Risk Notification

Investing involves Risks. Investing in Crypto-assets is considered a high-risk investment. You may lose (part of) your initial investment. Below we explain potential risks involved and how you can take them into account when making your investment decisions. General risks relate to market, currency, economic, political and business risks, system failures, hardware failures, software failures, network connectivity disruptions, cyberattacks, and data corruption risks. Capitalized words have the same meaning as in the Terms.

Market Volatility

Crypto-assets can be highly volatile. The unpredictability of their price relative to the Euro may result in significant or total loss over a short period of time.

Regulatory Risks

(Future) legislative and regulatory changes or actions may adversely affect the use, transfer, exchange, and value of Crypto-assets. This may result in a potential loss or reduction in their value.

Security Risks

Crypto-assets are protected by asymmetric encryption (public and private keys). If a private key is compromised, leaked, or stolen, the Crypto-assets may be irreversibly transferred and lost.

Hackers or malicious actors may attempt to compromise Crypto-assets or their underlying blockchain networks through methods such as malware, denial-of-service (DoS) attacks, consensus-based attacks, Sybil attacks, spoofing, smurfing, or by overpowering the blockchain’s consensus mechanism. They may also target nodes — the devices maintaining the blockchain — and interfere with their operations.

The software, technologies, or infrastructure used may contain viruses, potentially resulting in the total loss of assets or major disruptions of Distributed Ledgers.

Liquidity Risks

Some Crypto-assets have low liquidity, making it difficult to buy or sell without significantly affecting the price. In markets with insufficient volume, converting assets into cash or other Crypto-assets may be difficult.

Blockchain Network Risks

Many blockchain networks are still in early development. They may not have been fully tested and may be subject to operational or security failures.

Failures or discontinuation of these networks can impact Crypto-asset functionality. Furthermore, new technologies such as quantum computing may threaten cryptographic protocols.

Consensus mechanisms used to record transactions may be vulnerable to attacks. If successful, these attacks can alter records, potentially resulting in complete asset loss. Amdax does not control blockchain networks and cannot guarantee their reliability, security, or availability.

Operational Risks

Centralized exchanges or platforms may fail or be hacked, potentially resulting in loss of assets.

Crypto-asset transactions are irreversible; losses from fraud or error may be permanent.

Valuation Risks

Crypto-assets are not legal tender and are not government-backed. Their value depends on market demand. If demand ceases, the value could drop to zero.

Environmental Risks

Proof-of-work crypto-assets (e.g., Bitcoin) consume significant electricity. Depending on energy sources and locations, this may cause considerable environmental impact.

Fraud and Scams

Fraudulent schemes are common in the crypto space. These include Ponzi schemes, “pig butchering” scams, and fake projects that aim to deceive investors with promises of high returns.

Concentration Risks

Investing in one or only a few Crypto-assets may lead to portfolio concentration. Poor performance in these assets cannot be offset by other investments.

Large holders may also influence the market by executing substantial trades.

Staking Risks

Staking involves “slashing” risks: a portion of staked Crypto-assets may be permanently lost if a validator misbehaves (e.g., downtime or rule violations), resulting in financial losses.

Interoperability Risks

Crypto-assets often operate on distinct blockchains. Using the wrong network when transferring assets may result in permanent loss.

Third-Party Risks

Amdax may rely on third-party service providers for its services. If these parties fail to perform, Amdax may be unable to meet its own obligations.

Political Risks

Government policies or political statements may adversely affect the value of Crypto-assets.

No Applicable Compensation Schemes

Investments in Crypto-assets are not protected by investor compensation or deposit guarantee schemes under Directive 1997/9/EC or 2014/49/EU.

Unanticipated Risks

Crypto-assets belong to a relatively young and evolving industry. Additional risks may arise unexpectedly or through combinations of known risks. If uncertain, consult an independent financial advisor.

 

You are solely responsible for determining the nature, value, and appropriateness of these risks for yourself. Amdax does not provide investment or financial advice, nor recommendations regarding Crypto-assets.

Using Amdax’s services and Order Execution Platform is entirely at your own risk. Carefully assess whether these services suit your situation and financial position. You should be aware that under certain market conditions, you may suffer a total loss of your Euro or Crypto-assets, and that it may be difficult or impossible to liquidate them.

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