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Risk Disclosure Statement of EXZi
2024
Introduction
UAB EXZi Markets, referred to as the "Company," "we," "us," is a registered Virtual Currency Exchange Operator operating under the Laws of Lithuania, committed to upholding the highest standards of integrity and compliance with applicable Laws of Lithuania. Before engaging in trading or transacting on our platform, it is crucial for you as a Customer to understand the inherent risks associated with digital asset trading. The volatile and unpredictable nature of the cryptocurrency market can lead to significant financial losses. Therefore, we strongly advise all users to thoroughly assess their financial situation, risk tolerance, and understanding nature of digital currencies before initiating any transactions. By using our services, you acknowledge and accept full responsibility for your trading and transaction decisions. It is your duty to remain informed about the changes in the cryptocurrency market and to understand how these changes can impact your investments.
The inclusion of any digital token on our platform does not constitute an endorsement of its merit, stability, or potential value. We provide a platform for trading, but we do not offer guarantees regarding the performance, stability, or legality of any digital token. The valuation of digital tokens can fluctuate dramatically, and past performance is not indicative of future results.
We encourage you to review the Terms & Conditions carefully to understand your rights and responsibilities on our platform. The cryptocurrency landscape is continuously evolving, and regulatory changes can occur. We reserve the right to update or modify this risk disclosure statement as necessary to comply with legal and regulatory updates or to reflect changes in market conditions.
- Risks associated with trading of digital assets
Trading digital tokens involve a high level of risk and may not be suitable for all investors. The high volatility of digital token markets can result in significant financial loss in a short period. Before engaging in such trading activities, it is essential to carefully consider whether this type of trading aligns with your investment objectives, level of experience, and risk appetite. You should be aware and prepared for the possibility of losing all funds deposited to our platform. The value of digital tokens can fluctuate widely, and their price can decrease rapidly, including to zero. Factors influencing these fluctuations may include but are not limited to, market demand, investor sentiment, regulatory news, and changes in the technology underlying digital tokens.
Digital token markets can experience periods of low liquidity or extreme volatility, which may result in trading delays or the inability to execute trades at your desired price. This could lead to orders being executed at a substantially different price than expected, potentially resulting in high losses. Trading on our platform involves risks related to the internet-based nature of digital tokens. These include, but are not limited to, the failure of hardware, software, and Internet connections, which can lead to disruptions in trading and cause potential losses.
Trading in digital tokens is inherently speculative and involves a high degree of risk. The market for digital tokens is relatively new, unregulated in many aspects, and may not behave like traditional financial markets. The prices of digital tokens are extremely volatile and subject to wide fluctuations. Investment in this market should be considered highly speculative and, as such, should only be undertaken by individuals who can afford to lose their entire investment.
The regulatory environment for digital tokens is evolving, and regulation changes can significantly impact the value, transferability, and legality of digital tokens. Personally, you are responsible for understanding and complying with all laws and regulations applicable to your trading activities. It is also possible that not only digital tokens, but the amount of services we provide may change based on the regulatory requirements that evolve over time, although it is our responsibility to inform you of any changes.
The technology underlying digital tokens (including blockchain) is subject to change, errors, and disruptions. Such occurrences can impact the value and functionality of a digital token, potentially leading to the loss of your assets. Our platform is not responsible for any losses you may incur as a result of your trading decisions. By trading on our platform, you accept that all final decisions are yours and that you trade at your own risk.
1.1. Counterparty Risks
When trading digital tokens on our platform, you are engaging in transactions with various counterparties. It is important to understand that we do not control, endorse, or guarantee the actions or reliability of these counterparties. This includes the risk associated with the other users you may transact with, whether buying, selling, or transferring digital tokens.
There is a risk that counterparties may default on their obligations due to insolvency, lack of liquidity, operational failures, or fraud. Non-compliance with agreed terms by a counterparty can result in financial losses. While our platform facilitates these transactions, we are not liable for the failure of any counterparty to fulfill their obligations to you.
Although we perform due diligence to the extent possible and in line with the Republic of Lithuanian Law on the Prevention of Money Laundering and Terrorist Financing, we cannot guarantee the complete accuracy and authenticity of the information provided by users or third parties. You should exercise caution and conduct your own due diligence before engaging in transactions with other parties on our platform.
In the event of a dispute with a counterparty, while we may provide assistance in resolving such disputes, we do not assume responsibility for any losses that may arise from such disputes. The resolution of disputes between you and other users is ultimately your responsibility.
The anonymous or semi-anonymous nature of digital token transactions can increase the risk of fraud and scams. Be vigilant against deceptive practices by other participants within the blockchain. We advise you to trade cautiously and report any suspicious activities on our platform, while it is our obligation to maintain a robust AML/CTF program to ensure an effective prevention of financial crimes.
We strongly recommend that you transact with known and trusted parties whenever possible. If you choose to engage with new or unknown parties, proceed with extra caution, although if you become a victim of any fraud or scam, please find our FAQ section that describes further actions that need to be taken.
- Operational Risk
Our platform relies on sophisticated technology, including software, hardware, and internet connectivity, to provide continuous and effective trading services. Despite our commitment to system reliability, there are inherent risks of disruptions. These may include unforeseen downtime, maintenance, technical glitches, or failures that can affect your ability to access or use our services.
Operational disruptions may lead to delayed transactions, inability to access your account, or errors in trading operations. These issues can result in financial losses and missed trading opportunities. We prioritize the security of our platform and employ various measures to protect against unauthorized access and cyber threats. However, no system is entirely immune to security breaches or cyberattacks. Any successful breach could compromise the confidentiality, integrity, and availability of our services and your information, potentially leading to financial loss or unauthorized access to your account.
Users are responsible for ensuring their means of accessing our platform, such as personal computers, mobile devices, and internet connections, are secure and functioning properly. We are not responsible for losses or issues resulting from the failure of your personal hardware or software.
We continuously work on enhancing our operational resilience and reducing the impact of operational risks. This includes regular system audits, upgrades to our technology infrastructure, and implementation of robust security protocols. In case of a planned downtime to make platform updates, conducting risk remediation actions, we are obliged to inform Customers 3 days in advance.
- EXZi Market’s Regulatory Obligations and Customer Protection
UAB EXZi Markets’ platform operates under the regulatory oversight of the Financial Crime Investigation Service (FCIS) in Lithuania. This oversight ensures adherence to the stringent standards and regulations set forth for financial institutions in Lithuania. However, it's important to note that regulatory supervision does not imply any guarantee of the platform's performance or protection of users' funds against losses.
UAB EXZi Markets maintains a share capital of 125,000 EUR, which is in line with regulatory requirements. This capital serves as a financial buffer and is indicative of our commitment to operational stability and solvency. However, users should understand that this share capital is not a guarantee against the loss of their funds or a protection mechanism in case of significant financial losses or insolvency.
We implement robust security measures to protect our platform and users' assets. These include advanced encryption technologies, secure storage practices, and continuous monitoring for threats. While these measures significantly reduce the risk of unauthorized access and cyber-attacks, they cannot provide absolute security. Thus, we cannot guarantee that these measures will prevent all potential breaches or losses.
- Risk Appetite
Our risk appetite to certain customers may change based risk exposure, regulatory expectations and reputational risk management.
| EXZi Markets Prohibited Activities | Meaning |
| Illicit Use of Funds | Customers are strictly prohibited from engaging in any activities that involve funds derived from illegal sources, including but not limited to money obtained from drug trafficking, human trafficking, terrorism, or any other criminal activities. |
| Fraudulent Activity | Customers are prohibited from engaging in fraudulent activities, such as identity theft, phishing, or any deceptive practices to manipulate or exploit our platform or other customers. |
| Money Laundering | Customers must not use UAB EXZi Markets to launder money or facilitate money laundering for any third parties. |
| Financing Terrorism | Customers must not use our platform to provide financial support, directly or indirectly, to any individuals, groups, or organizations involved in terrorist activities. |
| Mixing services | Customers are prohibited from engaging/using any mixing services to ensure the anonymity of transactions, therefore when identified - business relationships with such Customers are terminated. |
| Unregulated Gambling | Customers must refrain from using UAB EXZi Markets for unregulated gambling activities, as it may expose the platform to potential legal and reputational risks. |
| Trade in Stolen or Illegally Obtained Cryptocurrencies | Customers are strictly prohibited from engaging in any transactions involving cryptocurrencies that have been stolen or obtained through illegal means. |
| Financing of Prohibited Goods or Services | Customers must not use our platform to finance the purchase or sale of prohibited goods or services, including weapons, illegal drugs, counterfeit products, or any other items deemed illegal or unethical. |
| Violation of Intellectual Property Rights | Customers must respect the intellectual property rights of others and are prohibited from using our platform to engage in any activities that infringe upon copyrights, trademarks, patents, or other intellectual property rights. |
| Transactions in Prohibited Jurisdictions | Customers are not allowed to conduct transactions from jurisdictions that are subject to international sanctions or restrictions or are outside of the Company’s risk appetite based on several sources such as FATF, EU Commission, and others. |
| Use of False Information | Customers must provide accurate and truthful information during the onboarding process and throughout their business relationship with UAB EXZi Markets. The use of false or misleading information is strictly prohibited. |
| Circumventing AML/CTF Measures | Customers must not attempt to circumvent or undermine our AML/CTF measures, including identity verification and transaction monitoring processes. |
| Facilitating Cybercrime | Customers are prohibited from using UAB EXZi Markets to facilitate or participate in cybercrime, such as hacking, phishing, or any other unauthorized access to computer systems. |
| Engaging in High-Risk Investment Schemes | Customers are advised to avoid engaging in high-risk investment schemes or Ponzi schemes that promise unrealistic returns, as they may result in financial losses and potential legal consequences. |
| Fraudulent ICOs (Initial Coin Offerings) | Customers are not allowed to promote or participate in fraudulent initial coin offerings that misrepresent their projects, intentions, or potential returns. |
| Unauthorized Use of Third-Party Wallets | Customers are prohibited from using third-party wallets without proper authorization or consent, as it may lead to unauthorized access to funds and potential security breaches. |
| Providing False Investment Advice | Customers are not allowed to provide false, misleading, or unauthorized investment advice related to cryptocurrencies to others on the platform. |
| Cross-Border Sanctions Evasion | Customers are strictly prohibited from using cryptocurrencies to evade cross-border sanctions or any international trade restrictions. |
| Unauthorized Use of UAB EXZi Markets' Brand | Customers must not use UAB EXZi Markets' brand or logo without proper authorization for any unauthorized purposes, including scams or phishing attempts. |
Force Majeure
Force Majeure refers to extraordinary events or circumstances beyond our control, including, but not limited to, natural disasters (such as earthquakes, floods, and hurricanes), wars, floats, electricity cuts, riots, terrorist activities, government actions, pandemics, strikes, and other major disruptions. In the event of a Force Majeure, we may experience disruptions in our services. This can include delays in processing transactions, difficulties in accessing the platform, and interruptions in customer support services. The unpredictability and severity of these events can lead to extended periods of downtime and may affect the overall functionality of our exchange platform.
We have in place contingency plans and risk mitigation strategies to address potential impacts from Force Majeure events. These plans are designed to ensure the continuity of our services and minimize disruptions. However, it's important to acknowledge that in extreme scenarios, our ability to implement these plans may be hindered.
Under Force Majeure circumstances, we will take all reasonable steps to resume services and fulfill our obligations as quickly as possible. However, we cannot be held liable for any failure or delay in performing our services when such failure or delay is due to a Force Majeure event. This includes any losses, whether direct or indirect, that you may suffer as a result of such disruptions. In the occurrence of a Force Majeure event, we commit to maintaining open and transparent communication with our users. We will provide updates on the nature of the event, its impact on our services, and the measures we are taking to address the situation. Our support team will strive to offer assistance and guidance throughout the disruption, within the limits of the prevailing circumstances.