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Risk Disclosure Statement
Spot trading or leveraged trading in Virtual Assets, Futures, Perpetual Swaps, Options and/or other Virtual Asset Derivatives (“Trading”) carries a high level of risk to your capital. Trading is not suitable for everyone and may result in losses that are greater than your deposits. You should only trade with money you can afford to lose.
This Risk Disclosure Statement (this “Statement”) provides you with a non-exhaustive overview of the key risks that you should take into account when deciding whether to open an Account and purchase, sell and/or trade Virtual Assets, Futures, Perpetual Swaps, Options and/or other Virtual Asset Derivatives through the Services. This Statement does not explain all of the risks involved in Trading or how the risks relate to your personal circumstances. It is important that you read and understand the relevant legal documentation to fully be aware of the risks involved according to your personal circumstances before deciding to open an Account and access and/or use the Services. We recommend that you seek independent advice if you are unsure.
In consideration of Power Fintech LLC ("we", "our", "us", "PowerTrade") agreeing to provide Services to the Customer, the Customer acknowledges, understands and agrees that:
1. NO GUARANTEE OF PROFITS
PowerTrade provides no guarantees of profit nor of avoiding losses when Trading. Customer has received NO guarantee from PowerTrade or from any PowerTrade Entities. Customers are aware of the risks inherent in trading and are financially able to bear such risks and withstand any losses incurred.
2. NO INVESTMENT, FINANCIAL, LEGAL, REGULATORY OR TAX ADVICE
Our Services are provided on an execution-only basis. You are solely responsible for any decisions that you make in relation to the Virtual Assets, Futures, Perpetual Swaps, Options and/or other Virtual Asset Derivatives purchased, sold and/or traded through our Services.
PowerTrade is not an investment, financial, legal or tax advisor nor do we provide any investment, financial, regulatory, tax or legal advice. In certain cases, we may provide you with general factual information about the market and our Services. Any information and analysis provided by us is general in nature, and purely for informational purposes, and does not take into account the Customer’s personal objectives, financial situation, investment risk profile or needs. Furthermore, you must not regard any of the information that we provide to you as an investment recommendation or an offer to make a transaction.
Do not invest with money or Virtual Assets you cannot afford to lose. Trading carries a high degree of risk and due to fluctuations in value, the Customer may not get back the amount invested, or you may lose a substantial proportion or all of your capital. Virtual Assets, Options, and Virtual Assets Derivatives are not suitable for everyone. You should carefully consider whether you can afford to bear the risks of loss involved in using the Services and, in particular, trading Virtual Assets, Options, and Virtual Assets Derivatives.
Virtual Assets, Futures, Perpetual Swaps, Options and/or other Virtual Asset Derivatives are not suitable for an investor seeking an income from their investments, as the income from such investments may fluctuate in value in money terms.
If you decide to continue and open an Account and use the Services, you are confirming that you are aware of and understand the risks.
4. THE TRADING PLATFORM
The Customer is warned, and the Customer agrees and understands that when trading in an electronic platform he assumes risk of financial loss which may be a consequence of amongst other things: i) Failure of Customer’s devices, software and poor quality of connection; ii) PowerTrade or Customer’s hardware or software failure, malfunction or misuse; iii) Improper work of Customer’s equipment; iv) Wrong setting of Customer’s Terminal; and/or v) Delayed updates of Customer’s Terminal.
5. GENERAL TRADING RISKS
Virtual Asset prices are highly volatile and trading in Virtual Assets is extremely risky. In addition, several factors may affect market liquidity for a particular Virtual Asset, such as regulatory activity, market manipulation, the acts or omissions of the issuer of the Virtual Asset, or unexplainable price volatility. Virtual Assets are decentralized and non-regulated, which means that there is no central bank that can take corrective measures to protect the value of a Virtual Asset in a crisis or issue more Virtual Assets. As a result, Virtual Currency trading involves a high risk of loss of funds over a short period of time due to high market volatility, execution issues and industry-specific disruptive events, including, but not limited to, discontinuation, regulatory bans and other malicious actors within the Virtual Assets industry.
Virtual Asset Trading Platforms could provide incorrect, delayed, or otherwise flawed data for a variety of reasons, including as a result of software bugs and the limited oversight on markets for Virtual Assets. Such poor data could misinform the Customer trading strategies or engender inaccurate price discovery mechanisms. Errors, fraud, and other issues with Virtual Asset Trading Platforms have resulted in extensive, irretrievable losses on multiple occasions in the recent past. The underlying software and mechanisms for the Virtual Asset Trading Platforms could malfunction, executing trades for Customers at faulty prices and adversely affecting the Customer investments. In general, errors and unreviewable decisions by Virtual Asset Trading Platforms could adversely impact the value of the investment of the Customers.
It is important that you comprehend the risks associated with trading on a market as fluctuations in the price of the underlying spot market will have an effect on the profitability of the trade.
When Trading, Slippage may occur. Slippage is the difference between the expected price of a Transaction, and the price the Transaction is actually executed at. Slippage often occurs during periods of higher volatility (for example due to news events) making an Order at a specific price impossible to execute, when market orders are used, and also when large Orders are executed when there may not be enough interest at the desired price level to maintain the expected price of the trade. Furthermore, prices displayed on the Trading Platform are solely an indication of the executable rates and may not reflect the actual executed or executable price of an order due to issues related to latency in the prices provided and connectivity issues. It is important that you comprehend that when placing an order, your order may not be filled at the quoted price.
By using the Services, you accept the risk of trading Virtual Assets, Futures, Perpetual Swaps, Options and/or other Virtual Asset Derivatives. In entering into any transaction, you represent that you have been, are, and will be solely responsible for making your own independent appraisal into the risks of the transaction and the underlying Virtual Asset.
6. LIQUIDITY RISKS
Trading in Virtual Assets, Futures, Perpetual Swaps, Options and/or other Virtual Asset Derivatives is riskier, less liquid and more volatile. The liquidity of the markets on the Trading Platform will depend on, among other things, supply and demand on the Trading Platform and the interest in these markets. There is a risk that there may be limited volume and liquidity which may result in delays in order execution, and potentially, some orders may not be executed.
7. VIRTUAL ASSET PRICING RISKS
PowerTrade may use its own or a third-party methodology for calculation of Virtual Asset prices, which may differ from publicly-reported prices from other sources. The methodology and the sources for calculating the Virtual Asset prices may be subject to change at any time without notice in PowerTrade’s sole and absolute discretion. The change of methodology and sources for calculating Virtual Asset prices may affect the published prices, and therefore, may affect the profitability or losses of your trades. PowerTrade is not responsible or liable for any direct or consequential losses a Customer may incur as a result (directly or indirectly) of a change in the methodology and the sources for calculating the Virtual Asset prices.
8. OPTIONS TRADING RISKS
At Expiration Date, Options that are ITM will be automatically closed out at intrinsic value, that is, in the case of Call Options, the amount by which the closing price of the specified Virtual Asset exceeds the Strike Price, and in the case of Put Options, the amount by which the Strike Price exceeds the closing price of the specified Virtual Assets. For long Call and short Put positions, the closing price will be the prevailing bid price of the underlying Virtual Asset at Expiration Date; and for short Call and long Put positions, the closing price will be the prevailing ask (offer) price of the underlying Virtual Asset, as determined by PowerTrade in its sole discretion. Options that are not ITM will expire worthless.
9. LEVERAGED TRADING RISKS
Leveraged Trading means that both profits and losses can be magnified, and you could incur very large losses if your position moves against you. You may even suffer losses that exceed the amount you deposited as Margin and your failure to maintain a sufficient amount of Margin may result in the forced-liquidation of your positions.
Before you open a Leveraged Trading position, we require you to deposit an initial Margin and, in order to keep a Transaction open, you must ensure that the amount in your Margin Account exceeds the Minimum Margin Requirement. This means that you will be trading using ‘leverage’ or 'gearing' and this can work for or against you; a small price movement in your favour can result in a high return on the initial Margin placed for the trade, but a small price movement against you may result in substantial losses.
Leveraged Trading means you can secure a significantly larger exposure to an underlying asset for a relatively small initial Margin. However, the use of leverage magnifies the size of your trade, which means your potential gain and your potential loss are equally magnified. Therefore, you should closely monitor all of your open positions to manage the risk of large losses.
We will require you to ensure that the amount in your Margin Account exceeds the Minimum Margin Requirement in order to keep a Financed Trading position open. Therefore, if our price moves against you, you may need to provide us with substantial additional Margin, at short notice, to maintain your open positions. If you do not do this, we will be entitled to liquidate one or more or all of your trades. You will be responsible for any losses incurred.
You should also be aware that under the Terms we are entitled, at our sole discretion, to make a Margin Call, and that you are required to satisfy any Margin Calls immediately, by any applicable means in the time prescribed by us. If you do not do this, we will be entitled to liquidate one, or more, or all of your trades.
10. ACCOUNT WALLET RISKS
You are responsible to use the correct blockchain address of your virtual asset wallet address or addresses associated with your Account (the “Account Wallet”) for any deposit, or transfer, and that the address you use is compatible with the Virtual Asset you are depositing, or transferring. Any inaccuracy in an Account Wallet or in the Virtual Asset that you attempt to transfer, may result in total loss of the Virtual Asset concerned.
Furthermore, Virtual Assets transferred to or held in the Account Wallet are not insured by any Government Agency or public authority, and are not covered by any deposit protection schemes. Furthermore, they are segregated from, and may be commingled with, other Customers’ Virtual Assets. PowerTrade does not have any trust, fiduciary, or other custodial relationship with you. Your Wallet Account balances (including both deposits, trading profits or any other Virtual Assets kept in your Account Wallet) are not insured, and therefore they are at a risk of total loss, from, among others things, security breaches (whether in respect of your accounts specifically or the Services), electronic, technological or systems failures, and PowerTrade insolvency or bankruptcy, or equivalent formal proceedings.
11. OPERATIONAL RISKS
Operational risks with PowerTrade on your computer are inherent in every transaction. For example, disruptions in PowerTrade's operational processes such as communications, computers, computer or mobile networks or external events may lead to delays in the execution and settlement of a transaction. PowerTrade does not accept or bear any liability whatsoever in relation to the operational processes of PowerTrade, except to the extent that it is caused by the fraud, negligence or dishonesty by PowerTrade.
In connection with the use of computer equipment and data, the Customer bears certain risks amongst other risks, in which cases PowerTrade has no liability of any resulting loss, including but not limited to i) Power cut of the equipment on the side of the Customer or the provider; ii) wrong or inconsistent with requirements settings of the Customer Terminal; or iii) Untimely update of the Customer Terminal. The Customer may suffer financial losses caused by the materialization of these risks, PowerTrade does have no responsibility or liability in the case of such a risk materializing and the Customer shall be responsible for all related losses he may suffer.
12. REGULATORY RISKS
Neither PowerTrade nor the Services are regulated or supervised by any regulatory body. You understand your responsibility to make sure that you comply with any and all laws, regulations, directives, restrictions of your place or places of residence before using our Services. Our Services shall not be accessed or used, and we do not offer or solicit the access or use of the Services, in jurisdictions in which the Services are not permitted (including, without limitation, Prohibited Jurisdictions).
Regulation of Virtual Assets, Virtual Asset Derivatives, Virtual Asset service providers, and blockchain technologies, which include PowerTrade Services lack uniformity and are unsettled in many jurisdictions. These regulations are evolving rapidly, are subject to significant variation among international jurisdictions and are generally subject to significant uncertainty. PowerTrade may receive queries, notices, warnings, requests or rulings from one or more regulatory authorities from time to time, or may even be ordered to suspend or discontinue any action in connection with the Services. There is no guarantee that new laws or regulations or new enforcement or interpretation of current laws or regulations will not adversely affect Virtual Assets, Options or Virtual Assets Derivatives, the Services, the price and liquidity of the Virtual Assets, Options or Virtual Assets Derivatives traded through the Trading Platform. Furthermore, PowerTrade may limit the availability of the Services to certain persons based on their citizenship, residence or location from engaging in any transactions, which may also negatively affect the aforementioned price and liquidity of the Virtual Assets, Options or Virtual Assets Derivatives traded through the Trading Platform.
13. CYBERSECURITY RISKS
There have been many documented incidents of thefts and attempted thefts of Virtual Assets and Virtual Assets Trading Platforms. PowerTrade may hold large amounts of Virtual Assets, including Customers’ Assets. This may make such entities the target of cryptocurrency thieves and scammers. Due to the rapidly evolving nature of cryptocurrency, there likely will always be a risk of vulnerability to theft even with adherence to security best practices. There can be no guarantee that PowerTrade will not be a victim of Virtual Asset theft, the result of which may adversely affect the Customers, including a loss of the Virtual Assets held in their Account Wallet.
Furthermore, cyberattacks, including but not limited to malware attacks, denial of service attacks, coordinated attacks and account takeovers may negatively affect the Services, and the value of Virtual Assets, Options or Virtual Assets Derivatives traded through the Services. Cyberattacks may also lead to unauthorized access to Accounts or PowerTrade’s systems for misappropriation of assets or sensitive information, corrupting data, or causing operational disruption. Cyberattacks to third party service providers could substantially affect the Services.
You are responsible for maintaining adequate security and control of any and all user IDs, passwords that you use to access the Services. You are strongly encouraged to use two-factor authentication in accessing the Website and the Services, and may adjust their security features in their user settings. If you suspect or become aware of any unauthorized use of your Account, you should notify PowerTrade immediately. PowerTrade assumes no liability for any loss or damage arising from the access and/or use of your Account by you or any third party with or without your authorization.
14. INSOLVENCY RISK
Our insolvency or default may lead to positions being liquidated or closed out without your consent. In certain circumstances, you may not recover the Virtual Assets held in your Account.
15. FISCAL RISK
There is a risk that the Customer’s trades through the Services may be or become subject to tax and/or any other duty for example, due to changes in legislation or Customer's personal circumstances. PowerTrade does not offer tax advice, and the Customer is responsible for any taxes and/or any other duty which may accrue in respect of his trades through the Services.
Furthermore, tax laws and regulations are highly complex and subject to interpretation, especially when cross-border transactions and multiple tax jurisdictions are involved. Consequently, PowerTrade are subject to changing tax laws, treaties and regulations. If any tax authority successfully challenges the operational structure of PowerTrade, or PowerTrade loses a material tax dispute, the PowerTrade tax liabilities could increase substantially. This could cause PowerTrade financial resources to be constrained or impaired. This in turn could negatively affect the availability and/or provision of the Services.
16. ACCURACY OF INFORMATION
Although we use our best efforts to keep the information related to the Services as accurate, complete and up to date as possible, there is a risk that the information related to the Services may not be accurate, complete or up to date.
17. FORCE MAJEURE EVENTS
In case of a Force Majeure Event, PowerTrade may not be in a position to arrange for the execution of Customer Orders or fulfil its obligations under the Terms of Service with the Customer. As a result the Customer may suffer financial loss. PowerTrade will not be liable or have any responsibility for any type of loss or damage arising out of any failure, interruption, or delay in performing its obligations under the Terms where such failure, interruption or delay is due to a Force Majeure event.
18. SCHEDULE OF FEES
Our schedule of fees is published on our Website, and can be found here. Minimum charges can be relevant for smaller trade sizes and there are also charges associated with Financed Transactions. Furthermore, our Schedule of Fees may change at any time, at our discretion.