Risk Disclosure

1. Interpretation of this Risk Disclosure

All capitalized terms used in this Risk Disclosure that are not otherwise defined have the meanings given to them in the BYDFi Terms of Use (the “Terms of Use”). Terms used herein shall be interpreted in accordance with the definitions and rules of interpretation set forth in the Terms of Use.

2. Scope — BYDFi Services

This Risk Disclosure provides an overview of certain risks associated with the use of BYDFi’s products, services, platform and/or related offerings (collectively, the “Services”). Each Service carries its own specific risks. The risks described herein are not exhaustive and do not purport to describe every possible risk that may be associated with the Services. Prior to using any Service, you must independently evaluate and understand the risks involved.

3. No Personal Advice

BYDFi does not provide personalized advice, recommendations, or guidance regarding investments, tax, legal or financial matters. Any information or communications provided by BYDFi concerning trading procedures or potential risks are for informational purposes only and are not to be construed as investment, financial, tax or legal advice. Any decision to use BYDFi’s Services — including the selection of any investment, trading strategy or transaction — is the sole responsibility of you, taking into account your individual investment objectives, financial circumstances and risk tolerance.

4. No Fiduciary Relationship; No Intervention

BYDFi is not your broker, agent, fiduciary or advisor, and no trust relationship or fiduciary duty is established by virtue of your use of the Services. BYDFi does not monitor whether your use of the Services aligns with your financial goals. You are solely responsible for assessing whether you have adequate financial resources and the appropriate risk tolerance for the products and services you elect to use.

5. No Tax, Regulatory or Legal Advice

Tax treatment of digital assets is uncertain and may vary across jurisdictions. You are solely responsible for determining and fulfilling your tax obligations arising from transactions effected through the Services and for reporting and paying any taxes due. BYDFi does not provide tax or legal advice in relation to transactions on the platform. If you have any questions regarding your tax or legal position, you should consult your own professional advisors. BYDFi may be required by applicable law to report transaction, transfer, distribution or payment information to tax or other governmental authorities at the times and places required by law and may be required to withhold taxes in respect of transactions, transfers, distributions or payments. BYDFi may also require you to provide additional tax-related information, status, certificates or documentation; failure to provide timely responses may result in BYDFi withholding taxes on your behalf where required by law.

6. Market Risk

Trading in digital assets involves significant market risk and price volatility. The value of digital assets can fluctuate dramatically and unpredictably. Past performance is not indicative of future results. The value of any investment may increase or decrease, and you may lose all or part of your invested capital.

7. Liquidity Risk

Digital asset markets may have limited liquidity, which can prevent you from executing trades at your desired price or in a timely manner, especially during periods of market stress or sudden price movements.

8. Availability Risk

BYDFi does not guarantee that the Services will be available at any particular time or that the Services will be free from unplanned outages, interruptions or network congestion. You acknowledge the risk that you may be unable to buy, sell, transfer, store, send or receive digital assets at times when you desire to do so.

9. Third-Party Risk

BYDFi may rely on third parties, including payment processors, custodians and banking partners, in the provision of certain Services. You may be subject to the terms and conditions of such third parties. BYDFi is not responsible for any losses caused by third parties.

10. Security Risk

BYDFi cannot eliminate all security risks. You are responsible for maintaining the confidentiality and security of your account credentials and for all activity that occurs under your account, whether authorized by you or not. Transactions in digital assets are often irreversible; losses resulting from fraud or unauthorized transactions may be unrecoverable.

11. Risks Specific to Digital Assets

Due to the nature of digital assets and the systems on which they rely, there are inherent risks, including but not limited to:

(a) failures, defects, exploits, hacks, bugs, design flaws, economic attacks, protocol vulnerabilities or other unforeseen events affecting digital assets or the underlying technologies or economic systems on which they depend;

(b) the generally irreversible nature of many digital asset transactions, which may render losses caused by fraud or accidental transfers irrecoverable;

(c) technological obsolescence that may render particular digital assets or protocols obsolete; and

(d) settlement delays that may prevent transactions from settling on the intended delivery date.

Examples of potential attacks or adverse events include, without limitation:

1. distributed denial of service;
2. sybil attacks;
3. phishing;
4. social engineering;
5. hacking;
6. smurfing;
7. malware;
8. double spending;
9. majority-mining, consensus-based or other mining attacks;
10. misinformation campaigns;
11. forks;
12. spoofing.

12. Derivatives (Futures) and Leveraged Token Risk

Trading in derivatives (Futures) and leveraged tokens involves a high degree of risk and is suitable only for investors who understand and can bear the risks of such instruments. By accessing BYDFi derivatives or leveraged token products, you acknowledge and accept the risks associated with such products and agree that you are solely responsible for all trading and non-trading activity in your account. Do not trade with funds you cannot afford to lose.

13. Trading Risk

Digital asset markets operate 24 hours a day, 7 days a week. Prices may change rapidly and without notice at any time, including outside traditional business hours.

14. Communications Risk

Electronic communications to and from BYDFi may be subject to failure, delay, interception, corruption or loss. You should be aware that electronic communications are not always secure and may not be delivered in a timely manner.

15. Currency and Exchange-Rate Risk

Fluctuations in currency exchange rates may affect the value of your holdings and returns.

16. Legal and Regulatory Risk

Changes in laws, regulations, or regulatory enforcement, or the interpretation thereof, may materially affect the value of digital assets or the availability of BYDFi Services. Legal and regulatory developments are often unpredictable and vary by jurisdiction.