Yes, Cryptocurrencies are high-risk products and may not be suitable for all clients. Cryptocurrencies have become known for their extreme fluctuations in prices. While there is potential for significant gains, the risk of loss in holding cryptocurrency positions can be substantial. You should ensure you understand the risks below before using Virtual Asset services.
- Not legal tender or government-backed
Virtual Assets are not legal tender, are not backed by any government or central bank, and have no guaranteed value.
- Risk of total loss
The price or value of Virtual Assets is highly volatile and can change rapidly, decrease, and potentially even fall to zero. In some cases, Virtual Assets may become worthless.
- Extreme volatility and unpredictability
Virtual Asset prices can fluctuate significantly over short periods of time and may be driven by speculative or irrational market forces rather than underlying fundamentals.
- Liquidity and market risk
Markets for Virtual Assets may be limited or disappear entirely, making it difficult or impossible to buy, sell, convert, or liquidate Virtual Assets at a desired time or price.
- Transaction timing and pricing risk
Virtual Asset transactions may be delayed or remain unconfirmed on blockchain networks, and the execution price of a trade may differ from the price displayed at the time an order is placed, particularly during periods of volatility or network congestion.
- Irreversibility and limited recovery
Virtual Asset transactions are generally irreversible. Virtual Assets sent in error, to an incorrect address or network, or that are lost or stolen may not be recoverable.
- Technology and DLT risks
Virtual Assets rely on new and evolving technologies, including distributed ledger technology (DLT), which carry risks relating to anonymity, transaction finality, settlement failures, system errors, and operational disruptions.
- Cybersecurity and financial crime risk
The nature of Virtual Assets may increase exposure to cyber-attacks, hacking, fraud, money laundering, sanctions breaches, and other financial crime risks. This may result in transaction monitoring, delays, restrictions, or account reviews.
- Custody and third-party dependency
Virtual Asset services may rely on third-party custodians, exchanges, or technology providers. Failures, insolvency, or operational issues affecting these parties may impact access to or availability of Virtual Assets.
- Forks, delisting, and continued acceptance
Virtual Assets may be subject to forks, protocol changes, delisting, or loss of market support. There is no assurance that any person or business that accepts a Virtual Asset today will continue to do so in the future.
- Operational and platform risk
Technological or operational difficulties experienced by Sarwa or its service providers may temporarily prevent access to or use of your Virtual Assets.
- Regulatory and legal risk
Changes in regulations or government actions - whether in ADGM or other jurisdictions - may impact the legality, availability, use, transfer, exchange, or value of Virtual Assets.
- Limited investor protections
Investor protections are often limited or non-existent in the cryptocurrency environment. Virtual Assets are not protected by any government-backed deposit protection, insurance, or compensation scheme.
No advice provided
Sarwa does not provide investment, financial, tax, or legal advice in relation to Virtual Assets. Due diligence and a full understanding of the implications and risks surrounding Virtual Assets and related products is crucial before using these services.
Important reminder
You should only use Virtual Asset services if you understand these risks and can afford to lose the full value of your investment.