This Risk Disclosure Statement ("Statement") is provided by EdgeX, operated under Prezerv, to inform users of the risks associated with cryptocurrency trading and the use of trading signal services. This Statement should be read in conjunction with our Terms of Service. By using the EdgeX platform and services, you acknowledge that you have read, understood, and accepted all risks described herein.
1. General Risk Warning
Cryptocurrency trading carries a high level of risk and may not be suitable for all investors. The high degree of leverage that is often obtainable in cryptocurrency trading can work against you as well as for you. Before deciding to trade cryptocurrencies, 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; 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. Past performance is not indicative of future results.
2. Market Volatility and Price Risk
Cryptocurrency markets are characterized by extreme volatility. Prices can fluctuate significantly within very short periods, sometimes moving by double-digit percentages within hours or even minutes. This volatility can be caused by various factors including but not limited to: market sentiment and speculation, regulatory announcements and government actions, technological developments and security incidents, macroeconomic factors and global events, large transactions by significant market participants, and media coverage and social media trends. Such price movements can result in substantial gains or losses in a very short period of time, and users should be prepared for the possibility of rapid and significant changes in the value of their positions.
3. Liquidity Risk
Cryptocurrency markets may experience periods of reduced liquidity, particularly during times of high volatility or for less popular trading pairs. Low liquidity can result in: difficulty executing trades at desired prices, increased slippage between expected and actual execution prices, wider bid-ask spreads increasing transaction costs, inability to close positions in a timely manner, and potential for significant price impact from relatively small orders. Users should be aware that liquidity conditions can change rapidly and without warning, and that positions may be difficult or impossible to close during periods of market stress.
4. Exchange and Counterparty Risk
Cryptocurrency exchanges and trading platforms are subject to various operational, technical, and financial risks. These include but are not limited to: exchange insolvency or bankruptcy resulting in loss of funds, security breaches and hacking incidents, technical failures and system outages, regulatory actions against exchanges, withdrawal restrictions or delays, market manipulation on unregulated platforms, and errors in order execution or settlement. Users should conduct their own due diligence on any exchange or platform they use and should not store more funds on exchanges than necessary for trading purposes. EdgeX has no control over and accepts no responsibility for the operations, security, or solvency of any third-party exchange or platform.
5. Regulatory and Legal Risk
The regulatory environment for cryptocurrencies is evolving and varies significantly across jurisdictions. Regulatory changes may adversely affect the use, transfer, exchange, and value of cryptocurrencies. Potential regulatory risks include: outright bans on cryptocurrency trading or ownership, restrictions on cryptocurrency-related financial services, classification of certain cryptocurrencies as securities, enhanced reporting and compliance requirements, taxation changes affecting cryptocurrency gains, and enforcement actions against cryptocurrency businesses and users. Users are solely responsible for understanding and complying with all applicable laws and regulations in their jurisdiction, including but not limited to tax obligations, anti-money laundering requirements, and reporting obligations.
6. Leverage and Margin Trading Risk
Trading cryptocurrencies on margin or with leverage involves a high degree of risk and is not suitable for all investors. Leveraged trading can amplify both gains and losses, and users may lose more than their initial margin deposit. Specific risks include: rapid loss of entire account balance, margin calls requiring additional funds, automatic liquidation of positions at unfavorable prices, funding rate costs for perpetual contracts, and potential for negative account balances in extreme market conditions. Users should fully understand the mechanics of leveraged trading and the specific terms and conditions of any leveraged products they trade before engaging in such activities.
7. Signal Service Limitations
While EdgeX strives to provide accurate and timely trading signals, users should be aware of the inherent limitations of any signal service. These limitations include: signals are based on historical data and algorithmic analysis which may not accurately predict future market movements, market conditions can change rapidly rendering signals obsolete, execution of signals may be delayed due to technical or market factors, actual trading results may differ significantly from signal performance due to slippage fees and execution timing, signals do not account for individual user circumstances risk tolerance or portfolio composition, and past signal performance is not indicative of future results. Users should not rely solely on signals for trading decisions and should conduct their own analysis and research.
8. Technology and Cybersecurity Risk
The use of technology for cryptocurrency trading introduces various risks including: software bugs or errors affecting trading systems, hardware failures or malfunctions, internet connectivity issues, cyberattacks including phishing hacking and malware, loss of private keys or access credentials, smart contract vulnerabilities, and blockchain network congestion or failures. Users should implement appropriate security measures to protect their accounts and devices, including using strong unique passwords, enabling two-factor authentication, and keeping software updated. EdgeX implements reasonable security measures but cannot guarantee protection against all cybersecurity threats.
9. Tax Implications
Cryptocurrency trading may have significant tax implications depending on your jurisdiction. In India, cryptocurrency gains are currently subject to a thirty percent (30%) tax rate on profits, one percent (1%) Tax Deducted at Source (TDS) on transactions above specified thresholds, four percent (4%) health and education cess, and no ability to offset cryptocurrency losses against other income or carry forward losses. Tax laws and interpretations may change and users are solely responsible for understanding and complying with all applicable tax obligations. EdgeX does not provide tax advice and users should consult with qualified tax professionals regarding their specific circumstances.
10. Psychological and Behavioral Risk
Trading can have significant psychological impacts and may lead to behavioral patterns that increase risk. These include: overtrading due to excitement or fear of missing out, revenge trading attempting to recover losses, emotional decision-making during periods of stress, addiction to trading activities, overconfidence following successful trades, and failure to follow risk management rules. Users should be aware of these psychological factors and should establish and adhere to clear trading rules and risk management practices. If trading is causing significant stress or impacting other areas of your life, you should consider reducing your trading activity or seeking professional help.
11. Acknowledgment
By using the EdgeX platform and services, you acknowledge that: you have read and understood this Risk Disclosure Statement in its entirety; you understand that cryptocurrency trading involves substantial risk of loss; you are aware that you may lose some or all of your invested capital; you are using only risk capital that you can afford to lose; you will not hold EdgeX responsible for any trading losses; you understand that past performance does not guarantee future results; you accept full responsibility for your trading decisions; you will seek independent professional advice if needed; you understand that EdgeX provides signals for informational purposes only; and you agree to comply with all applicable laws and regulations.
12. Contact Information
For questions regarding this Risk Disclosure Statement, please contact us at support@prezerv.in. This Statement may be updated from time to time, and users are encouraged to review it periodically.