Levex Risk Disclosure Statement

Last Updated: October 25th, 2024

IMPORTANT 

To better safeguard your interests, Levex reminds you that trading and/or investing in the cryptocurrency market is subject to severe risks. By participating in these activities you risk losing ALL OR SUBSTANTIALLY ALL OF YOUR ASSETS. Please understand and evaluate the risk of trading and assess your risk tolerance carefully before conducting any cryptocurrency trading or investment activities.

For full terms of service and platform responsibilities, see our Terms of Use and Privacy Policy.

Interpretation

A) All terms used in this notice, which are defined in Levex User Agreement (the 'User Agreement'), shall have the same meaning and construction as in the User Agreement.

B) This Risk Disclosure Statement (the "Statement") shall form part and parcel of the Legal Documents and shall have the same effect thereto.

Levex Services

A) This Statement provides you with information about the risks associated with Levex Services. Each Levex Service has its own distinct risks, which may be separately contained under the corresponding Legal Documents. This Statement provides a non-exclusive, general disclosure of the risks involved when you use Levex Services.

B) This Statement does not explain all of the risks or how such risks relate to your personal circumstances. It is important that you fully understand the risks involved before making a decision to use Levex Services.

No Advice

We do not provide advice in relation to our products or Services. We sometimes provide factual information, information about transaction procedures and information about the potential risks. However, any decision to use our products or Services is made by you. No communication or information provided to you by us is intended as, or shall be considered or construed as, investment advice, financial advice, trading advice, or any other sort of advice. You are solely responsible for determining whether any investment, investment strategy or related transaction is appropriate for you according to your personal investment objectives, financial circumstances and risk tolerance.

No Monitoring

Levex is not your broker, intermediary, agent, or advisor and has no fiduciary relationship or obligation to you in connection with any trades or other decisions or activities undertaken by you using Levex Services. We do not monitor whether your use of Levex Services is consistent with your financial goals and objectives. It is up to you to assess whether your financial resources are adequate to engage in financial activity with us, and to your risk appetite in the products and Services you use.

No Tax, Regulatory or Legal Advice

The taxation of Digital Assets is uncertain and may vary from locations to locations. You have sole responsibility for determining what taxes you might be liable to, how and when they apply, and meeting such tax obligations, when transacting through Levex Services. It is your responsibility to report and pay any taxes that may arise from using Levex Services, and you acknowledge that Levex does not provide legal or tax advice relative to these transactions. If you have any doubts about your tax status or obligations when using Levex Services, or with respect to the Digital Assets held in your Levex Account, you are encouraged to seek independent advice.

You acknowledge that, when, where and as required by applicable law, Levex shall report information regarding your transactions, transfers, distributions or payments to tax or other public authorities. Similarly, when, where and as required by applicable law, Levex shall withhold taxes related to your transactions, transfers, distributions or payments. Applicable laws could also prompt Levex to request that you provide additional tax information, status, certificates or documentation or other information. You acknowledge that failure to comply with these requests within the specified timeframe, may result in taxes withheld by Levex, to be remitted to tax authorities as defined by applicable law. You are encouraged to seek professional and personal tax advice regarding the above and before entering into any transaction.

Market Risks

Digital Asset trading is subject to severe market risk and price volatility. Changes in value may be significant and may occur rapidly and without warning. Past performance is not in anyway an indicator of future performance. The value of an investment and any returns can go down as well as up. You may not get back the amount you have invested, and there is severe risks of losing all of your assets.

An investment in Digital Assets carries significant risk. The value of an investment and any returns can go up or down, and you may lose all or part of your investment and not get back the amount you had invested. If you are new to Digital Assets, consider investing only a small amount. Only invest what you can afford to lose. It is important to do your own research to understand the risks of investing in Digital Assets.

Digital Asset trading is speculative, prices are volatile and market movements are difficult to predict. Supply and demand for Digital Assets can change rapidly without warning and can be affected by a variety of factors which may not be predictable, including regulation, general economic trends and developments in the Digital Asset ecosystem. All investments in Digital Assets carry the risk of loss.

Past performance is not an indicator of future performance. Levex does not in any way guarantee or provide any assurance about the performance or market price of Digital Assets or products available through the Levex Services.

The Digital Asset industry is subject to systemic and systematic risk. Systemic and systematic risks are both threats to the Digital Asset markets and economy, but the cause of these risks and the approaches for managing them are different. Systemic risk is the risk that a company or industry-level risk could trigger a major collapse. Systematic risk is the risk inherent to the entire market, which can be economic, sociopolitical, technological, or natural in origin. These risks can affect the prices of Digital Assets.

Blockchain technology is a relatively new technology that is evolving rapidly and is likely to be subject to continued technological development.  The future development and growth of the Digital Asset industry is subject to a variety of factors that are difficult to predict and evaluate. Similarly, the sustainability of Digital Asset networks may also be affected by a range of different factors.  All such factors may impact the value of a Digital Asset.

Negative perceptions about Digital Assets may reduce the confidence of investors in the industry and result in greater volatility of the prices in Digital Assets, including possibly a significant depreciation in value. Any events that trigger negative publicity in respect of Digital Asset markets may therefore have an adverse impact on the value of any investment in Digital Assets.

Counterparty Risk

You may be exposed to counterparty risk in various circumstances when using Levex Services. This may include, without limitation, if a market maker or liquidity provider faces issues which could result in slippage or an inability to execute trades; failures by or disputes with payment processors which may delay deposit and withdrawal transactions; borrowers defaulting on their repayment obligations which may delay the redemption of deposits from certain products. 

In such other exceptional circumstances, your holdings and your ability to transact or deal with your holdings, may be adversely affected which may result in a range of outcomes including, without limitation, transactions not completing as expected, trading costs being irrecoverable, loss of profits, inability to acquire or dispose of assets at the desired time or price.

Liquidity Risks

Digital Asset prices on the secondary market are driven by supply and demand and may be highly volatile. Digital Assets may have limited liquidity which may make it difficult or impossible for you to sell or exit a position when you wish to do so. This may occur at any time and from time to time, including at times of rapid price movements.

Availability Risks

We do not guarantee that Levex Services will be available at any particular time or that Levex Services will not be subject to unplanned service outages or network congestion. It may not be possible for you to buy, sell, store, transfer, send or receive Digital Assets when you wish to do so.

When a Digital Assets project party faces bankruptcy, liquidation and dissolution, or violates national laws & regulations, or under the request of the project party, Levex will delist such Digital Assets, which may cause losses for Users.

There are legal requirements in various countries which may restrict the products and Services that Levex can lawfully provide. Accordingly, some products and services and/or certain functionality of Levex Platform may not be available or may be restricted in certain jurisdictions or regions or to certain Users and any Levex marketing campaign, activities, or other promotions will not be open to (and are not targeted at or intended for) Users to whom restrictions apply. Users are responsible for informing themselves about and observing any restrictions and/or requirements imposed with respect to the access to and use of Levex Platform and the corresponding Services in each jurisdiction from which the Platform and the corresponding Services are accessed by or on behalf of the User. Levex reserves the right to change, modify or impose additional restrictions with respect to the access to and use of the Platform and/or the corresponding Services from time to time in its sole discretion without notification.

Third Party Risks

Third parties, such as payment providers, custodians, and banking partners may be involved in the provision of Levex Services. You may be subject to the terms & conditions of these third parties. Levex shall not be held responsible for any loss that these third parties may cause to you.

Security Risks

The nature of Digital Assets exposes them to an increased risk of cyberattack. It is not possible for Levex to eliminate all security risks. There can be no guarantee that systems in place to mitigate cybersecurity threats will always be effective to prevent improper access to the Platform and Digital Assets. 

You are responsible for keeping your Levex Account password safe, and you may be responsible for all the transactions under your Levex Account, whether you authorized them or not. Transactions in Digital Assets may be irreversible, and losses due to fraudulent or unauthorized transactions may not be recoverable.

Risks Related to Digital Assets Themselves

Given the nature of Digital Assets and their underlying technologies, there are a number of intrinsic risks, including but not limited to:

1. faults, defects, hacks, exploits, errors, protocol failures or unforeseen circumstances occurring in respect of a Digital Asset or the technologies or economic systems on which the Digital Asset rely;

2. transactions in Digital Assets being irreversible. Consequently, losses due to fraudulent or accidental transactions may not be recoverable;

3. technological development leading to the obsolescence of a Digital Asset;

4. attacks on the protocol or technologies on which a Digital Asset depends, including, but not limited to: i. distributed denial of service; ii. sybil attacks; iii. phishing; iv. social engineering; v. hacking; vi. smurfing; vii. malware; viii. double spending; ix. majority-mining, consensus-based or other mining attacks; x. misinformation campaigns; xi. forks; and xii. Spoofing;

5. network delays causing transactions to not be settled on the scheduled delivery date;

6. a hard fork may occur if Digital Asset developers suggest changes to a particular Digital Asset software and the updated software is not compatible with the original software and a sufficient number (but not necessarily a majority) of users and minors elect not to migrate to the updated software. This would result in two versions of Digital Asset networks running in parallel and a split of the blockchain underlying the Digital Asset network, which could impact the demand of the Digital Asset and adversely impact the price of the Digital Asset;

7. g) certain addresses on the blockchain networks hold a significant amount of the currently outstanding asset on that network. If one of these addresses were to exit their positions, this may result in volatility that could adversely affect the price of that asset;

8. if anyone gains control of over 51% of the computing power (hash rate) used by a blockchain network, they could use their majority share to double spend their Digital Assets. Whilst the risk of this occurring for networks with wider adoption is remote, if such a “51% attack” were to be successful, this would significantly erode trust in public blockchain networks (like Bitcoin and Ethereum) to store value and serve as a means of exchange, which may significantly decrease the value of Digital Assets;

9. Digital Assets are subject to the risk of fraud or cyber attacks; 

10. Digital Assets purchased and held in an account with Levex are not covered by any external investor compensation, customer asset protection, deposit protection, insurance or other similar schemes; and

11. new risks may arise from investing in new types of Digital Assets or market participants’ engagement in more complex transaction strategies. Digital Assets and the Digital Asset market is subject to speculative interest, rapid price swings and uncertainty.

Monitoring Risks

Digital Asset markets are open 24 hours a day, 7 days a week. Rapid price changes may occur at any time, including outside of normal business hours. You are solely responsible to ensure constant monitoring of the Digital Asset markets.

Communication Risks

When you communicate with Levex via electronic communication, you should be aware that electronic communications can fail, can be delayed, may not be secure and/or may not reach the intended destination.

Currency Risks

Currency exchange fluctuations will impact your gains and losses.

Legal and Regulatory Risks

Most Digital Assets operate without a central authority and are generally not backed by any government or authority. Changes in laws and regulations may materially affect the value of Digital Assets. This risk is unpredictable and may vary from market to market. Also, you may suffer severe losses if your actions breached national laws or regulations.

Further, Digital Assets may not be considered “property” under applicable laws in some jurisdictions. This may affect the nature and enforceability of your interest in the Digital Assets.

Legislative and regulatory changes may adversely affect or restrict (as applicable) the use, transfer, exchange and value of Digital Assets, as well as the provision of the Levex Services in certain jurisdictions. Legislative and regulatory changes may occur quickly and without prior notice.

Risk of trading Futures 

Futures are complex leveraged products and may not be suitable for inexperienced investors. Before investing, investors must understand the nature and accept the risks of futures products, including extreme price volatility of Digital Asset futures and the risk that the value of a Digital Asset futures position may decline rapidly and significantly, including to zero. While Digital Asset futures amplifies the potential profit of trading in Digital Assets, it also amplifies the risk of loss.  All the risks relating to the underlying Digital Assets may be magnified in Digital Asset futures because of the use of leverage.

The risk of loss is substantial. In volatile market conditions, the price of Digital Assets, and therefore the price of Digital Asset futures, may decline significantly in a short period of time, including to zero. An investor in Digital Asset futures must be prepared and able to bear the loss of the entirety of their investment.

You should not invest any amount that you cannot afford to lose. You are strongly encouraged to seek independent professional advice when deciding whether Digital Asset Futures products are suitable for you, having regard to your risk appetite, financial position and knowledge about Digital Assets.

When trading futures, it is your responsibility:

1. To familiarize yourself with Digital Assets and futures before you start trading.

2. To monitor your open positions and, when required, to reduce your position or deposit additional margin to avoid liquidation.

3. Manage your exposure and not risk more than you can afford to lose.

When trading futures you may suffer a loss as a result of a number of factors including but not limited to the following: (i) a position in futures moving against you, for example, you hold a long position and the price of the underlying Digital Asset declines or you hold a short position and the price of the underlying Digital Asset increases. You may lose the entirety of your investment, including all assets that you have made available as margin for the position; (ii) your profitable position may be force closed under auto-deleveraging, because one or more of the counter-parties to your profitable position has provide insufficient collateral, resulting in you not receiving some or all of the profits that you may otherwise be entitled to receive; (iii) you cannot close a futures position because there is insufficient market liquidity or demand for the other side of that trade; (iv) we are required to change parameters on the Platform such as the margin requirements; (v) there is a malfunction of the Platform, for example resulting from scheduled or unscheduled downtimes, matching system failure, database failure, cryptocurrency transfer or storage failure, failure or malfunction of the API, hacker attacks or other failure or malfunction.

The market price of a Futures contract for a Digital Asset may not mirror the price of the relevant Digital Asset in the spot market. The price of a futures contract for a Digital Asset may also fluctuate significantly in response to movements in the price of the underlying Digital Asset, supply and demand, and other market factors.

In order to open and maintain a futures position, you will be required to provide collateral as margin. The use of leverage allows traders to provide a relatively small amount of margin for a position with significantly more market exposure. However, this use of leverage means that a relatively small change in the market price of the underlying Digital Asset could result in liquidation of a position and loss of assets. For example, a 1% decrease in the price of a Digital Asset underlying a 10x leveraged long Futures contract is equal to a 10% loss in the long Futures position. Conversely, a 1% increase in the price of a Digital Asset underlying a 10x leveraged short Futures contract is equal to a 10% loss in the short Futures position.

If the market moves against your Futures position, you may be required to provide additional margin on short notice in order to maintain your Futures positions, failing which your position may be liquidated.  If you are subject to liquidation, you may sustain a total loss of all collateral that has been provided or otherwise made available to establish or maintain a position, including collateral provided to meet margin calls. Further, you may, in exceptional circumstances, be responsible and liable for any deficit resulting in your Account following liquidation of your positions. It is your responsibility to ensure that you have sufficient margin in your Account to maintain all open positions.

Perpetual futures products do not have a fixed term. You will be subject to funding rates for the duration of your positions in Perpetual Futures Products. 

Levex may at its sole discretion determine to terminate the offering of Futures. If you are required to close your Futures positions, or your Futures positions are forced closed, at a time when the market price of the underlying Digital Asset is not favorable, you may suffer losses as a result. Levex will not be responsible for any losses resulting from such termination.

The placing of certain “stop-loss” orders, or “stop-limit” orders which are intended to limit losses to certain amounts may not always be effective because rapidly changing market conditions may make it impossible to execute such orders. Strategies using combinations of positions such as “spread” and “straddle” positions may be as risky as taking simply “long” or “short” positions.

Other Risks

This Statement is a non-exclusive list of the risks which may be involved during your use of Levex Services. However, there are other risks which may be Service-specific or Product-specific. You should read carefully risk disclosures contained separately under the Legal Documents, including the User Agreement.

This document is part of our legal section. View all related documents in our Policy and Agreement hub