Risk Disclosures

General Disclosures and Risk Acknowledgement

These disclosures are supplemental to any agreements, terms and conditions or other documentation you may have in place with other entities of Clear Junction (together “Clear Junction”) and may be amended or supplemented by additional disclosures from time to time. These disclosures may be amended or supplemented by additional disclosures from time to time.

These disclosures provide important information about certain designated instruments and transactions, including guidance on and warnings of the risks associated with them. They are designed to help you understand the nature and risks of the specific types of instruments, transactions, and services offered by Clear Junction, enabling you to make informed decisions.

Notwithstanding the foregoing, these disclosures are non-exhaustive and do not detail all risks arising in relation to all instruments, transactions, and services Clear Junction may offer. They should not be relied upon as a complete or definitive statement of all potential risks. You should not enter into any transaction or utilise any Clear Junction service unless you fully understand its nature, the contractual relationship into which you are entering and the extent of your exposure to risk and potential loss. You must independently satisfy yourself that such instruments, transactions, and services are appropriate and suitable for you in light of your own specific circumstances, objectives, and financial position. Where any doubt exists, you are strongly advised to seek independent professional advice.

By providing instructions to us after receipt of this notice, you will be taken to have acknowledged and accepted that you have been properly notified by Clear Junction of the risks listed herein and you acknowledge and accept that any one or more of these risks could lead to loss which could, in certain circumstances, exceed the initial value of your instrument/transaction and capital.

General Risks Overview

All financial products and services carry a degree of risk and even low-risk strategies contain an element of uncertainty. Prices may fluctuate, sometimes rapidly and unpredictably, and there is a risk that you may lose some or all of the value of your investment, instrument, or transaction. The types of risk involved can vary depending on several factors, including how the product or instrument is structured, the creditworthiness of the counterparty you are facing, the terms upon which you transact, and prevailing market conditions.

The nature of instrument/transaction risk varies with, amongst other things, the type of instrument/transaction, the location or domicile of the issuer, the diversification or concentration in a portfolio, the complexity of the transaction and/or the use of leverage. The price or value of an instrument/a transaction will depend on fluctuations in the financial markets and current performance, past performance or forecast performance are not a reliable indicator of future performance.

Types of risk that may impact the value of the instrument/transaction include, without limitation, liquidity risk, market risk, insolvency risk, credit risk, settlement risk, currency risk, operational risk, business risk, tax risk, regulatory risk, legal risk, interest rate risk, and/or other risks. Risks may occur simultaneously and may have an unpredictable effect on the value of the instrument/transaction.

Different instruments/transactions involve different levels of exposure to risk. In deciding whether to engage in such instruments/transactions, you should be aware of the following areas.

Specific Risk Categories

Digital Asset Risks

Transactions involving, linked to, or related to digital assets might carry unique and potentially heightened risks, including but not limited to the following:

Some types of Cryptocurrencies and digital assets are a highly volatile asset class and based on decentralised monetary protocols which are still in an experimental stage and subject to change at any time. Such assets are not backed by any government or central bank.
Digital assets can undergo or be subject to volatile market price swings or flash crashes, market manipulation and cybersecurity risks.
Digital assets can be unique in their features, functions, characteristics, operation and other properties which may be complex, technical or difficult to understand or evaluate.
Certain products referencing digital assets may have non-linear valuation which can gain or lose value rapidly depending on market conditions
Digital assets may be vulnerable to attacks on security, integrity or operation, including attacks using such computing power sufficient to overwhelm the normal operation of a digital asset blockchain or related technology.
Digital assets may also undergo changes or otherwise cease to operate as expected due to changes in their underlying technology or resulting from an attack. These changes could include a “fork,” a “rollback,” an “airdrop” or a “bootstrap.” Such changes may not be supported by us or a relevant exchange.
In certain market environments, you may find it difficult or impossible to liquidate a digital asset position at a reasonable price. This can occur where, for example, the market for a particular asset suddenly drops or trading is halted due to particular market events or changes to the digital assets themselves.
In addition to standard market risks, you may also experience loss due to one or more of the following: system failures, hardware failures, software failures, network connectivity disruptions and data corruption.
Digital assets that are pegged to the value of a currency may de-peg abruptly due to the reasons highlighted above, resulting in loss of value and potential further collateral calls.
The regulatory landscape for digital assets is immature and subject to change. Any regulatory action could negatively impact digital assets in various ways including restricting access to the same for certain persons or affecting the price and liquidity of digital assets.

It is important to note that, pursuant to current regulations, digital assets and associated activities within the United Kingdom do not fall within the scope of the Financial Ombudsman Service and are not covered by the Financial Services Compensation Scheme.

Please refer to the specific risks associated with the crypto-assets in relation to which Clear Junction is providing services