Risks Disclosure Statement
Cryptocurrency Trading and Holding Risk Disclosure
Purpose of This Disclosure
This document outlines key risks associated with trading, holding, and transacting in cryptocurrency tokens on the platform provided by TWMT Pty Ltd ABN 76 621 581 584 (“**TWMT**”). This risk disclosure is not exhaustive and may not capture every possible risk. You may wish to seek independent financial advice to determine if engaging in cryptocurrency activities aligns with your financial objectives and risk tolerance.
General Risks of Cryptocurrency Investments
High-risk investment: Investing in cryptocurrencies is highly speculative. Some cryptocurrencies may lack intrinsic or underlying value, which may result in significant loss of value or even the complete loss of your investment.
Volatility: Cryptocurrency prices fluctuate significantly and unpredictably due to market dynamics, technological developments, regulatory changes, and macroeconomic factors.
Market liquidity: Cryptocurrencies may have limited liquidity, affecting your ability to buy or sell tokens at desired times or prices. In illiquid markets, spreads can be wide, making transactions costly or unviable. In more extreme cases, you may be unable to exit investments on your preferred terms or at all.
Price and market changes: Regulatory actions, network disruptions, or technological adjustments (i.e. forks or rollbacks) may affect cryptocurrency values and your ability to legally hold or deal in the relevant cryptocurrency.
Systemic and systematic risks: Cryptocurrency markets face systemic risks (market wide collapse potential) and systematic risks (overall market risks due to economic or technological factors), which could lead to an adverse effect to the value or utility of the token.
Platform Risks
Service availability: TWMT reserves the right to suspend or discontinue support for specific tokens, which could limit your access or ability to withdraw tokens. This may result in you not being able to deal in tokens on your preferred terms or at all.
Third-party service dependencies: TWMT relies on third-party service providers (i.e. payment processors, custodians). Service delays by third parties may hinder your ability to recover funds or trade tokens in a timely manner or at all, resulting in potential losses.
Account security: You are responsible for safeguarding account credentials. TWMT cannot reverse unauthorised or fraudulent transactions, and losses from such events may not be recoverable. Transactions are irreversible once executed.
No financial, legal, or tax advice: TWMT does not provide advice on whether advice on whether buying, selling or holding cryptocurrency is appropriate for you. It is your responsibility to determine the suitability of cryptocurrency investments for your personal financial and tax situation.
Technological and Operational Risks
Blockchain technology: Cryptocurrency networks may be vulnerable to cyber-attacks, network congestion, hacking, or other technical failures that could have a materially adverse impact on the token’s value or utility.
Protocol and network risks: Changes to blockchain protocols (i.e. forks or rollbacks) can alter the value or functionality of tokens.
Transaction irreversibility: Cryptocurrency transactions are generally irreversible. Tokens sent to an incorrect address may be permanently lost and are unrecoverable by TWMT.
AML/CTF obligations: TWMT is required to screen clients and transactions for risks of money laundering, terrorist financing, or other illegal activities. Transfers may be delayed or cancelled if flagged, without explanation provided.
Internet and connectivity issues: The TWMT platform relies on internet-based infrastructure, which may be disrupted by technical issues or connectivity failures. During such times, you may be unable to transact or otherwise deal with tokens, potentially leading to losses.
Regulatory and Legal Risks
Legal uncertainty: The regulatory status of cryptocurrencies varies by jurisdiction, and tokens are not recognised as legal tender in Australia. This variability can impact a token’s value, usage, or legal standing in a particular region. Future regulations in Australia, which are still developing, may further impact token value and your ability to hold or otherwise trade tokens.
Jurisdictional restrictions: TWMT’s services may not be available in certain regions or to specific individuals. It is your responsibility to comply with applicable laws and restrictions in each jurisdiction in which you access TWMT’s platform.
Counterparty risk: Engaging in cryptocurrency transactions may expose you to counterparty risk, where third parties (including TWMT) may fail to meet contractual obligations. Failure to meet these obligations can lead to loss of funds or inability to engage with TWMT as expected.
Custody and Security Risks
Custody risks: Some tokens may be held by third-party custodians. If such custodians are subject to unauthorised access or hacking, this could affect TWMT’s ability to deliver or otherwise return tokens that you own or are otherwise entitled to.
Cybersecurity threats: TWMT faces cybersecurity risks, including hacking and fraud. Given TMWT operates under a custodial model, any security breach or compromise of TWMT’s systems could result in losses for customers that may not be recoverable.
Transactional Risks
Incorrect transfer details: Cryptocurrency transactions are irreversible, and errors in the recipient address or network selection may lead to a permanent loss of tokens. Double-check all details before confirming transactions.
Unauthorised transactions: If your account is compromised, unauthorised transactions may occur. TWMT assumes all wallet instructions come from you, so ensure account security. Transactions are final and cannot be reversed or recovered once made.
Non-regulated transfer risk: Cryptocurrency transactions differ from bank transfers and lack consumer protections. Mistaken payments cannot be reversed, and TWMT is not liable for errors or misdirected transfers.
Network congestion risk: High transaction volumes can lead to delays and increased fees. During congestion, transaction fees may consume a larger portion of the transfer value, potentially resulting in the recipient receiving less than the intended amount.
Non-supported cryptocurrencies: Transfers are only available for supported cryptocurrencies. Confirm compatibility before initiating transfers.
This document should be read with TWMT’s Terms & Conditions. By using TWMT’s Services, you acknowledge that you have read, understood, and accepted these risks.
Purpose of This Disclosure
This document outlines key risks associated with trading, holding, and transacting in cryptocurrency tokens on the platform provided by TWMT Pty Ltd ABN 76 621 581 584 (“**TWMT**”). This risk disclosure is not exhaustive and may not capture every possible risk. You may wish to seek independent financial advice to determine if engaging in cryptocurrency activities aligns with your financial objectives and risk tolerance.
General Risks of Cryptocurrency Investments
High-risk investment: Investing in cryptocurrencies is highly speculative. Some cryptocurrencies may lack intrinsic or underlying value, which may result in significant loss of value or even the complete loss of your investment.
Volatility: Cryptocurrency prices fluctuate significantly and unpredictably due to market dynamics, technological developments, regulatory changes, and macroeconomic factors.
Market liquidity: Cryptocurrencies may have limited liquidity, affecting your ability to buy or sell tokens at desired times or prices. In illiquid markets, spreads can be wide, making transactions costly or unviable. In more extreme cases, you may be unable to exit investments on your preferred terms or at all.
Price and market changes: Regulatory actions, network disruptions, or technological adjustments (i.e. forks or rollbacks) may affect cryptocurrency values and your ability to legally hold or deal in the relevant cryptocurrency.
Systemic and systematic risks: Cryptocurrency markets face systemic risks (market wide collapse potential) and systematic risks (overall market risks due to economic or technological factors), which could lead to an adverse effect to the value or utility of the token.
Platform Risks
Service availability: TWMT reserves the right to suspend or discontinue support for specific tokens, which could limit your access or ability to withdraw tokens. This may result in you not being able to deal in tokens on your preferred terms or at all.
Third-party service dependencies: TWMT relies on third-party service providers (i.e. payment processors, custodians). Service delays by third parties may hinder your ability to recover funds or trade tokens in a timely manner or at all, resulting in potential losses.
Account security: You are responsible for safeguarding account credentials. TWMT cannot reverse unauthorised or fraudulent transactions, and losses from such events may not be recoverable. Transactions are irreversible once executed.
No financial, legal, or tax advice: TWMT does not provide advice on whether advice on whether buying, selling or holding cryptocurrency is appropriate for you. It is your responsibility to determine the suitability of cryptocurrency investments for your personal financial and tax situation.
Technological and Operational Risks
Blockchain technology: Cryptocurrency networks may be vulnerable to cyber-attacks, network congestion, hacking, or other technical failures that could have a materially adverse impact on the token’s value or utility.
Protocol and network risks: Changes to blockchain protocols (i.e. forks or rollbacks) can alter the value or functionality of tokens.
Transaction irreversibility: Cryptocurrency transactions are generally irreversible. Tokens sent to an incorrect address may be permanently lost and are unrecoverable by TWMT.
AML/CTF obligations: TWMT is required to screen clients and transactions for risks of money laundering, terrorist financing, or other illegal activities. Transfers may be delayed or cancelled if flagged, without explanation provided.
Internet and connectivity issues: The TWMT platform relies on internet-based infrastructure, which may be disrupted by technical issues or connectivity failures. During such times, you may be unable to transact or otherwise deal with tokens, potentially leading to losses.
Regulatory and Legal Risks
Legal uncertainty: The regulatory status of cryptocurrencies varies by jurisdiction, and tokens are not recognised as legal tender in Australia. This variability can impact a token’s value, usage, or legal standing in a particular region. Future regulations in Australia, which are still developing, may further impact token value and your ability to hold or otherwise trade tokens.
Jurisdictional restrictions: TWMT’s services may not be available in certain regions or to specific individuals. It is your responsibility to comply with applicable laws and restrictions in each jurisdiction in which you access TWMT’s platform.
Counterparty risk: Engaging in cryptocurrency transactions may expose you to counterparty risk, where third parties (including TWMT) may fail to meet contractual obligations. Failure to meet these obligations can lead to loss of funds or inability to engage with TWMT as expected.
Custody and Security Risks
Custody risks: Some tokens may be held by third-party custodians. If such custodians are subject to unauthorised access or hacking, this could affect TWMT’s ability to deliver or otherwise return tokens that you own or are otherwise entitled to.
Cybersecurity threats: TWMT faces cybersecurity risks, including hacking and fraud. Given TMWT operates under a custodial model, any security breach or compromise of TWMT’s systems could result in losses for customers that may not be recoverable.
Transactional Risks
Incorrect transfer details: Cryptocurrency transactions are irreversible, and errors in the recipient address or network selection may lead to a permanent loss of tokens. Double-check all details before confirming transactions.
Unauthorised transactions: If your account is compromised, unauthorised transactions may occur. TWMT assumes all wallet instructions come from you, so ensure account security. Transactions are final and cannot be reversed or recovered once made.
Non-regulated transfer risk: Cryptocurrency transactions differ from bank transfers and lack consumer protections. Mistaken payments cannot be reversed, and TWMT is not liable for errors or misdirected transfers.
Network congestion risk: High transaction volumes can lead to delays and increased fees. During congestion, transaction fees may consume a larger portion of the transfer value, potentially resulting in the recipient receiving less than the intended amount.
Non-supported cryptocurrencies: Transfers are only available for supported cryptocurrencies. Confirm compatibility before initiating transfers.
This document should be read with TWMT’s Terms & Conditions. By using TWMT’s Services, you acknowledge that you have read, understood, and accepted these risks.
Updated on: 21/11/2024
Thank you!