Cryptocurrency Risk Summary
Introduction
This document outlines the key risks associated with cryptocurrency transactions and investments. My Digital Finance OÜ markets cryptocurrency services that are provided through our branded platform. Crypto currencies are considered high-risk investments, and this summary is designed to help you make informed decisions when engaging with these digital assets.
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1. Key Risks of Cryptocurrency Investments
1.1 Volatility and Capital Loss Risk
Cryptocurrencies are highly volatile financial instruments. Their value can fluctuate dramatically over short periods, potentially resulting in significant financial losses. The cryptocurrency market operates24/7 and can be influenced by various factors including regulatory announcements, technological developments, market sentiment, and macroeconomic trends.
Important Notice: You could lose all the money you invest in cryptocurrencies. Customers should be prepared for the possibility of losing the full value of their cryptocurrency investments.
1.2 Limited Regulatory Protection
The broader cryptocurrency market remains largely unregulated compared to traditional financial markets. This limited regulatory oversight means:
● Cryptocurrency investments are not recognized as "specified investments" under many regulatory frameworks
● They are typically not covered by financial compensation schemes
● Poor investment performance or losses related to cryptocurrencies are typically not covered by standard dispute resolution mechanisms
1.3 Liquidity Risks
Liquidity in cryptocurrency markets can vary significantly, which may affect your ability to buy or sell assets when desired:
● There is no guarantee that you will be able to sell your cryptocurrencies when desired
● Market conditions, including supply and demand,directly impact liquidity at any given time
● Operational delays, technology outages, orcyber-attacks may delay transactions
● Some staking activities may involve lock-upperiods during which assets cannot be sold
1.4 Operational Risks
The technological nature of cryptocurrencies introduces specific operational risks:
● Technology outages, cyber-attacks, or operational failings may delay or prevent transactions
● Security breaches could potentially result inloss of assets
● Software updates or "forks" inblockchain networks may impact asset values or accessibility
● Smart contract vulnerabilities could lead tounexpected losses
1.5 Complexity of Cryptocurrencies
Cryptocurrency investments can be complex and difficult to fully understand:
● Different cryptocurrencies have varying technological foundations, use cases, and risk profiles
● The underlying technology and economic models can be challenging to evaluate
● Novel financial products built oncryptocurrencies (such as DeFi protocols) may introduce additional layers ofcomplexity and risk
1.6 Investment Concentration Risk
Concentrating investments in cryptocurrencies significantly increases risk exposure:
● We recommend diversifying investments across different asset classes
● It is advisable not to allocate more than 10% ofyour investment portfolio to high-risk investments like cryptocurrencies
● Different cryptocurrencies carry different riskprofiles; research each asset thoroughly before investing
2. Risk Variance Among Cryptocurrencies
Not all cryptocurrencies carry the same level of risk. Factors affecting risk include:
● Market capitalization and trading volume
● Technology maturity and security record
● Development team experience and reputation
● Regulatory status in different jurisdictions
● Use case viability and adoption metrics
We recommend reviewing cryptocurrency-specific performance statistics available on the platform and conducting additional research to understand the unique risks associated with each digital asset.
3. Education and Resources
We encourage all customers to educate themselves aboutcryptocurrencies and their associated risks before investing. For more information,please consult resources provided by relevant financial regulatory authoritiesin your jurisdiction.
4. Disclaimer
Cryptocurrency investments are high-risk and may not be suitable for all investors. This summary provides a general overview of risks and does not constitute financial or investment advice. Customers are responsible for making informed decisions and should consult professional advisers where necessary.
Past performance is not indicative of future results. The value of cryptocurrencies can go down as well as up, and you may not recover the amount of your original investment.
This document is provided for informational purposes only and does not constitute financial, investment, tax, or legal advice. My Digital Finance OÜ markets services provided by a regulated platform operator. Users accessing services through My Digital Finance OÜ will be subject to the terms, conditions, and policies of the regulated platform operator.
Last Updated
Last updated: 27/05/2025
This document is reviewed regularly to ensure accuracy and compliance with current regulations and platform policies. Users should checkback periodically for updates.
⚠️ **Important Risk Warning**: Cryptocurrency trading involves significant risk. Read our full Cryptocurrency Risk Summary before proceeding.
