Digital Token / Fiat Wallet Services Risk Disclosure Statement
Last Revised: 01 May 2022
Risk Warning on Digital Payment Token Services
Hako Technology Pte Ltd ("Coinhako") is licensed to provide digital payment token services under the Payment Services Act 2019 (No. 2 of 2019).
The Monetary Authority of Singapore ("MAS") requires us to provide this risk warning to you as a customer of a digital payment token ("DPT") service provider.
Before you pay your DPT service provider any money or DPT, you should be aware of the following.
- Your DPT service provider is licensed by MAS to provide DPT services. Please note that this does not mean you will be able to recover all the money or DPTs you paid to your DPT service provider if your DPT service provider’s business fails.
- You should not transact in the DPT if you are not familiar with this DPT. This includes how the DPT is created, and how the DPT you intend to transact is transferred or held by your DPT service provider.
- You should be aware that the value of DPTs may fluctuate greatly. You should buy DPTs only if you are prepared to accept the risk of losing all of the money you put into such tokens.
- You should be aware that your DPT service provider, as part of its licence to provide DPT services, may offer services related to DPTs which are promoted as having a stable value, commonly known as “stablecoin”.
This Risk Disclosure Statement provides you with information about some of the risks associated with trading Digital Tokens, and the use of other Services provided by Coinhako. The information presented in this Risk Disclosure Statement is not comprehensive and does not reflect all of the risks (or other important factors) you should consider before using the Services. Trading in Digital Tokens involves significant risks and potential for financial losses. You must make your own independent decision to access or use the Services and should seek any advice that you consider necessary or desirable (including financial and/or legal advice) from independent advisers. It is your sole responsibility to ensure that you understand all the relevant risks of trading Digital Tokens, as well as analyse, evaluate and understand the terms, features and arrangements underlying Digital Tokens, and carefully consider whether such trading is appropriate for you in light of your experience, objectives, financial resources, particular needs, risk appetite, and other relevant circumstances. Under no circumstances shall any of the Indemnified Persons be responsible or liable to you or any other person or entity for any direct or indirect losses (including loss of profits, business or opportunities), damages or costs by reason of, or arising from, or as a consequence of, your use or reliance on any of the information set out in this Risk Disclosure Statement.
The features, functions, characteristics, operation, use and other properties of any Digital Tokens ("Token Properties") and the software, networks, protocols, systems, and other technology (including, if applicable, any blockchain) ("Underlying Technology") used to administer, create, issue, transfer, cancel, use or transact in any Digital Tokens may be complex, technical or difficult to understand or evaluate. Such Token Properties and Underlying Technology create significant risks when trading Digital Tokens.
Coinhako's decision to support the transfer, storage or trading of any particular Digital Token through the Services does not indicate Coinhako's approval or disapproval of the Digital Token or the integrity, security or operation of the Digital Token or its Underlying Technology. The risks associated with Digital Tokens and trading Digital Tokens apply notwithstanding Coinhako's decision to support a particular Digital Token.
- Trading in Digital Tokens entails significant risks of financial loss. You should not commit funds to trading in Digital Tokens that you are not prepared to lose entirely. Digital Token markets can be volatile and prices can fluctuate significantly, which could result in sudden and significant increases or decreases in the value of your assets at any given moment. You should assess whether your financial situation and risk tolerance is suitable for buying, selling or trading Digital Tokens. You accept and agree that you are solely responsible for any decision to buy, sell, trade or otherwise hold or deal with Digital Tokens. You should be aware that the risk of loss in trading or holding Digital Tokens can be substantial.
- Digital Token markets may be susceptible to irrational (or rational) bubbles or loss of confidence, which could collapse due to many reasons. For example, confidence in Digital Tokens might collapse as a result of unexpected changes imposed by software developers or others, a government crackdown, the creation of superior competing alternative Digital Tokens, or a deflationary or inflationary spiral. Confidence might also collapse because of technical problems, for example, if the anonymity of the system is compromised, if money or Digital Tokens are lost or stolen, or if hackers or governments are able to prevent transactions from settling. Negative consumer perception of specific Digital Tokens may also negatively affect their value.
- Digital Tokens are underpinned by an autonomous and largely unregulated worldwide system of individuals and entities. Traders and market participants put their trust in a digital, decentralized and partially anonymous system that relies on peer-to-peer networking and cryptography to maintain its integrity. Thus, the value of Digital Tokens may be derived from the continued willingness of market participants to exchange fiat currency for Digital Tokens, which may result in the potential for the permanent and total loss of value of a particular Digital Token should the market for that Digital Token disappear.
- Abnormal market conditions may occur in Digital Token markets, such as volatile price movements, influx of new participants, and others that may affect the normal use of the Platform, the placing of Orders or Irrevocable Orders or their execution, processing or settlement.
Coinhako makes no representations, warranties or undertakings on whether any Digital Token will always be available to trade on the Platform, and/or be supported by Coinhako. Any Digital Token is subject to delisting in the sole and absolute discretion of Coinhako in accordance with the terms and conditions of the Agreement.
- Markets for Digital Tokens have varying degrees of liquidity. Some Digital Tokens are quite liquid while others may be thinly traded or illiquid, which means there is a scarcity of persons who are willing to trade at any one time. Thinly traded or illiquid markets have the potential to increase the risk of loss because they can experience high volatility of prices, and market participants may find it impossible to liquidate market positions except at very unfavourable prices. Coinhako does not guarantee that the markets for any Digital Token will be active and liquid, or that you would be able to establish or liquidate positions in any Digital Tokens when desired or at favourable prices. Coinhako does not guarantee any profit from trading or any other activity associated with Coinhako's Services. Coinhako will not be obligated to purchase from you any Digital Tokens, whether bought from Coinhako or otherwise.
- Digital Tokens are not considered legal tender and are not backed by any central bank or government. Accounts and value balances are not subject to any government-backed deposit insurance or any other government protections. There is no central bank or government regulator that can take corrective measures to protect the value of the Digital Token in a crisis, manage the demand or supply of Digital Tokens, or smoothen any fluctuations in the price or value of Digital Tokens.
Legal and Regulatory Risks
- Government regulation of Digital Tokens is unsettled and rapidly evolving. The application and interpretation of existing laws and regulations are often largely untested and there is a lack of certainty as to how they will be applied. New laws and regulations may be promulgated in the future that apply to blockchain technology and Digital Tokens, and related service providers, and no assurance can be given that any such changes will not adversely affect Digital Tokens generally (including the use, transfer, exchange and value of Digital Tokens) or the Services. It is not possible to predict how such changes would affect the price, liquidity and/or tradability of Digital Tokens, or the use of any Services. Any Digital Token may decrease in value or lose all of its value due to changes in laws or regulations, or any action taken by governmental or regulatory authorities.
- Regulatory actions could negatively impact Digital Tokens in various ways, including, for purposes of illustration only, through a determination (with retrospective or prospective effect) that Digital Tokens are regulated financial instruments requiring registration or licensing in certain jurisdictions. Coinhako may have to suspend or limit the trading of certain Digital Tokens or the use of certain Services, or disallow users to trade Digital Tokens or use any of the Services based on their citizenship, residence or location if doing so is commercially unsustainable or is prohibited by any such regulatory actions. Any such regulatory actions could materially affect the price, liquidity and/or tradability of Digital Tokens, or the use of any Services.
Coinhako has sole and absolute discretion to suspend or reject the execution of any of your Instructions, Orders and/or Irrevocable Orders, suspend or cease support for any Digital Tokens, or suspend or terminate your access to any Accounts or Services, where any such action or inaction is, in the sole opinion of Coinhako, required or desirable to facilitate Coinhako's compliance with Applicable Laws, or any order, directive or request from law enforcement or other governmental or regulatory authorities.
Risks Arising from Changes to Digital Tokens or Underlying Technology
- Coinhako does not own or control the Underlying Technology which governs the operation of Digital Tokens supported on the Platform. Generally, such Underlying Technology are 'open source' and can be used, copied, modified or distributed by anyone.
- Any Digital Token or Underlying Technology may change or otherwise cease to operate as expected due to a change made to the Underlying Technology, a change made using features or functions built into the Underlying Technology or a change resulting from an Attack (as defined below) ("Material Operating Changes"). These Material Operating Changes may include, without limitation, a "fork", a "rollback", or a "bootstrap" of a Digital Token or blockchain.
- Such Material Operating Changes may materially affect the availability, value, functionality, and/or the name of the Digital Tokens you store in your Digital Token Wallet. This includes but is not limited to Digital Tokens potentially being cancelled, lost or double spent, or otherwise losing all or most of their value. You acknowledge and accept the risks of Material Operating Changes to Underlying Technology and agree that Coinhako is not responsible for such changes and not liable for any loss of value you may experience as a result of such changes.
- Coinhako does not control the timing and features of these Material Operating Changes. It is your responsibility to make yourself aware of any potential or implemented changes to any Digital Token or the Underlying Technology and you must carefully consider publicly available information and information that may be provided by Coinhako in determining whether or not to continue to transact in the affected Digital Token.
- Coinhako will endeavour to provide you notice of its response to any Material Operating Change; however, such changes are outside of Coinhako’s control and may occur without notice to Coinhako. Coinhako reserves the right to suspend or cease to support the transfer, storage or trading of any Digital Tokens at any time at Coinhako's discretion in response to any Material Operating Change. Other exchanges and service providers may or may not do the same. Coinhako may, but is not obligated to, make changes to your Account(s) in response to a Material Operating Change.
- Coinhako has sole and absolute discretion not to support any such Material Operating Changes, including but not limited to so-called metacoins, colored coins or other Digital Tokens, or their related side chains or other Underlying Technology that are based on a fork, enhancement, or derivative of a different Digital Token or Underlying Technology ("Derivative Protocols") even if the Derivative Protocol is based on a Digital Token that is supported by Coinhako. Other exchanges or service providers may or may not do the same. Coinhako will not be liable for any loss of value you may experience as a result of any such Material Operating Changes.
- You may be unable to withdraw Digital Tokens prior to Coinhako ceasing to support transfer of any such Digital Tokens as a result of Material Operating Changes, resulting in the total loss of any such Digital Tokens remaining in your Account.
Digital Token Security Risks
- Any Digital Token and its Underlying Technology may be vulnerable to attacks on its security, integrity or operations ("Attacks"), including Attacks using computing power sufficient to overwhelm the normal operation of a blockchain or other Underlying Technology. Coinhako makes no representation, warranty or undertaking of any kind, express or implied, statutory or otherwise, regarding any Underlying Technology or blockchain functionality nor for any breach of security in the Underlying Technology or blockchain functionality.
- Any Digital Tokens may decrease in value or lose all of its value due to various factors including discovery of wrongful conduct, market manipulation, changes to Token Properties or perceived value of Token Properties, Attacks, suspension or cessation of support for a Digital Token by Coinhako or other exchanges or service providers, and other factors outside the control of Coinhako.
Coinhako assumes no responsibility for the operation of the Digital Tokens or their Underlying Technology and does not guarantee the functionality or security of any Digital Tokens or their Underlying Technology. You acknowledge and accept the risk of any changes or breach of security to the Underlying Technology of any Digital Tokens stored in your Digital Token Wallet.
Platform's Cybersecurity Risks
- There are various risks associated with utilising an Internet-based trading system (such as the Platform) including, but not limited to, the failure of hardware, software, and Internet connections, the risk of malicious software introduction, the risk that third parties may obtain unauthorized access to information and/or assets (including your Digital Tokens) stored on your behalf, cyber-attack, failure of Underlying Technology, blockchain or other networks, computer viruses, communication failures, disruptions, errors, distortions or delays you may experience when trading via the Services, howsoever caused, spyware, scareware, Trojan horses, worms or other malware that may affect your computer or other equipment, or any phishing, spoofing or other attack. Any such cybersecurity failures or breaches, whether involving the Platform or third-party service providers (including, but not limited to, hardware or software providers, or cloud services providers) could have a negative impact on the price, liquidity and/or tradability of Digital Tokens, or the use of any Services.
You acknowledge and accept that Coinhako does not control Internet signal power, its reception or routing, configuration of your equipment or its reliability, and that Coinhako shall not be responsible for any communication failures, disruptions, errors, distortions or delays you may experience when trading via the Platform, however caused.
Platform's Operational Risks
- Due to the nature of Digital Tokens, any technological difficulties experienced by Coinhako could prevent your access or use of the Digital Tokens stored in your Digital Token Wallet.
- You may be prevented from sending an Instruction, transaction request or email, or your Instruction, transaction request or email may not be received by Coinhako and/or the Platform, due to hardware, software or services issues (including, without limitation, Internet and other network connectivity issues).
- Your Instruction, transaction request or email to Coinhako and/or the Platform may be lost, intercepted or altered during transmission.
- Deposits, withdrawals and transfers may not be instantaneous, and Coinhako is not responsible for any price movements during that time and any losses incurred.
- Coinhako does not guarantee support of all networks for a Digital Token.
- The entire balance displayed in your Account(s) may not be tradeable, withdrawable or transferable due to precision limitations.
- Coinhako may not support dividend payouts or other distributions in relation to any or all of the Digital Tokens.
- Your ability to purchase any Digital Tokens through the Platform is contingent on whether or not Coinhako is holding sufficient amount of the relevant Digital Tokens in its proprietary wallets and/or Coinhako’s ability to acquire such Digital Tokens before on-selling them to you. Therefore, Coinhako makes no promises regarding the timing or your ability to purchase any Digital Tokens using the Platform.
- Coinhako securely stores Digital Token private keys, in a combination of online and offline storage. As a result of our security protocols, it may be necessary for us to retrieve private keys or related information from offline storage in order to facilitate a Digital Token Transaction in accordance with your Instructions, and you acknowledge that this may delay the initiation, execution and/or settlement of such Digital Token Transaction.
- Coinhako may, from time to time, perform maintenance on the Platform or in relation to any of the Services, routine or otherwise. This may lead to Platform or Services downtime and your inability to access the Platform or any of the Services, potentially resulting in a delay or cancellation of any Orders or Irrevocable Orders. Coinhako may also suspend or permanently cease support for one or more Digital Tokens during network upgrades and/or network changes (e.g. mainnet switches).
Unauthorised Access and Erroneous Transmission of Digital Tokens
- Unauthorised third parties may access or use your Account(s) and effect transactions without your knowledge or authorisation, whether by obtaining the password to your Account(s), obtaining control over another device or account used by you in connection with any enhanced security measures enabled for your Account(s), or by other methods. Coinhako will not be liable to you for any losses resulting from any of these kinds of unauthorised access.
- Any Digital Token may be lost forever if sent to the wrong address (including, without limitation, if the address is improperly formatted, contains errors, or is intended to be used for a different type of Digital Token). You further acknowledge and agree that (i) Coinhako does not guarantee the recovery of Digital Tokens sent to incorrect addresses; (ii) Coinhako is not obligated to assist with any form of Digital Token recovery; and (iii) any assistance rendered by Coinhako to assist with the recovery of Digital Tokens shall be considered by Coinhako on a case-by-case basis and at its sole and absolute discretion. Please see Recovery Policy for Coinhako's Token Recovery Policy. Additional fees and recovery charges may also apply for attempts by Coinhako to try and recover Digital Tokens for you.
- There is no assurance that any person or business who currently accepts Digital Tokens as payment will continue to do so in the future.
- Coinhako has no control over, and assumes no liability for, the delivery, quality, safety, legality or any other aspect of any Digital Token that you may receive from or transfer to, any third party (including other Users). If you experience any problem with any Digital Tokens received from any third party, or if you have a dispute with such third party, you should resolve the dispute directly with that third party.
No Deposit Protection
- There are no deposit protection schemes that are applicable to the Services and your Account balances are uninsured unless you specifically obtain third party private insurance with respect to them. Your wallet balance is at risk of total loss, from, among others things, security breaches (whether in respect of your Account(s) specifically or the Services generally), electronic, technological or systems failures (including recordkeeping errors), and insolvency or bankruptcy, or equivalent formal proceedings, in respect of Coinhako.
- Digital Tokens are generally not backed by any entity. This means that you have no right of recourse against any issuing entity in relation to any matter relating to your Digital Tokens. It also means that neither Coinhako nor anyone else has an obligation to redeem or buy back your Digital Tokens.
- The Digital Tokens that you transfer to the address(es) associated with your Account(s) may not be segregated from, and may be commingled with, other Digital Tokens of other users; there is no trust or fiduciary relationship in respect of any Digital Tokens or fiat money transferred to Coinhako or any other Account balances.
The abovementioned risks described in this Risk Disclosure Statement may result in loss of Digital Tokens, decrease in or loss of all value for Digital Tokens, inability to access or transfer Digital Tokens, inability to trade Digital Tokens, inability to receive financial benefits available to other Digital Token holders, and other financial losses to you. The abovementioned is not a closed list, there may be additional risks that Coinhako has not foreseen or identified in this Risk Disclosure Statement. You hereby acknowledge that Coinhako will have no responsibility or liability for, any such risks whether identified in this Risk Disclosure Statement or not.