This Risk Disclosure Statement (“Statement”) provides the user (“User”) with information about the risks associated with trading in cryptocurrencies and services provided by National Digital Asset Exchange Inc. (“NDAX”, “our”, “we”, “us”). This Statement is not intended to disclose or discuss all of the risks associated with cryptocurrency trading, holding or other significant aspects of all transactions entered into through NDAX trading platform, but only outlines the general nature of risks. Therefore, user must ensure that their decision is made on a well-informed basis and as a minimum User should take into consideration information outlined below.
All Users and prospective Users are strongly advised to read carefully the Statement, before opening an account and executing trades on the NDAX exchange platform.
NDAX’s services are provided on an execution only basis. We do not provide investment advice in relations to buying and selling cryptocurrencies listed on https://NDAX.io (“Website”). The Website acts as the principal platform for trade execution for it’s User’s orders.
Trading in cryptocurrency investments and similar financial products is highly speculative and involves significant risk and may result in the loss of the total capital invested. This type of trading may not be appropriate for someone with limited resources and limited investment or trading experience and low risk tolerance. Users should have a solid understanding and willingness to assume the economic and other types of risk involved, be experienced and knowledgeable about trading in cryptocurrencies. Users should be able to bear the risk of potential losses up to the full amount of invested capital. Trading in cryptocurrencies carries a high level of risk, and as such, may not be suitable for all investors.
Before opening an account and trading in cryptocurrencies, the User must assess whether the product and/or services are appropriate for the User and if the User’s financial resources are adequate for the level of risk they are taking.
By opening an account with NDAX, the User is deemed to have evaluated and confirmed that they understand and accept the risks involved.
Users of NDAX’s services should consider the following risks prior to engaging in cryptocurrency trading which include, but are not limited to:
- Cryptocurrencies are complex and highly risky and as such, come with a high risk of losing all of the invested capital.
- Cryptocurrencies are highly volatile and widely fluctuate, which may result in a significant loss over a short period of time.
- Cryptocurrencies are not appropriate for all investors and therefore, Users should not trade in such products if they do not have the necessary knowledge and expertise.
- Users should always be fully aware and understand the specific characteristics and risks related to the cryptocurrency they are planning to trade.
- Any changes in laws and regulations may materially impact the cryptocurrency market.
Cryptocurrency trading involves a high level of risk and is traded at your own risk. The market for cryptocurrencies is still very new and presents many challenges. Market conditions can change significantly in a very short period of time. Under certain trading circumstances it may be difficult or impossible to liquidate a position. Any cryptocurrency can be delisted at any time and without notice or consent. Cryptocurrency markets are very unpredictable and can move up or down as a whole and/or any particular currency can move independently and can lose all or substantial value of the funds originally invested. Any data available on the past performance does not guarantee future results.
There are risks related with holding long cryptocurrency positions. Being long means that you are buying cryptocurrencies on the market by speculating that the market price of the underlying asset will rise between the time of purchase and the time of sale. As the owner of a long position, you may make a profit if the market price of the underlying asset rises. You may also suffer a loss if the underlying asset decreases in value.
The majority of User orders executed on the NDAX trading platform are entered as a Market Order and are executed immediately. Once Users enter all the required information and submit the order there will be no opportunity to review, modify or cancel the order.
The NDAX trading platform provides you with advanced trading tools, which may help reduce potential losses or secure unrealized gains, such as: Limit, Stop, Stop Limit, Trailing Stop and Fill or Kill order entry options. These options cannot always protect you from all future losses, but they can limit the potential losses (if used correctly), that you may incur from holding a long position. If activated, a trade will automatically be executed, as per your instructions, potentially limiting some of your losses. Trading online, no matter how convenient or efficient, does not necessarily reduce risk associated with cryptocurrency trading.
It is very important that the User monitors all their positions closely and failure to do so entails some degree of risk. It is the sole responsibility of the User to monitor their positions and have ability to access their account.
When trading in cryptocurrencies and similar products, Users must ensure they fully understand any risks involved and seek independent advice if necessary, taking into consideration investment objectives, level of experience and risk tolerance. Users should not risk more than the User is prepared to lose. Never risk medical and other emergency funds, retirement savings, nor funds set aside for purposes such as home ownership or any funds required to meet living expenses.
Information provided on the Website is for informational purposes only and is not, nor intended to be investment advice or trading recommendations. Such information is not, and should not be considered as an offer to buy or sell, or solicitation of an offer to buy or sell any cryptocurrencies. The User’s decision as to whether such transaction is appropriate, is the User’s independent decision. NDAX is not acting as an advisor or serving as a fiduciary to the User. Users are responsible for managing their own tax affairs and seeking independent professional advice.
Some transactions may be executed in a currency which may be different from the currency the User deposited to their account, and accordingly the User should be aware of the relevant currency fluctuation and any risks related to it. In respect to any foreign exchange transaction, a movement in an exchange rate may have a favourable or an unfavourable effect on the gain or loss achieved on such transaction.
There are risks associated with system failures. All trading is carried out through NDAX’s online platform. We use industry standard technology and best security measures, Users should be aware that failure, malfunctions or disruptions of any transmission, communication system, computer facility or trading software may occur, this may result in an order being delayed or failure to complete an order.
Should a price quoting error occur, NDAX is not liable for any resulting errors in account balances and reserves the right to make necessary corrections or adjustments to the relevant account. Any dispute arising from such price quoting errors will be resolved based on the fair market value, as determined by NDAX in its sole discretion and acting in good faith, of the relevant market at the time such an error occurred. In cases where the prevailing market represents prices different from the prices we have posted on our platform, NDAX will attempt, on a best efforts basis, to execute orders on or close to the prevailing market prices. This may or may not adversely affect the User’s realized and unrealized gains and losses.
Legal and regulatory changes made by the government or a regulatory body may increase the costs of operating a business, reduce attractiveness of an investment or change the competitive landscape and as such can affect the overall potential for profit. This risk is unpredictable and may vary significantly.
There are no guarantees of profit nor of avoiding losses when trading in cryptocurrencies. The User has been alerted by means of this Statement that risks are inherent to trading cryptocurrencies and that they must be financially able to bear such risks and withstand any losses incurred.
User funds are held in a segregated bank account at a reputable Canadian banking institution, separately from NDAX’s operating capital. No interest is due or will be paid with respect to a User’s funds.
By opening and operating an account with NDAX, Users declare that they are aware and understand the risks related to trading in cryptocurrencies. The User acknowledges that they are willing and able, financially and otherwise, to assume these risks and that the loss of the User’s entire account balance will not be detrimental to their lifestyle.
This Risk Disclosure Statement was last updated on May 14, 2018.