Investments in digital assets are speculative and come with a high degree of risk.
Volatility and significant risk of loss
The digital asset markets are extremely volatile. The movements of these markets are unforeseeable. These markets may also experience periods of decreased liquidity or even periods of illiquidity. One single liquidity provider may be the sole source of liquidity for the trading of digital assets, creating a higher risk of illiquidity.
Digital assets are not supervised by authorities or institutions such as central banks and, therefore, there is no authority or institution which may intervene to stabilize the value of digital assets and/or prevent or mitigate irrational price developments.
Trading digital assets is not appropriate for everyone, and is generally suitable only for investors who (i) can assume and sustain a significant risk of loss; and (ii) are aware that the value of the digital assets can change significantly and, as a result, have sufficient time to actively monitor and manage the investment.
We do not control the open-source software on which cryptocurrencies and other digital assets operate. Developers may introduce weaknesses and programming errors into the open-source software or may stop developing the open-source software (potentially at a critical stage where a security update is required), keeping cryptocurrencies and other digital assets exposed to weaknesses and programming errors. As an investor, you are exposed to the resulting risk of fraud, theft, cyber-attacks or disruptions of the underlying distributed ledger technology.
Hard forks, airdrops and similar events may lead to the instability of a specific version of a relevant distributed ledger. Such events may limit our ability to process transactions and lead to an increase of the fees.
Legal and regulatory uncertainty
There is uncertainty as to the legal, regulatory and tax treatment of digital assets and/or transactions in digital assets. Any forthcoming legal or regulatory actions may result in the illegality of digital assets or the implementation of controls relating to transactions in (and therefore liquidity of) some or all of the digital assets.
The treatment of digital assets in a bankruptcy has not been conclusively determined by regulatory authorities and bankruptcy administrations. Regulatory practice, court decisions, accounting rules and standards, as well as the features of digital assets and the manner in which custody by us or by a sub-custodian is operated, may influence the treatment of digital assets in a bankruptcy or similar event. There is no guarantee that your digital assets will be segregated in the event of bankruptcy of the Bank.
From time to time, we keep digital assets in custody with a sub-custodian abroad. In case digital assets are deposited with a sub-custodian that goes bankrupt, an absence of segregation of the digital assets will make it significantly more difficult to retrieve the relevant digital assets. The bankruptcy of the sub-custodian abroad may be subject to foreign laws, regulations and market practices, different to the ones applicable in Switzerland.
Staking is generally suitable only for investors with extensive knowledge and / or experience in digital assets. When staking digital assets, you do not have a guaranteed claim to any reward.
Staked digital assets may get lost, stolen, compromised or be subject to penalties. Unstaking digital assets may take significant time. Sub-custodians may be unable to unstake or otherwise return digital assets that have been staked.