Risk Notice (EEA)

IMPORTANT NOTICE: The value of your Crypto-Assets can go down as well as up. You may lose all the money you invest. Crypto-Asset services are not covered by standard consumer protection schemes in the same way as traditional banking or investment services.

1. General Risk Warning

At Damex.io, we are committed to high standards of governance and transparency. However, we must ensure all clients fully understand the high-risk nature of the services provided.

Crypto-Assets are highly volatile. Unlike traditional currencies or financial instruments, the value of Crypto-Assets is not guaranteed by any central bank or public authority.

  • Total Loss: There is an inherent risk that you may lose all or a significant portion of the value of your Crypto-Assets.
  • Volatility: Prices can fluctuate wildly in very short timeframes due to market sentiment, regulatory changes, or technical failures.
  • No Protection: Crypto-Assets are not covered by the Deposit Guarantee Schemes (DGS) or Investor Compensation Schemes (ICS) that protect traditional bank deposits or regulated investments.

2. Regulatory Status & Jurisdiction

You should be aware that:

  • Crypto-Assets remain largely unregulated in many other jurisdictions.
  • Cross-border regulatory protections may not apply.
  • You are responsible for understanding the tax implications and legal status of holding Crypto-Assets in your specific jurisdiction.

3. Technology and Protocol Risks

Crypto-Assets are based on decentralized technologies (blockchain) which are subject to specific technical risks:

  • Forks: The underlying protocols are often open source and subject to changes in operating rules (known as 'forks'). These forks can materially affect the value, function, or even the name of a Crypto-Asset. Damex does not control these protocols.
  • Irreversibility: Transactions on the blockchain are generally irreversible. If you send assets to the wrong address, they may be lost permanently.
  • Cyber Security: While we utilize advanced security measures, the sector is a target for malicious actors. There are risks associated with hot wallets (internet-connected storage), hacking, phishing, and software vulnerabilities.

4. Market Risks and Liquidity

  • Liquidity Risk: There may not always be a buyer for your assets. During periods of high demand or technical stress, liquidity may dry up, making it difficult or impossible to sell your position.
  • Market Sentiment: The market is susceptible to bubbles and loss of confidence (FUD). Confidence can collapse due to unexpected software changes, regulatory crackdowns, or negative publicity regarding other industry players.

5. Specific Risks Regarding Stablecoins

Asset-Referenced Tokens & E-Money Tokens

Damex offers trading in 'Stablecoins' that are also referred to as Electronic Money Tokens ('EMTs') or Asset-Referenced Tokens ('ARTs'). While these aim to maintain a stable value, they carry specific risks:

  • De-pegging: There is no guarantee that a stablecoin will maintain its peg (e.g., 1:1 with the USD or EUR). A stablecoin may lose its value relative to the pegged asset.
  • Issuer Risk: Stablecoins are issued by private entities, not central banks. You are dependent on the issuer's ability to redeem the tokens. Damex is not the issuer of these tokens and makes no representation regarding the adequacy of the issuer's reserves.
  • Redemption Rights: Your claim for redemption is generally against the issuer of the stablecoin, not Damex.

6. Suitability and Appropriateness

Trading Crypto-Assets is not suitable for everyone. It should not be viewed as a lifestyle choice but as a high-risk financial decision.

  • You should only invest capital that you can afford to lose.
  • You should ensure that trading Crypto-Assets aligns with your financial situation and risk appetite.
  • Damex reserves the right to refuse services to individuals where we deem the risk appropriateness to be insufficient.

7. Third-Party and Exchange Risks

Where Damex facilitates orders through third-party exchanges or liquidity providers:

  • We are not responsible for the operational failures of third-party exchanges.
  • External exchanges may experience downtime, freezing of funds, or insolvency, which may delay or prevent the settlement of your trades.