MOS Risk Disclosure Statement

IMPORTANT

Trading in Digital Assets and using the exchange, brokerage and other services (“Services”) provided by MOS AU PTY LTD (“MOSAU” or “we”) 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 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 Digital Asset Transaction.

You shall seek professional advice regarding your particular situation before trading in the Digital Assets or using the Services.

THE RISK OF LOSS IN TRANSACTIONS INVOLVING DIGITAL 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 DIGITAL 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 DIGITAL ASSET TRANSACTION.

For the purpose of this Risk Disclosure Statement:

Account means an account that is established by us in your name for the purposes of the Services.

Airdrop means the attempted distribution or distribution by a Digital Asset network of any Digital Assets to Digital Asset addresses of a supported network.

Authorised Person means any person you authorise (either alone or collectively) and we approve to act on your behalf in giving Instructions, entering into Digital Asset Transactions or performing any other act in connection with the Agreement.  

Digital Asset means a digital representation of value that can be digitally transferred, stored and traded, with or without conditions, and can be used for payment, investment or other purposes, as determined and approved by MOSAU from time to time for use in connection with the Services. 

Digital Asset Transaction means a transaction for the acquisition or disposal of Digital Assets by you that is initiated, negotiated and completed through our Services.

Fork means changes in operating rules of the underlying protocols of a Digital Asset that may result in:  (a) more than one version of that Digital Asset; and/or

(b) MOSAU holding an amount (which may be an identical amount) of Digital Assets associated with each forked network,

in each case as determined by MOSAU. 

Network Event, in relation to a Digital Asset, means any event (other than an Airdrop or Fork) in respect of the blockchain or the smart contract that underlies a Digital Asset, which is beyond our control, and results in:

(a) loss of control or ownership by us or a third party of any amount of such Digital Asset; or

(b) transaction records on the blockchain being altered, reversed or otherwise invalidated, whether by way of a fraudulent act or consensus, including any double spending attack, 51 percent attack and blockchain reorganisations, 

in each case, as determined by MOSAU. 

Service(s) means the Brokerage Service and any other service that we may provide to you from time to time.

1 TRANSACTION AND SERVICES RISKS

1.1  Risks of Digital Asset trading The prices of Digital Assets fluctuate, sometimes dramatically. The price of a Digital Asset may move up or down, and may become valueless. It is as likely that losses will be incurred rather than profit made as a result of buying and selling Digital Assets. 1.2  Nature of Digital Assets Digital Assets are not legal tender. They may not be backed by physical assets, and are not backed or guaranteed by the government. They may not have intrinsic value. Some of the Digital Assets may not circulate freely or widely, and may not be listed on any secondary markets.

Digital Assets may or may not be considered “property” under the law, and such legal uncertainty may affect the nature and enforceability of your interest in Digital Assets. Digital Assets are generally a high-risk asset class. They may or may not be financial product. You should exercise caution in relation to the trading of Digital Assets, and Digital Assets themselves. Transactions involving Digital Assets are irrevocable. Lost or stolen Digital Assets may be irretrievable. Once a transaction has been verified and recorded on a blockchain, loss or stolen Digital Assets generally will not be reversible. 1.3  Reliance on distributed ledger technology

Digital Assets rely on various types of distributed ledger technology. Some of this technology is open source software that is built upon experimental technology, namely blockchain. Risks arising from relying on such 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 Digital 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. 1.4  Digital Assets may be complex products Digital 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. 

1.5  Volatility of Digital Assets The value of the Digital Assets may fluctuate significantly over a short period of time. The volatile and unpredictable fluctuations in price may result in significant losses over a short period of time. Any Digital Asset may decrease in value or lose all of its value due to various factors including discovery of wrongful conduct, market manipulation, change to the nature or properties of the Digital Asset, governmental or regulatory activity, legislative changes, suspension or cessation of support for a Digital 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 Digital Assets to change significantly over a short period of time. 1.6  Market, liquidity and conversion risk Where Digital Asset Transactions are denominated in particular Digital Assets or fiat currencies other than your primary reference asset, or where you convert Digital Assets upon carrying out a Digital Asset Transaction, there is a risk that if the exchange markets move against you, then 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 particular Digital Asset may decline, or be completely and permanently lost should the market for that Digital Asset disappear. There is no assurance that a market for a particular Digital Asset will continue to do so in the future. This is because the value of a Digital Asset may be derived, among other things, from the continued willingness of market participants to exchange that Digital Asset. There is the possibility for you to experience losses due to the inability to sell or convert assets into a preferred alternative asset immediately or in instances where conversion is possible but at a loss. Such liquidity risk in an asset may be caused by the absence of buyers, limited buy/sell activity or underdeveloped secondary markets. There is no assurance that a person who accepts a Digital 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 governmental or regulatory bodies over currencies which they control or regulate. 1.8  No right under statutory protection schemes You should be aware that:

(a)  any Digital Asset Transaction in respect of Digital Assets is not subject to a right to claim under the National Guarantee Fund by Australian Securities Exchange; and (b)  any Digital Assets or Fiat Currency held in an Account are not protected deposits and are not protected by the Financial Claims Scheme in Australia. This means that Digital Asset Transactions and Digital Assets may have a reduced level or type of protection compared to other products and asset classes afforded by the laws of Australia. 1.9  Commissions and fees Before conducting any Digital Asset 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 Digital Asset Transaction. Depending on the Services provided, such fees and costs will be set out in the relevant trade 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.

For the above purpose,

“commission equivalents” means the amount charged by MOSAU for purchasing or selling Digital Assets in certain riskless principal transactions (that is, transactions in which MOSAU, after having received an order to buy or sell from you, purchases or sells the Digital Assets from another person to offset the Digital Asset Transaction MOSAU entered into with you);

a “markup” or “markdown” is the difference between the price charged to you and the prevailing market price, such difference being included in the quote or the price of the Digital Assets; and

“spread” means the difference between the current purchase or bid price and the current ask or offer price. Such spread is also included in the quote or the price of the Digital Assets, which may narrow or widen in response to the supply and demand levels of the Digital Assets.

1.10  Risks of assets received or held outside Australia Digital Assets and fiat currency received or held by us outside Australia are subject to applicable laws of the relevant overseas jurisdictions. Consequently, such assets may not enjoy the same protection as that conferred on some of the assets received or held in Australia. 1.11  Risks relating to Authorised Persons There are substantial risks in allowing another person to trade or operate an Account, and it is possible that instructions could be given by persons who are not properly authorised. 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. 1.12  Suspension of Digital Asset Transactions, Airdrops, Forks & Network Events It may be difficult or impossible to liquidate a position in Digital Assets under certain circumstances. Certain Airdrops, Forks or Network Events may occur rapidly and affect our ability to conduct a Digital Asset 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 stabilise the network.

2 CYBERSECURITY AND TECHNOLOGY-RELATED RISKS

2.1  Loss of private key is permanent and irreversible You alone are responsible for securing your private key in respect of any address with respect to Digital Assets not received nor held by us in an Account. Losing control of your private key will permanently and irreversibly deny you access to your Digital Assets. Neither we nor any other person will be able to retrieve or protect your Digital Assets not held by us in an Account. Once lost, you will not be able to transfer your Digital Asset to any other address or wallet. You will not be able to realise any value or utility that the Digital Asset may hold now or in future. 2.2  Transactions irreversible The nature of Digital Asset Transactions is that they are irreversible. This means accidental or fraudulent transactions in respect of Digital Assets may not be recoverable. 2.3  Forks and attacks Digital Assets may be subject to Forks or attacks on the security, integrity or operation of the networks, including Network Events. Such events may affect the features, functions, operation, use or other properties of any Digital Asset, network or platform. The events may also severely impact the price or value, function and/or the name of any Digital Assets, or even result in the shutdown of the network or platform associated with the Digital Asset. Such events may be beyond the control of MOSAU, or to the extent MOSAU has any ability to impact such event, MOSAU’s decision or actions may not be in your interests.

2.4  Cyber-attacks and fraudulent activity

The technologic reliance of the Services on the internet exposes you to an increased risk of fraud or cyber-attack. Digital Assets, your Account, any Service, our website or trading tools may be targeted by malicious persons who may attempt to steal Digital Assets or fiat currency, or otherwise intervene in a Digital Asset Transaction or any of our Services. 

This includes (but is not limited to) interventions by way of:

(a) distributed denial of service; (b) sybil attacks; (c) phishing; (d) social engineering; (e) hacking; (f) smurfing; (g) malware; (h) double spending; (i) majority-mining, consensus-based or other mining attacks; (j) misinformation campaigns; (k) Forks; and (l)  spoofing.

Digital Assets, your Account, any Service, our website or trading tools 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 Digital 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 Digital Asset trading platforms and thefts of Digital Assets are common. Victims may have difficulty recovering losses from hackers or trading platforms. 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 Digital Assets, your Account, our website or our Services.

2.5  Targeting by malicious persons

Malicious entities may target you in an attempt to steal any asset you may hold, or to claim any asset that you may have purchased. This may involve unauthorised access to an Account, your private keys, your addresses, your passwords, your email or social media accounts, your log-in details or access method for the Account, as well as unauthorised access to your computer, smartphone and any other devices that you may use.

You alone are responsible for protecting yourself against such actions.

2.6  Cryptographic advancements

Developments in cryptographic technologies and techniques, including (but not limited to) the advancement of artificial intelligence and/or quantum computing, pose security risks to all cryptography-based systems including the Digital Assets, your Account, any of our APIs, website or our Services. Applying these technologies and techniques to the Digital Assets, an Account, any of our APIs, website or our Services may result in theft, loss, disappearance, destruction, devaluation or other compromises of the Digital Assets, an Account, any of our APIs, website, our Services or your data (as applicable).

2.7  Reliance on the internet and other technologies Digital Asset Transactions rely heavily on the internet and other technologies (including the agreed communication methods). 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 Digital Asset Transaction is not executed according to your Instructions, at the desired time, or not at all. 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 or interactive voice response systems) are an inherently unreliable form of communication, and such unreliability may be beyond the control of MOSAU. 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.

2.8  Risks relating to timing A Digital Asset Transaction is binding upon completion of the steps described in our Client Terms and Conditions. Following this, the Digital Asset Transaction will not be reversed. There is a risk that the final binding Digital Asset Transaction does not occur at the same time as Instructions are provided. You may suffer loss due to the fact that a Digital Asset Transaction is not carried out at the desired time. 2.9  Unauthorised access Unauthorised third parties may access or use your Account and effect Digital Asset Transactions without your knowledge or authorisation, whether by obtaining control over another device or account used by you, or by other methods.

3 SPECIFIC BROKERAGE SERVICES RISKS

3.1  Off-exchange transactions Our brokerage services (“Brokerage Services”) involve off-exchange transactions. Such transactions may involve increased risks since it may be difficult to liquidate an existing position, determine a fair price or assess exposure to risk. Off-exchange transactions are not as transparent as transactions conducted on any recognised exchange. 3.2  Counterparty risk You are subject to our counterparty risk under a Brokerage Services transaction. You should evaluate the comparative credit risk and undertake appropriate due diligence on both us and the applicable product before undertaking any Brokerage Services transaction.

4 GENERAL RISK STATEMENTS 

4.1 Jurisdiction risks

Residents, tax residents or persons having a relevant connection with certain jurisdictions are excluded from carrying out Digital Asset Transactions. Changes in your place of domicile or the applicable law may result in you violating any legal or regulatory requirements of your applicable jurisdiction.

You are responsible for ensuring that any Digital Asset Transaction is, and remains lawful despite changes to applicable laws, your residence and circumstances.

4.2  Digital Asset issuer risks We do not issue Digital Assets. Digital 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 a Digital Asset Transaction. No term or product information provided by the applicable issuer has been subject to regulatory approval, unless expressly stated otherwise. You should exercise caution in respect of any issuance or offer of such assets. For any Digital Assets that have been authorised by a regulator, authorisation does not imply any official recommendation or endorsement of the asset by the regulator, nor does it guarantee the commercial merits of the asset or its performance. You should seek independent professional advice before making any investment decision. 4.3  Tax treatment and accounting Some Digital Asset Transactions may be subject to the tax laws and regulations in an applicable jurisdiction. The tax treatment and accounting of Digital Assets is a largely untested area of law and practice that is subject to changes. Tax treatment of Digital 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 Digital Asset 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 the Digital Assets, and ascertain the reasonableness of the valuations.

If you are unsure about the tax implications of your Digital Asset Transactions, you should seek independent professional advice before carrying out a Digital Asset Transaction. 4.4  Inflation Risk Digital Assets may, either because of the inherent design of the Digital Asset or through Forks, Airdrops or Network Events, not be a fixed supply of assets. Where additional Digital Assets are created, their price may decline due to inflationary effects of the increased amount of total Digital Assets available. 4.5  Concentration risk At any point in time, one or more persons may directly or indirectly control significant portions of the total supply of any particular Digital 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 Digital Assets. Network Participants may make decisions that are not in your best interest as a holder of Digital Assets. 4.6  Country risks If a transaction is made in any Digital Asset 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 or other official bodies. Before you conduct any Digital Asset Transactions, you should satisfy yourself about any rules or laws relevant to those particular Digital Asset Transactions.

Your local regulatory authority will be unable to compel the enforcement of the rules of regulatory authorities or markets in other jurisdictions where your transactions have been effected. You should obtain independent advice about the different types of redress available in both your home jurisdiction and other relevant jurisdictions before you start to trade. If your country of residence imposes restrictions on Digital Asset Transactions, we may be required to discontinue your access to the Account, and may not be permitted to transfer Digital Assets back to you or permit you to transfer Digital Assets from the Account to yourself or others, until such time as the regulatory environment permits us to do so.

4.7  Regulatory uncertainty All Digital Asset Transactions are potentially exposed to legal and regulatory risks. The legal and regulatory treatment of some of the Digital Assets may change. Regulation of Digital Assets is unsettled and rapidly changing. Legal and regulatory treatment varies according to the jurisdiction. The effect of regulatory and legal risk is that any Digital Asset may decrease in value or lose all of its value due to legal or regulatory change. This may affect the value or potential profit of a Digital Asset Transaction. We may cancel or modify your Digital Asset Transaction, restrict or suspend the access to an Account or any of our Services to comply with applicable laws, FATF guidelines or for other reasons specified in our Client Terms and Conditions. We recommend that you obtain independent legal, tax and financial advice and that you continue to monitor the legal and regulatory position in respect of your Digital Assets and Digital Asset Transactions.

4.8  Conflicts of interest We or other Digital Asset trading service providers may be acting as agent for you as well as acting as principal against you. We or other relevant service providers may facilitate the initial distribution of Digital 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.