RISK DISCLOSURE AND DISCLAIMER
PHEMEX MAY IN ITS ABSOLUTE DISCRETION DISCLOSE TO YOU THE RISKS OF YOUR USE OF THE SERVICES FROM TIME TO TIME, AND IN PARTICULAR, IN PART 1 AND PART 2 OF THIS RISK DISCLOSURE AND DISCLAIMER STATEMENTS (“THESE STATEMENTS”). THESE STATEMENTS DO NOT FULLY DISCLOSE THE RISKS OR MATERIAL ASPECTS OF CONDUCTING TRANSACTIONS OR USING THE SERVICES. YOU SHOULD NOT CONSTRUE THESE STATEMENTS OR ANY TERMS OF THE AGREEMENT AS LEGAL, TAX OR FINANCIAL ADVICE. PHEMEX PROVIDES AN EXECUTION-ONLY SERVICE AND DOES NOT ADVISE ON THE MERITS OF ANY PARTICULAR TRANSACTIONS, TRADING RISK OR THEIR TAX CONSEQUENCES, AND PHEMEX DOES NOT PROVIDE ANY OTHER FINANCIAL, INVESTMENT OR LEGAL ADVICE IN CONNECTION WITH THE SERVICES AND YOU MUST NOT REGARD PHEMEX AS ACTING IN THAT CAPACITY. YOU SHOULD CONSULT YOUR OWN INDEPENDENT PROFESSIONAL ADVISORS BEFORE ENTERING INTO ANY TRANSACTION AND ONLY USE THE SERVICES IF YOU HAVE FULLY UNDERSTOOD THE NATURE, THE CONTRACTUAL RELATIONSHIP INTO WHICH YOU ARE ENTERING, ALL RELEVANT TERMS AND CONDITIONS AND THE NATURE AND EXTENT OF YOUR EXPOSURE TO LOSS. YOU HAVE BEEN RECOMMENDED TO READ THESE STATEMENTS CAREFULLY AND RETAIN THESE FOR YOUR RECORDS.
PART 1: Risk Disclaimer
1. In conducting any Virtual Asset Transaction activities including any incidental Services provided by Phemex to you, Phemex will not recommend or promote any Virtual Asset, Product or Services unless Phemex takes the initiative in our own name (excluding automatic emails sent by your subscription), any other marketing activities not initiated by Phemex or not in the name of Phemex shall not be deemed as solicitated by Phemex, and you agree that you purchase such non-solicited products or engage us in such non-solicited Services by your own judgement. Whether solicited or not, you shall always reasonably evaluate your finaicial situation, investment experience and investment objectives before take any actions. No other provision of these Statements or any other document Phemex may ask you to sign and no statement Phemex may ask you to make derogates from this Section.
2. You declare and acknowledge that the Risk Disclosure Statement associated with Virtual Assets Transactions has been fully explained to you in a language that you understand and choose and you have been invited to read the Risk Disclosure Statement associated with Virtual Assets Transactions. You have been given the opportunity to ask questions and to seek independent legal and financial advice if you wish. You further declare that you have carefully and thoroughly read the Risk Disclosure Statement associated with Virtual Assets Transactions, and you fully understand and accept its contents and agree to be bound by the same. The Risk Disclosure Statement is set out as Part 2 at the end of these Statements.
3. You represent, warrant and undertake to Phemex that if you give Instructions for effecting Transactions under the Account:
(a) you fully understand the nature, features and risks of the Virtual Assets and are willing to bear such risks;
(b) you have sufficient net worth to be able to assume the risks and bear the potential Losses of Transactions in the product; and
(c) you have thoroughly and independently considered the risks involved, its investment objectives, financial needs and commitments, your own circumstances before giving the Instructions, as well as your experience in Transactions of such or any Virtual Assets.
4. You acknowledge, understand and agree that:
(a) the actual bid and offer prices of any Transaction will be determined at the time when such Transaction is effected; and any figures which may have been quoted by Phemex or our representatives prior to such Transaction are indicative only;
(b) any price of any Virtual Asset quoted by Phemex in response to any of your enquiry is for reference only and shall not be binding on Phemex or any of our market information providers. Phemex shall be entitled to act on any Instruction for the sale and purchase of any Virtual Asset, even if the price of such Virtual Asset has altered to the disadvantage of you between the time of our receipt of such Instruction and the time at which Phemex or our agent completes any such sale or purchase;
(c) the use of any Phemex Service does not guarantee a fault-free Service and may, from time to time, encounter technical failure, delay, malfunction or interruption that may impact or interfere with your Transaction;
(d) the configuration of any third party software to Phemex Exchange is your own responsibility and technical assistance from Phemex Exchange support may be limited;
(e) the offering documents or product information provided by an issuer of Virtual Assets have not necessarily been subject to scrutiny by any Government Agency;
(f) the value of a Virtual Asset may be derived from the continued willingness of market participants to exchange Fiat Currency for a Virtual Asset, which means that the value of a particular Virtual Asset may be completely and permanently lost should the market for that Virtual Asset disappear. There is no assurance that a person who accepts a Virtual Asset as payment today will continue to do so in the future;
(g) legislative and regulatory changes may adversely affect the use, transfer, exchange and value of Virtual Assets;
(h) any other risks listed in Part 2 of these Statements.
5. You expressly agree that your use of Phemex Exchange, the Website and any Services of Phemex is at your sole risk. The trading interface, the information and all aspects of Phemex Exchange (including, but not limited to, order execution) are provided on an ‘AS IS’ basis, without warranty of any kind, express or implied, including but not limited to warranties of title or implied warranties of merchantability or fitness for a particular purpose. No oral advice or written information given by Phemex, our Affiliates or any information providers shall create a warranty. Phemex does not guarantee the timeliness, sequence, accuracy or completeness of market data or any market information (including any information provided to you) at Phemex Exchange; and Phemex shall not be liable in any way for any Losses arising from or caused by (a) any inaccuracy, error in or omission from any such data, information or message; (b) any delay in the transmission or delivery thereof; (c) any suspension or congestion in communication; (d) any unavailability or interruption of any such data, message or information whether due to any act of Phemex or (e) by any forces beyond the control of Phemex.
6. Before conducting any Transaction, you should obtain details of all commissions, fees and costs for which you will be liable. If any of the fees and costs are not clear to you, you should request the fee and costs that will be applicable in specific monetary terms before entering into a Transaction. Depending on the Services provided, such fees and costs will be set out in the relevant Transaction confirmation, in writing via agreed communication method or otherwise recorded in your Account. The commissions, fees and costs you pay will vary depending on a variety of factors, including the nature of your relationship with us in relation to the relevant Services, the transaction size, complexity and type of asset. Any fees or costs applied may include execution charges (including commissions, commission equivalents, markups, markdowns and dealer spreads) and/or administrative costs.
PART 2: Risk Disclosure
Transaction in virtual assets and using the Transaction and related Services involve risks, some of which are set out below. These risks, and additional risks arising either now or in the future, could result in the loss, failure or destruction of your assets, inability to receive any benefits available to you, other Losses and termination of our Transaction and related Services.
You must consider carefully whether the risks set out below, as well as all other applicable risks, are acceptable to you prior to any virtual asset transaction.
You must seek professional advice regarding your particular situation before Transaction in the virtual assets or using the Transaction and related Services.
THE RISK OF LOSS IN TRANSACTIONS INVOLVING VIRTUAL ASSETS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CAREFULLY CONSIDER WHETHER SUCH TRANSACTIONS ARE SUITABLE FOR YOU IN LIGHT OF YOUR INVESTMENT OBJECTIVES, FINANCIAL CIRCUMSTANCES, YOUR TOLERANCE TO RISKS AND YOUR INVESTMENT EXPERIENCE. YOU SHOULD BE CAPABLE OF BEARING A FULL LOSS OF THE AMOUNTS INVESTED AS A RESULT OF OR IN CONNECTION WITH ANY VIRTUAL ASSET TRANSACTION AND ANY ADDITIONAL LOSS OVER AND ABOVE THE INITIAL AMOUNTS TRADED OR INVESTED THAT MAY BECOME DUE AND OWING BY YOU. IN CONSIDERING WHETHER TO TRADE OR INVEST, YOU SHOULD INFORM YOURSELF AND BE AWARE OF THE RISKS GENERALLY, AND IN PARTICULAR SHOULD NOTE THE FOLLOWING SPECIFIC RISK FACTORS WHICH MAY APPLY TO ANY GIVEN VIRTUAL ASSET TRANSACTION.
Unless otherwise defined in this document, capitalized terms shall have the same meaning as the “Phemex Terms of Use”.
If you wish to conduct Transactions of Virtual Assets (irrespective of whether they amount to “securities” under any Applicable Law), you should read carefully and understand fully the relevant risks mentioned herein.
1. Issuer Default Risks
Unless expressly stated otherwise, Phemex does not issue Virtual Assets. Virtual Assets are issued by third parties. You should read the applicable terms, information and risk disclosures provided by the applicable issuers carefully before entering into any Transaction. You should note that the offering document or product information provided by the issuer have not been subject to scrutiny by any regulatory body.
For any Virtual Assets authorized by a Government Agency, you should note that authorization does not imply any official recommendation or endorsement of the asset by such Government Agency, nor does it guarantee the commercial merits of such asset or its performance.
In the event that a Virtual Asset issuer becomes insolvent and defaults on the issued products, you will be considered as unsecured creditors and will have no preferential claims to any assets held by the issuer. You should therefore pay close attention to the financial strength and credit worthiness of securities issuers and conduct your own assessment on the potential of the products. Since Virtual Assets are not legal tender and Virtual Asset products are not be backed by assets or any government and authorities, in the event of issuer bankruptcy or ceasing of operations, the Virtual Assets issued may no longer have any value and you can lose entire investment. We make no representations or warranties about whether any Virtual Asset will always continue to trade on the Phemex Exhange. Any Virtual Asset is subject to delisting without prior notice in the sole discretion of us. You should seek independent professional advice before making any investment decision.
2. Market, Liquidity and Conversion Risks
Where Transactions are denominated in particular Virtual Asset or Fiat Currencies other than your primary reference asset, or where you convert Virtual Assets upon carrying out a Transaction, there is a risk of the exchange markets moving against you, resulting in upon maturity or any earlier dealing the net proceeds may be significantly less than the initial amount in your primary reference asset, and any income or gains may be entirely negated.
The value of a Virtual Asset may be derived, among other things, from the continued willingness of market participants to exchange Fiat Currency for that Virtual Asset, this means that the value of a particular Virtual Asset may decline, or be completely and permanently lost should the market for that Virtual Asset disappear. You should further note that there is no assurance that a market that existed for a particular Virtual asset will continue to exist in the future, or that a person who accepts a Virtual Asset as payment today will continue to do so in the future.
Liquidity risk is the risk of losses attributable to a lack of liquidity (for example very few active market participants) in a particular market. This is usually indicated by wide bid / offer spreads and very few transactions being carried out in a particular product or market. The risk is that changes in the underlying market price may be infrequent but very large, and that it is not possible to unwind or transfer a particular transaction in a timely manner, at near the price you expected, or at all. Such liquidity risk in a Virtual Asset may be caused by the absence of buyers, limited buy/sell activity or underdeveloped secondary markets for certain Virtual Assets. You should note that there is no assurance that a person who accepts a Virtual Asset as payment, will continue to do so in the future.
You may also suffer Loss as a result of depreciation of the value of the currency paid as a result of foreign exchange controls imposed by the country issuing the foreign currency. Repayment or payment of amounts due to you may be delayed or prevented by exchange controls or other actions imposed by Government Agencies or regulatory bodies over Fiat Currencies which they control or regulate.
3. Volatility Risks
The volatility and unpredictability of the price of Virtual Asset relative to other Virtual Asset or Fiat Currencies may result in significant losses over a short period of time. Such fluctuations could affect the price of any Virtual Assets. Any Virtual Asset may decrease in value or lose all of its value due to various factors including discovery of wrongful conduct, market manipulation on trading, lending or other dealing platforms, change to the nature or properties of the Virtual Asset, governmental or regulatory activity, legislative changes, suspension or cessation of support for a Virtual Assets or other exchanges or service providers, public opinions, or other factors outside of our control. Technical advancements, as well as broader economic and political factors, may cause the value of Virtual Assets to change significantly over a short period of time. Virtual Assets are highly risky and you should exercise caution when conducting Transactions with any Virtual Asset.
4. Transaction Suspension Risks
The ability for you to purchase or sell Virtual Assets using Phemex is contingent on there being a counterparty willing to sell or purchase the same Virtual Assets, which is outside of Phemex’s control.
During the suspension of Transaction of the Virtual Assets, you and potential Users cannot buy and sell units on Phemex Exchange. In terms of providing a fair and orderly market with regarding your interests, Phemex may suspend the Transaction whenever it is appropriate. If the Transaction is suspended, the subscription and redemption of such Virtual Assets may also be suspended. It may also be difficult or impossible to liquidate a position in the Virtual Assets under certain circumstances. Certain Airdrops, Forks or Network Events may occur rapidly and affect our ability to conduct a Transaction. Information relating to such events may be difficult to ascertain ahead of time and may be subject to limited oversight by any third party who is capable of intervening to stabilize the network.
5. Not a Bank Deposit under Applicable Laws
The Virtual Assets held by Phemex and/or our Affiliates are not held as “deposits” within the meaning of the Applicable Laws where Phemex and/or our Affiliates are domiciled, which may differ from the jurisdiction where you have been domiciled. Please consult with your lawyer in case you have any doubts or question.
6. Jurisdiction Risks
Residents, Tax residents or persons having a relevant connection with certain jurisdictions are excluded from carrying out virtual asset transactions. Changes in your place of domicile or the Applicable Laws may result in your violating any legal or regulatory requirements of the applicable jurisdiction. You shall be responsible for ensuring that any Transaction is, and remains lawful despite changes to Applicable Laws, your place of domicile and circumstances.
7. Country Risks
If a Transaction is made in respect of Virtual Assets issued by a party subject to foreign laws or transactions made on markets in other jurisdictions, including markets formally linked to a domestic market, recovery of the sums invested and any profits or gains may be reduced, delayed or prevented by exchange controls, debt moratorium or other actions imposed by the Government Agencies. Before conducting any Transaction, you should satisfy yourself as to the sufficiency of understanding of any rules or laws relevant to the particular Transaction(s).
You should note that your local Government Agency will be unable to compel the enforcement of the rules of Government Agencies or markets in other jurisdictions where your Transactions have been effected. It is your sole responsibility to obtain independent advice about the different types of redress available in both your home jurisdiction and other relevant jurisdictions before starting a Transaction. If your country of residence imposes restrictions on Virtual Asset Transactions, we may be required to discontinue your access to the Account, and may not be permitted to transfer Virtual Assets back to you or permit you to transfer Virtual Assets from the Account to yourself or others, until such time as the regulatory environment permits us to do so.
8. Legal and Regulatory Risks
Legal and documentation risks include the risk that transactions and/or their related framework arrangements may not be legally enforceable or that the conduct of the parties violates Applicable Laws. There is also legal uncertainty on whether Virtual Assets can be regarded as “property” under the Applicable Laws. This may affect the nature and enforceability of your interest in such Virtual Asset. Legislative and regulatory changes may adversely affect the use, transfer, exchange, and value of Virtual Assets. You are solely responsible for knowing and understanding how the laws applicable to you or your property, rights or assets or tax the Virtual Assets you trade or the leverage you provide.
9. Regulatory Measures
Virtual Assets may be overseen by the Government Agencies of a number of jurisdictions globally. We may receive notices, queries, warnings, requests or rulings from one or more authorities upon short notice, or may even be ordered to suspend or terminate any action in connection with any Virtual Asset as a whole without prior notice. Furthermore, many aspects of the securities involve untested areas of law and regulation, and could be subject to new laws or regulations. Therefore, their legal and regulatory outcome in all relevant jurisdictions is not possible to predict. The planning, development, marketing, promotion, execution or otherwise of the Virtual Assets may be seriously affected, hindered, postponed or terminated as a result of such new laws and/or regulations. Since regulatory policies can change with or without prior notice, any existing regulatory permissions for or tolerance of Virtual Assets in any jurisdiction may be withdrawn without warning. Virtual Assets, Cryptographic-tokens, and cryptocurrencies could be deemed from time to time as a commodity or virtual commodity, a digital asset or even as money, securities or currency in various jurisdictions and therefore the securities could be prohibited from being entered into, traded or held in certain jurisdictions pursuant to local regulations. In turn, Virtual Assets could be deemed to be a regulated or restricted product. There is no guarantee that Virtual Assets can maintain any particular legal or regulatory status in any particular jurisdiction at any time.
10. Risks of Assets Received or Held outside Singapore
Virtual Assets and Fiat Currency received or held by us and/or our Affiliates outside Singapore are subject to Applicable Laws of the relevant overseas jurisdictions, which may be different from Singapore and the rules made thereunder. Consequently, such assets may not enjoy the same protection as that conferred on some of the assets received or held in Singapore.
11. Risks Relating to Authorized Persons
There are substantial risks in allowing another person to engage in Transaction or operate an Account, and it is possible that Instructions could be given by persons who are not properly authorized. You accept all of the risks of such an operation and irrevocably release us from all liabilities arising out of or in connection with such Instructions.
12. Virtual Assets may be Complex Products
Understanding Virtual Assets requires advanced technical knowledge. Virtual Assets may be complex products by virtue that the terms, features and/or risk are not understood due to the complex structure, novelty and reliance on technological features. Virtual Assets are often described in exceedingly technical language that requires a comprehensive understanding of applied cryptography and computer science in order to appreciate inherent risks.
13. Commissions and Fees
You shall obtain details of all fees, costs, charges, expenses and commissions for which you will be liable before conducting any Transaction. If any of the foregoing is unclear to you, it is your responsibility to clarify such fees, costs, charges, expenses and commissions before entering into the Transaction.
The fees, costs, charges, expenses and commissions to be paid by you will vary depending on a variety of factors, including the nature of your relationship with Phemex in relation to the relevant Services, the Transaction size, complexity and type of Virtual Asset.
14. Tax Treatment and Accounting
Some Transactions may be subject to the tax laws and regulations in an applicable jurisdiction. The tax treatment and accounting of Virtual Assets is a largely untested area of law and practice that is subject to changes. Tax treatment of Virtual Assets may vary amongst jurisdictions. We may receive queries, notices, requests or summons from tax authorities and as a result may be required to furnish certain information about the Transaction.
Among the accounting profession, there are no agreed standards and practices for how an auditor can perform assurance procedures to obtain sufficient audit evidence for the existence and ownership of Virtual Assets, and ascertain the reasonableness of the valuations.
You agree that Phemex is not responsible for determining whether or which laws may apply to your Transactions, including tax laws. You are solely responsible for reporting and paying any taxes arising from your use of the Services. If you are unsure about the tax implications of your Transactions, you should seek independent professional advice before carrying out a Transaction.
15. Inflation Risks
Virtual Assets may, either because of the inherent design of the Virtual Assets or through Forks, Airdrops or Network Events, not be a fixed supply of assets. Where additional Virtual Assets are created, their price may decline due to inflationary effects of the increased amount of total Virtual Assets available.
16. Concentration Risks
At any point in time, one or more persons may directly or indirectly control significant portions of the total supply of any particular Virtual Asset. Acting individually or in concert, these holders may have significant influence, and may be able to influence or cause Forks or Network Events which may have a detrimental effect on price, value or functionality of the Virtual Assets. Network Participants may make decisions that are not in your best interest as a holder of Virtual Assets.
17. Conflicts of Interest
We or other relevant service providers may facilitate the initial distribution of Virtual Assets (such as, initial coin offerings), secondary market trading, or both, in manners similar to a traditional exchange, alternative trading system or securities broker. If these operations are not under the purview of any regulator, it would be difficult to detect, monitor and manage conflicts of interest.
18. Cryptographic Protection
Cryptography is evolving and there can be no guarantee of security at all times. Advancement in cryptography technologies and techniques, including but not limited to code cracking, the development of artificial intelligence and/or quantum computers, could be identified as risks to all cryptography-based and/or blockchain based systems including the underlying assets of the Virtual Assets. The security of Phemex Exchange cannot be guaranteed as the future of cryptography or security innovations is unpredictable.
19. Abandonment or Development Failure
Due to the technically complex nature of the trading platform, we could face difficulties from time to time that may be unforeseeable and/or unresolvable. Accordingly, the development of Phemex Exchange could fail, terminate or be delayed at any time for any reason (including but not limited to a lack of funds). Development failure or termination may render the Virtual Asset not transferable, not exercisable, and/or obsolete.
20. Loss of Private Key is Permanent and Irreversible
You shall note that Virtual Assets not received nor held by Phemex and/or our Affiliates in an Account is at your responsibility, and that the you alone are responsible for securing your private key for any address with respect to such Virtual Assets. Any loss of control of the private key will permanently and irreversibly deny your access to such Virtual Assets. Neither Phemex nor any other person will be able to retrieve or protect the virtual assets not held by Phemex and/or our Affiliates in an Account. Once lost, you will not be able to transfer such Virtual Assets to any other address or wallet. This means that you will also not be able to realize any value or utility that the Virtual Assets may have now or in future.
21. Cyber-attacks and Fraudulent Activity, including Theft of Digital Assets on the Trading Platform
There may be attempts to steal the digital assets on a trading platform. The nature of Virtual Assets exposes you to an increased risk of fraud or cyber-attack. Virtual Assets, your Account, any Service provided by Phemex, and the Website may be targeted by malicious persons who may attempt to steal Virtual Sssets or Fiat Currency, or otherwise intervene in a Transaction or any Service. This includes (but is not limited to) interventions by way of distributed denial of Service, sybil attacks, phishing, social engineering, hacking, smurfing, malware, double spending, majority-mining, consensus-based or other mining attacks, misinformation campaigns; Forks; and spoofing.
These malicious entities may target you in an attempt to steal any asset held by you, or to claim any asset that you may have purchased. This may involve unauthorized access to an Account, your private keys, addresses, passwords, email or social media accounts, log-in details or access method for the Account, as well as unauthorized access to your computer, smartphone and any other devices used by you. You alone are responsible for protecting yourself against such actions.
Virtual Assets, your Account, any Service provided by Phemex, and the Website may also be vulnerable to exploitation of vulnerabilities in smart contracts and other code, as well as to human error.
A limited amount of your Virtual Assets may be stored in hot wallets (i.e. online environments which provide an interface with the internet), which can be prone to hacking or cyber-attacks. Cyber-attacks resulting in the hacking of Virtual Assets trading platforms and thefts of Virtual Assets are common. Victims may have difficulty recovering any losses resulting from these attacks. This could result in significant loss and/or other impacts that may materially affect your interests.
The above events may affect the features, functions, operation, use, access or other properties of the Virtual Assets, your Account, the Website or any Services provided by Phemex. While Phmex will endeavor to adopt industry best practices to keep the Virtual Assets safe (including but not limited to the use of cold storage and multi-signature authentications), successful cyber thefts and other fraudulent activities set out above may still occur.
22. Flaw in the Source Code
While we adopt quality assurance procedures to help ensure the source codes as accurately as possible reflect their intended operation, the flawlessness of the source codes, some of which are open source codes, cannot be guaranteed. They may contain bugs, defects, inconsistencies, flaws or errors, which may disable some functionality, create vulnerabilities or cause instability. Such flaws may compromise the predictability, usability, stability, and/or security of the trading platform. Open source codes rely on transparency to promote community-sourced identification and solution of problems within the code.
23. Unpermissioned, Decentralized and Autonomous Ledger
Phemex Exhange is being developed to serve various distributed ledger systems which are unpermissioned protocols that could be accessed and used by anyone. In addition to the use of decentralized ledgers, we intend to make use of supporting technologies that also operate on decentralized ledgers. The utility and integrity of Phemex Exhange relies on the stability, security and popularity of these decentralized ledgers. Risks arising from relying on such distributed ledger technology include the existence of technical flaws in the technology, targeting by malicious persons, majority-mining, consensus-based or other mining attacks, changes in the consensus protocol or algorithms, decreased community or miner support, rapid fluctuations in value of relevant Virtual Assets, the existence or development of competing networks, platforms and assets, flaws in the scripting language, disputes between developers, miners and/or users and regulatory action. We are envisaged to be an open, decentralized community and its composition can include users, supporters, developers and other participants worldwide who may or may not be connected with us in any manner. Phemex Exhange is intended to be decentralized and autonomous in nature as far as its maintenance, governance and evolution are concerned.
24. Compromised Security
We rely on open source software and unpermissioned decentralized distributed ledgers including but not limited to Bitcoin, Ethereum, Solana, Ripple, Dogecoin, Tron and BSC. Accordingly, anyone may intentionally or unintentionally compromise the core infrastructural elements of Phemex Exchange and its underlying technologies. This may consequently result in the loss of any digital assets held on Phemex Exhange and may cause our system to fall.
25. Inadequacy of Processing Power
The ramp up of the trading platform may be accompanied by sharp increases in transaction numbers and demand for processing power. If the demand for processing power outgrows that forecasted, the network of the trading platform could be destabilized and/or stagnated. This may create opportunities for fraudulent activities including but not limited to false or unauthorized transactions (such as "double-spending") to arise. All these may adversely impact the usability, stability and security of Phemex Exchange.
26. Unauthorized Claim of Virtual Assets
Virtual Assets can be claimed in bad faith by any person who successfully gains access to the wallet, email or Your Accounts. This can be as a result of deciphering or cracking password, phishing scams and/or other hacking techniques. Subsequently, your Virtual Assets may be sent to anyone and such remittance is not revocable or reversible. It is recommended that you should take appropriate security measures to safeguard your wallet, email and Accounts. Each User is responsible for the security of their wallet, email and Account on Phemex Exchange at all times.
27. Forking and Attacks
Many cryptographic tokens are developed on the Ethereum blockchain, which is an open-source protocol. Once released to the open-source community, anyone may develop a patch or upgrade for the source code of Ethereum without prior permission by anyone else. The acceptance of patches or upgrades by a significant, but not necessarily overwhelming percentage of the Ethereum holders could result in a Fork in the Ethereum blockchain.
The temporary or permanent existence of forked blockchains could adversely impact the operation of Phemex Exchange. Such a Fork can undermine the sustainability of the trading platform ecosystem, and may destroy or frustrate the trading platform. While a Fork in the blockchain could possibly be rectified by community-led efforts to re-merge the two separate branches, success is not guaranteed and could take an undetermined amount of time to achieve.
Virtual Assets may also be subject to attacks on the security, integrity or operation of the networks, including Network Events. Such foregoing events (including a Fork) may affect the features, functions, operation, use or other properties of any Virtual Assets, network or platform.
The events may also severely impact the price or value, function and/or the name of any Virtual Assets, or even result in the shutdown of the network or platform associated with the Virtual Assets. Such events may be beyond our control, or to the extent Phemex has any ability to impact such event, our decision or actions may not be in your best interests.
28. Reliance on the Internet and Other and Technology-related Risks
Virtual Asset transactions rely heavily on the internet and other technologies. However, the public nature of the internet means that either parts of the internet or the entire internet may be unreliable or unavailable at any given time. Further, interruption, delay, corruption or loss of data, the loss of confidentiality in the transmission of data, or the transmission of malware may occur when transmitting data via the internet and/or other technologies. The result of the above may be that your Transaction is not executed according to your Instructions, at the desired time, or not at all.
The nature of Virtual Assets also means that any technological difficulties experienced by the Phemex may prevent you from accessing your Virtual Assets.
No authentication, verification or computer security technology is completely secure or safe.
The internet or other electronic media (including without limitation electronic devices, services of third-party telecom service providers such as mobile phones or other handheld trading devices) are an inherently unreliable form of communication, and such unreliability may be beyond our control.
Any information (including any document) transmitted, or communication or transactions made, over the internet or through other electronic media (including electronic devices, services of third party telecommunication service providers such as mobile phones or other handheld trading devices or interactive voice response systems) may be subject to interruption, transmission blackout, delayed transmission due to data volume, internet traffic, market volatility or incorrect data transmission (including incorrect price quotation) or stoppage of price data feed due to the public nature of the internet or other electronic media.
29. Transactions Deemed Executed Only when Recorded or Confirmed
Some Virtual Assets Transactions may be deemed to be executed only when recorded and confirmed by Phemex, which may not necessarily be the time at which you initiate the Transaction.
30. Risks Relating to Timing
A Transaction is binding upon completion of the steps described in the Phemex Terms of Use. Following this, the Transaction will not be reversed. There is a risk that the final binding Virtual Asset Transaction does not occur at the same time as Instructions are provided. You may suffer loss due to the fact that a Transaction is not carried out at the desired time.
31. Unauthorized Access
Unauthorized third parties may access or use your Account and effect Transactions without your knowledge or authorization, whether by obtaining control over another device or Account used by you, or by other methods.
32. Irreversible Transactions
Transactions in Virtual Assets may be irreversible, and, accordingly, losses due to fraudulent or accidental transactions may not be recoverable. You shall note that once a Transaction has been verified and recorded on a blockchain, loss or stolen virtual assets generally will not be reversible. This means accidental or fraudulent Transactions in respect of Virtual Assets may not be recoverable.
33. Other Important Notes
In addition to the above, you shall also note:
(a) the continuing evolution of Virtual Assets and how this may be affected by global regulatory developments;
(b) most trading, lending or other dealing platforms and custodians of Virtual Assets are presently unregulated;
(c) counterparty risks when effecting Transactions with issuers, private buyers and sellers or through trading, lending or other dealing platforms;
(d) risk of the loss of Virtual Assets, especially if held in hot wallets; and
(e) new risks which may arise from investing in new types of Virtual Assets or market participants’ engagement in more complex transaction strategies.
