Risk Disclosure

RISK DISCLOSURE STATEMENT

 

IMPORTANT NOTICE: PLEASE READ THIS RISK DISCLOSURE STATEMENT CAREFULLY

 

This Risk Disclosure Statement (“Statement”) is provided by Keyrock SA (on behalf of its subsidiaries and affiliated companies, “Keyrock”) to all clients, counterparties, and related third parties (“Client, “Counterparties”, “you”) engaging with our services and/or trading activities related to digital assets, fiat currencies, or any other property (together “assets”, or “digital assets”). The terms, disclaimers, and limitations on Keyrock’s liability, set-out in this Statement shall be deemed to be incorporated and binding in any service or trading agreement entered into with Keyrock, and shall take precedence over any other terms, agreements, understandings whether entered into in writing, or orally in discussions.

 

This Statement outlines a non-exhaustive list of various risks associated with digital asset markets and any related trading activities. By engaging with Keyrock for any purpose, you acknowledge and accept these risks without exception. 

 

Furthermore, Clients and Counterparties must assess their financial situation and risk tolerance prior to engaging in any activities with Keyrock. Trading in digital assets should be deemed to be a high risk activity which may lead to total or partial loss of your assets.

 

 

LIMITATION OF LIABILITY

 

Keyrock shall not be liable to any client, counterparty or related third party for any loss of digital assets, however arising, which is not directly attributable to its deliberate fault or gross negligence. 

 

Furthermore, Keyrock, its officers, directors, employees, agents, contractors, and affiliates disclaim liability for direct, indirect, incidental, special, exemplary, or consequential damages, including loss of profits, data, business, or other intangible losses arising out of the provision of any services and/or trading activities with Clients and Counterparties.

 

Where the exclusion of liability is not permitted by law and liability is imposed on Keyrock, the liability shall not exceed the aggregate of fees paid to Keyrock (if any) in the six (6) months prior to the event causing liability.

 

 

SPECIFIC RISKS YOU ASSUME

 

By engaging with Keyrock, you accept and bear the following risks:

 

  • Asset Value Fluctuation: Digital assets may experience significant price volatility and value fluctuations. Clients and Counterparties shall bear the risk of any changes in price of a digital asset.

 

  • Third-Party Failures: Potential security breaches, hacks, insolvency, or any other operational failures of third-parties (such as exchanges, custodians, DeFi protocols, and financial institutions) that may be used for your trading activities with Keyrock. 

 

  • Regulatory Changes: Evolving legal and regulatory frameworks that may adversely impact your trading activities or relationship with Keyrock, including regulatory authority seizures.

 

  • Trading Strategy Uncertainty: There is market uncertainty in executing trading activities, and no trading strategy guarantees positive results or value preservation due to market conditions, operational disruptions, or statistical variables.

 

  • Tax risks. The taxation of digital-asset transactions is unsettled in many jurisdictions. Gains, losses, income, staking rewards, airdrops, and forks may each attract different tax treatment. You are solely responsible for assessing, withholding, reporting, and remitting any tax liabilities.

 

  • Regulatory Actions Regulators may restrict, freeze, or confiscate assets, block addresses, or compel disclosure of transaction data. Keyrock may refuse to process instructions that, in its sole discretion, could violate applicable regulations, sanctions, or securities laws.

 

  • Keyrock’s solvency: You understand and accept the credit risk that Keyrock, any of its affiliates, or any third-party service provider may become insolvent, enter judicial reorganisation or liquidation, or otherwise be unable to perform its obligations. In such circumstances, (i) any claim you may have will rank as an unsecured claim, subordinate to secured creditors; (ii) you may recover none, some, or all of the assets you transferred; and (iii) no deposit-insurance, investor-protection, or compensation scheme applies.

 

Furthermore, any loss of assets, which are not directly attributable to Keyrock’s gross negligence, arising from the aforementioned events shall be solely borne by you. This applies to both digital assets initially transferred to Keyrock, and any assets exchanged or subsequently traded for other digital assets or fiat currency during the provision of our services, or any trading activities.

 

 

SMART CONTRACT RISKS

 

Smart contract risk refers to vulnerabilities in a smart contract leading to unintended consequences. Keyrock has no liability for any loss of Client/Counterparty assets relating to smart contract failures.

 

Smart contract failures leading to losses may arise for a number of reasons, including but not limited to:

 

  • Coding Errors: Smart contracts are written in code, and any coding errors or bugs can lead to unexpected behavior or vulnerabilities. These errors can result in the loss or theft of digital assets, unauthorized access, or manipulation of contract terms.

 

  • Security Vulnerabilities: Smart contracts are often deployed on blockchain networks, which are decentralized and immutable. However, if there are security vulnerabilities in the smart contract code, malicious actors may exploit these weaknesses to gain unauthorized access, manipulate contract logic, or steal digital assets.

 

  • Lack of Legal Clarity: Smart contracts operate in a digital environment, and the legal frameworks surrounding them are still evolving. There may be uncertainties regarding the enforceability of smart contracts, jurisdictional issues, or legal remedies in case of disputes or breaches.

 

  • Oracle Manipulation: Smart contracts often rely on external data sources, known as oracles, to execute certain conditions or trigger actions. If these oracles are compromised or manipulated, it can lead to inaccurate or fraudulent data being used in the smart contract, resulting in undesired outcomes.

 

  • Upgradability and Governance: Smart contracts may have provisions for upgradability or governance mechanisms that allow for changes to the contract’s code or parameters. However, if these mechanisms are not properly implemented or controlled, it can introduce risks of centralization, loss of trust, or manipulation by a single party or group.

 

  • Regulatory Compliance: Smart contracts may need to comply with existing regulatory frameworks, such as financial regulations or data privacy laws. Failure to comply with these regulations can result in legal and financial consequences.

 

  • Front-End and Domain Security: The front-end and/or domain related to smart contracts and associated decentralised applications, may be vulnerable to hacking or other security risks that could: (i) facilitate unauthorised access; and/or (ii) mislead prospective deployments into fraudulent protocols. The foregoing can lead to an irretrievable loss of assets.

 

  • Insider Risk: Smart contracts and dApps may be manipulated and/or materially altered by individuals that have access to the smart contract code and supporting components, that may deliberately or negligently amend the smart contract code and supporting components with adverse consequences.

 

Keyrock shall have no liability for any loss of Client/Counterparty assets arising from an issue relating to a smart contract, however so arising.

 

 

ASSETS LOANED TO KEYROCK

 

Where Clients or Counterparties have loaned assets to Keyrock for the purpose of any Services and/or trading activity, Keyrock’s obligations to return any loaned assets may be indefinitely suspended or discharged in the event of any loss event referenced in this Statement, or arising from circumstances not in Keyrock’s control.

 

 

KEYROCK’s COMMITMENT

 

Without prejudice to  the disclaimers and limitations of liability referenced in this Statement, Keyrock shall use reasonably commercial efforts to  support all Clients and Counterparties in the event of loss of any assets by:

 

  •   proactive communication regarding the development of any circumstances that have or may cause losses; and/or collaborate with you to mitigate the negative impact of any adverse events.