankruptcy
Exchange hacks or security breaches
Withdrawal restrictions or delays
Exchange regulatory issues or shutdowns
Third-party service provider failures

5. Operational Risks

5.1 Cybersecurity Risk

Despite our security measures, there are inherent cybersecurity risks:

Unauthorized access to accounts through phishing or social engineering
Malware or keyloggers compromising login credentials
SIM swapping attacks targeting two-factor authentication
Platform vulnerabilities that could be exploited

5.2 Infrastructure Risk

Our Platform depends on various infrastructure components that may fail:

Server outages or data center failures
Network connectivity issues
Database failures or data corruption
Third-party service provider failures

5.3 Business Continuity Risk

CoinShares, as a business, is subject to operational risks that could affect service availability:

Business failure or discontinuation of services
Regulatory action against the company
Key personnel departures
Financial difficulties affecting operations

6. No Guarantees or Representations

CoinShares makes no guarantees or representations regarding:

The profitability of any trade or trading strategy
The accuracy of market analysis or predictions
The performance of our AI trading algorithms
The availability or reliability of our Platform
The security of funds deposited on our Platform
The tax implications of your trading activities
Staking rewards or yields

All performance metrics, including average returns, win rates, and historical performance, are provided for informational purposes only and should not be interpreted as guarantees of future performance.

7. Your Responsibilities

Before using our Platform, you should:

Carefully assess your financial situation and risk tolerance
Only invest money you can afford to lose entirely
Understand how cryptocurrency trading, futures, staking, and automated systems work
Review and understand all Platform documentation and policies
Seek independent financial, legal, and tax advice
Monitor your account activity regularly
Implement proper security measures for your account
Keep informed about market conditions and regulatory changes
Understand and comply with your tax obligations

8. Risk Acknowledgment

By using CoinShares, you acknowledge that you have read, understood, and accept:

This Risk Disclosure Statement in its entirety
The substantial risks associated with cryptocurrency trading
The specific risks of spot trading, futures trading, staking, and AI automated trading
That past performance is not indicative of future results
That you may lose some or all of your invested capital
That you are solely responsible for your trading decisions
That CoinShares does not provide financial, investment, or tax advice
That applicable taxes and fees may apply to withdrawals of profits

9. Questions and Concerns

If you have any questions about the risks described in this Statement or need clarification before using our Platform, please contact us:

Email: support@coinshares.vip

We strongly encourage you to fully understand all risks before trading. Do not trade if you are uncertain about any aspect of cryptocurrency trading or our exchange services.