Axon Technology FZCO

Risk Disclosure Statement

 

1.        Introduction 

This Risk Disclosure Statement is issued by Axon Technology FZCO (the “Company”) to provide clients and users with clear, fair, and clear information regarding the material risks associated with Virtual Assets and related services. The Company is committed to transparently communicating material risks associated with virtual assets.

The Company will ensure that this risk disclosure statement is accurate and complete at all times. Furthermore, the Company will publish any updated risk disclosure statement and must take all reasonable efforts to ensure holders of such virtual assets are notified of any updates.

In the event of an update to the risk disclosure statement, the Company will clearly state the date on which the risk disclosure statement has been updated and will ensure all previous versions will remain easily accessible in the same format and location in which they were initially published.

 

2.        Material Risks 

Investors and users of virtual assets are advised of the inherent risks associated with virtual assets and related transactions. These risks may materially impact the value, usability, and security of virtual assets and should be carefully reviewed and understood before engaging in any activity involving virtual assets:

 

1.    Value and Price Volatility Risk 

Users should be aware that virtual assets are frequently influenced by market speculation. While this volatility can result in substantial gains, it also exposes users to the risk of significant losses, either in part or in full. The value of virtual assets can be affected by market dynamics, legal or regulatory changes, technology developments, and other external factors. Accordingly, there is no assurance that a virtual asset will maintain its value or appreciate over time.

 

2.    Irreversibility 

Virtual assets may not always be transferable and transfers are typically irreversible. Once a virtual asset transaction is executed on a Distributed Ledger Technology (DLT), the possibility of refunding the amount largely depends on the recipient's willingness to return the virtual assets. Users are solely responsible for ensuring the accuracy of recipient details, wallet addresses, and other transaction information. Errors in transaction details, including incorrect wallet addresses or network selection, may result in permanent loss of virtual assets.

 

3.    Liquidity Risk 

Liquidity in virtual assets refers to the ease of converting one virtual asset into another virtual asset or fiat without causing a significant price fluctuation. Liquidity risk emerges when the virtual asset lacks liquidity, posing challenges during sales or conversions, especially during market stress or in less liquid conditions. Certain virtual assets may be illiquid or subject to limited trading activity. This may restrict a user’s ability to buy, sell, or exit positions at desired times or prices. Market conditions, trading volume, or disruptions to trading venues may further effect liquidity constraints.

 

4.    Privacy Risks 

The virtual asset transactions are not private and may be recorded on public distributed ledger technology or blockchains, making transaction details visible to third parties and permanently recorded. While this promotes transparency, it may significantly limit user privacy.

 

5.    Cyber Security Risks 

Cyber security risk is critical consideration when dealing with virtual assets. Virtual assets may be subject to fraud, manipulation, theft, hacks and other targeted schemes. This risk also includes potential unauthorized access to digital wallets and underlying blockchain technology that compromise the integrity and confidentiality of virtual assets. Additionally, technical vulnerabilities within digital wallets, exchanges, or blockchain networks may compromise the security of virtual assets.

 

2.6 Compliance, legal and AML/CFT Risk

Evolving regulatory landscape around virtual assets may lead to compliance and legal challenges. Changes in laws, regulations, or supervisory expectations may impact the availability, legality, or treatment of certain Virtual Assets or services. Such changes may also affect the Company’s ability to provide services or may impose additional compliance obligations on users.

 

3.        User Responsibility

By accessing or using the Company’s services, users acknowledge that they understand and accept the risks associated with virtual assets. Users remain fully responsible for their decisions, actions, and any resulting losses.