Updated: 14 April 2024

This document summarizes the principal risks associated with the use of ETH staking and related cryptoasset custodial management services and the general risks associated with the ownership and holding of cryptoassets. We recommend that you read this information carefully before entering into a contract and using our services. ny outstanding taxes.

RISKS ASSOCIATED WITH CRYPTOASSETS

Volatility Risk

The value of cryptoassets is subject to substantial and rapid fluctuations, and these changes may occur unexpectedly.

Liquidity Risk

Cryptoassets may have limited liquidity, making it difficult to sell them. Liquidity can change unexpectedly and rapidly.

Currency Risk

The monetary value of cryptoassets depends on the value of the chosen reference currency and, where applicable, currency exchange rates. Economic Cycle Risk. Cryptoassets are a relatively new instrument with unknown and unpredictable relationships to the economic cycle and may behave unpredictably in relation to the general economic cycle, or in relation to developments within a specific economy sector, and may follow or go against such a cycle, or develop independently. Regulatory Risk. Dealing with cryptoassets and providing related services is currently mostly unregulated without the supervision of public authorities. However, the regulatory landscape is developing rapidly, and new regulations may be adopted that could affect the provision of our services or the legal requirements for acquiring and holding cryptoassets. Changes in the regulatory landscape may also affect the value of cryptoassets and their availability in certain countries.

Political Risk

Changes in the political situation, both globally and in certain regions or countries, may affect the value of cryptoassets and the regulation, legality, operation and enforceability of obligations related to cryptoassets.

RISKS ASSOCIATED WITH CRYPTOASSETS

Distributed Nature of DLT

Distributed ledger technologies, upon which cryptoassets are based, may exhibit varying levels of decentralization. As a result, there may not be any single entity responsible for the operation and development of the network. We have no control or influence over the operation and development of the network.

Network Dependence

Any dealing with cryptoassets including provision of our services depends on proper operation of the underlaying DLT network.

Changes in Underlaying Technology

Operation of DLT network changes continuously as the source code develops. Any development of the source code is beyond our control or influence, but it may influence provision of our services or value of cryptoassets.

Irreversibility of Transactions

Cryptoasset transactions are irreversible. It may not be possible to recover stolen cryptoassets or cryptoassets lost due to transaction error.

Cybersecurity Risks

Cryptoassets are disposed of using a cryptographic key. Anyone with access to such a key can authorize transactions with cryptoassets. Therefore, cryptoassets are vulnerable to security risks if the confidentiality of the cryptographic key is breached. Additional cybersecurity risks might arise out of vulnerabilities in the underlying DLT and its code. Exploitation of security vulnerabilities may result in loss of cryptoassets.

STAKING RISKS

Changes in Consensus Mechanism

Staking depends on the consensus mechanism used by the relevant cryptoasset DLT network. This mechanism may change, which could affect how staking proceeds are distributed, their amount or result in the suspension of staking altogether.

Cooldown Period

Cryptoassets used for staking are locked in the validator node and can only be retrieved after relevant cooldown periods. The length of these periods may vary depending on the cryptoasset DLT network.

Variability of Proceeds

Proceeds from staking depend on the number of transactions in the relevant cryptoasset DLT network within a certain timeframe or on other variables. Therefore, the proceeds from staking are not guaranteed and are subject to significant fluctuations over time.

Slashing Risk

In certain circumstances, as determined by the cryptoasset DLT network, the cryptoassets locked in the validator node may be subject to slashing. This means that the staked cryptoassets may be partially or fully lost as a penalty for violating the set conditions.

SERVICE SPECIFIC RISKS

No Insurance

We are not obligated to insure the cryptoassets under our management, and there is no statutory insurance scheme in place to reimburse you in case of any loss of cryptoassets.

Custodial Management

During the provision of our services, we manage the cryptoassets as specified in the contract. You can regain control of the cryptoassets subject to the agreed-upon conditions.

Reasonable Security Measures

We implement technologically and economically reasonable security measures to prevent the loss of cryptoassets under our management. However, no security measures are infallible, and security breaches may result in partial or complete loss of cryptoassets.

Insolvency

In the event of our insolvency, the recovery of any cryptoassets under our management may be subject to statutory proceedings.

Limited Liability

We have only a limited liability to reimburse any losses as stipulated in the agreement.

TAXES

Possible Taxable Event

Using our services may trigger a taxable event on your side, which may require you to file a tax declaration and pay any outstanding taxes.

Your Responsibility

We do not offer any services related to filing tax declarations or paying taxes on your behalf. It is solely your responsibility to declare and pay any outstanding taxes.