Risk Warning

Last Updated:

16 January 2024

IMPORTANT NOTICE
THE ESTONIAN GUARANTEE FUND (TAGATISFOND) DO NOT APPLY TO THE SERVICES PROVIDED BY SG VETERIS ESTONIA OÜ.

THE FINANCIAL SUPERVISION COMMISSION (BULGARIA) OR THE BULGARIAN DEPOSIT INSURANCE FUND (BDIF) DO NOT APPLY TO THE SERVICES PROVIDED BY SG VETERIS EUROPE EOOD.

THIS WEBSITE AND THE PRODUCTS AND SERVICES OFFERED BY BITPACE ARE INTENDED FOR WHOLESALE CUSTOMERS, BUSINESSES OR MERCHANTS ONLY. IF YOU ARE AN END-CUSTOMER/END-USER OR CONSUMER OF A MERCHANT, PLEASE BE AWARE THAT THE PRESENT RISK WARNING AND ITS ADJOINING STANDARD TERMS AND CONDITIONS DO NOT APPLY TO YOU AND YOU SHOULD REFER TO THE TERMS AND CONDITIONS AND/OR YOUR AGREEMENT WITH THE MERCHANT INSTEAD.

PLEASE READ THESE STANDARD TERMS AND CONDITIONS, RISK WARNING AND PRIVACY POLICY CAREFULLY BEFORE USING THIS WEBSITE, THE SANDBOX ENVIRONMENT, OUR PRODUCTS OR SERVICES OR REGISTERING WITH US.

NONE OF THE INFORMATION WE PROVIDE ON THIS WEBSITE OR IN THE SANDBOX ENVIRONMENT OR AS PART OF OUR PRODUCTS OR SERVICES IS OR SHOULD BE TREATED AS FINANCIAL ADVICE OR ADVICE OF ANY KIND. DEALING IN CRYPTO-ASSETS IS AT YOUR OWN RISK.

Status Statement

Bitpace”, “we”, “us”, or “our”) refers to (each):

  • SG Veteris Estonia OÜ, a private limited company, incorporated in Estonia (registry code 16564979) with registered office at Harju maakond, Tallinn, Kesklinna linnaosa, Raua tn 36, 10120, Estonia; registered as a Virtual Assets Service Provider (“VASP”) by the Financial Intelligence Unit (FIU) in Estonia, licence number FVT000552;
  • SG Veteris Europe EOOD, a private limited company, incorporated in Bulgaria (company number UIC 206635600) with registered address at Evropark building, 40 Tsarigradsko Shose Blvd., 2nd floor, 1750 Sofia, Bulgaria; registered as a crypto-asset business by the National Revenue Agency (NRA) in Bulgaria.

General

Please read this Risk Warning (which also includes several statements and disclosures) carefully before using our website, the sandbox environment, or our services. We reserve the right to amend, supplement or replace this Risk Warning at any time and at our sole discretion. This Risk Warning will remain effective until a more recent version is released and published at www.bitpace.com. Any terms not defined herein shall have the meaning ascribed in our Standard Terms and Conditions. This Risk Warning does not disclose all of the risks and other significant aspects of (dealing with) crypto-assets or our services.

Please consider that although we do not provide crypto-asset services to retail clients, we have considered that it is important to emphasise to our website visitors and our wholesale clients the risks highlighted in this Risk Warning.

This Risk Warning is not intended to override any other prescribed or applicable risk warning(s) or the agreements we have in place with you, nor the terms of any transaction you enter into with us, but to supplement them.

Accounts with Bitpace are not deposit or investment accounts. Bitpace is not an investment firm, bank, credit, trust, fiat payments service provider, electronic money institution or otherwise a financial firm or institution regulated as such.

Please consider that:

  • Our customers will have no recourse to the Financial Supervision Commission (Bulgaria), or the equivalent authority in Estonia in the event of a complaint relating to crypto-asset services.
  • Our customers' accounts are not protected by the Estonian Guarantee Fund, or the BDIF.

The services provided by Bitpace are unlikely to be appropriate for merchants who:

  • Do not understand the impact of and risks associated with crypto-assets;
  • Do not have a high-risk tolerance;
  • Cannot afford to lose the money they are trading with; or
  • Do not already have a diversified investment portfolio or savings.

We have set out below some of the key factors and risks you should take into account before engaging in business activity with Bitpace. However, this brief document does not disclose all the risks associated with crypto-assets and using Bitpace. If you engage with Bitpace, you should always keep these risk factors in mind and ensure you have sufficient financial resources to bear such risk when you engage in business activity with us. You should always monitor your transactions with us carefully.

If anything herein is unclear, please contact our Customer Support team available at [email protected].

No Advice. No Reliance

Bitpace is not a financial adviser, nor is Bitpace aware of your current financial position/situation, intents or objectives. Thus, you should carefully consider whether trading or holding crypto-assets is suitable for you, considering your financial standing/conditions. Bitpace bears no responsibility for any losses incurred using any information published or otherwise provided by us.

This Risk Warning does not constitute tax, legal, accounting or advice of any other kind. It does not exclude any mandatory obligations we owe you under any applicable law, rule or regulation. If you are unsure about any of the content of this Risk Warning, you should seek independent advice.

Any opinions, news, research, analyses, prices or other information contained within Bitpace or any promotional material is provided as general market commentary and does not constitute investment advice. Bitpace will not accept liability for any loss or damage, including, without limitation to, any loss of profit, which may arise directly or indirectly from the use of or reliance on such information.

Unless (i) we agree or notify you otherwise, or (ii) it is required by law or regulation that we act as agent when we transact with you, we act on an arm’s length basis as principal. We expect you to evaluate the appropriateness or suitability of any transaction based on the facts and circumstances relevant to you and your assessment of anytransaction’s merits.

Bitpace is not acting as a financial adviser or fiduciary (or in any similar capacity), nor have we assumed any duty or responsibility to make or give any investment advice or recommendations. If Bitpace express any advice, views or suggestions, whether or not at your request, Bitpace will not assume any responsibility for any transaction which may be made by us following such advice, views and suggestions, and no communication (written or oral) received from Bitpace will be deemed to be an assurance or guarantee as to the expected results of such transaction.

Warning about crypto-assets

Bitpace is issuing this Risk Warning to highlight possible risks our customers may face when holding or trading (e.g., buying, exchanging) crypto-assets via Bitpace. It must be noted that past returns are not indicative of future results.

When holding or trading crypto-assets, their specific characteristics should be taken into consideration. It is the customer’s responsibility to familiarise themselves with the ownership, business model, transparency, and public perception of the exchanges, platforms, or service providers that they consider using.

The risk of loss in holding or trading crypto-assets can be substantial - you can lose all your investment. Do not use fiat funds or other assets to exchange into crypto-assets that you cannot afford to lose.

Before proceeding with any investment in crypto-assets and using our services, it is crucial to understand and carefully consider the risks involved. The following points outline important risk factors to take into account (not intended to act as an exhaustive list):

Market Volatility Risk:

  • The market for crypto-assets is still new and uncertain.
  • As with any other asset, the value of crypto-assets can go up or down very quickly and can even become valueless (zero). The value of crypto-assets may drop sharply and permanently. Such volatility can result in significant gains or losses. It is essential to be prepared for the possibility of substantial financial losses, including the complete loss of your investment.
  • The price and liquidity of crypto-assets have been subject to large fluctuations in the past and may be subject to large fluctuations in the future.
  • Holding or trading in crypto-assets poses a significantly high risk of loss of the invested amounts, which may occur within a very short time frame as a result of a sudden adverse price movement of the crypto-assets.
  • Unlike payments into a traditional bank or payment account denominated in a fiat currency, there is no assurance that the value of the crypto-assets would remain largely stable.

Liquidity Risk:

  • Markets for crypto-assets have varying degrees of liquidity. Some are quite liquid, while others may be thinner. Thin markets can amplify volatility.
  • There is never a guarantee that there will be an active market for one to sell, buy, or trade crypto-assets or products derived from or ancillary to them.
  • Any market for crypto-assets may abruptly appear and vanish. It may not be possible to liquidate your crypto-assets.

Lack of or Fragmented Regulation:

  • The price feed is not subject to any regulatory supervision. Crypto-assets are not issued or guaranteed by a central bank and are usually traded on non-regulated decentralised digital exchanges or exchange platforms. Accordingly, price formation and price movements of crypto-assets depend solely on the internal rules of the digital exchange or platform, which may be subject to change at any point in time and without notice. This often leads to very high volatility.

  • The absence of regulatory oversight implies that these assets do not benefit from the same safeguards and protections as traditional financial products. Consequently, investing in crypto-assets carries inherent risks and uncertainties.

  • No specific regulatory protections exist that would cover you for losses if, for instance, we go out of business. Exchange platforms are not banks that hold crypto-assets as a deposit. There is no specific regulatory protection (for example, through a deposit guarantee scheme) that covers losses arising from funds or crypto-assets held on the exchange platform, even when the exchange platform is registered with a national authority.

  • Crypto-assets are not recognised as a financial instrument, and in case we are unable to meet our obligations towards our customers (as mentioned above), our customers will NOT be compensated by the Estonian Guarantee Fund, or the BDIF as they do not apply to our service.

  • If the digital exchange suspends activities, there may be price gapping, which may bring significant gains or losses. If (when) the trading does not resume, the entire investment will be lost altogether.

  • No protection when using crypto-assets as a means of payment. When paying for goods and services using crypto-assets, there is no coverage by any refund rights under the laws applicable in Bitpace’s registered places of business, as those offered for transfers from a conventional bank or other payment accounts. Unauthorised or incorrect debits from a digital wallet cannot, therefore, usually be reversed. Acceptance of crypto-assets by retailers is also not permanently guaranteed and is based on their discretion and/or contractual agreements, which may cease at any point and with no prior notice or any grace period thereof.

Exchange, Trading and Settlement Risks:

  • Having crypto-assets with any third party in a custodial relationship has attendant risks. These risks include security breaches, the risk of contractual breach(es), and the risk of loss.

  • Traders in any crypto-asset market are warned that they should pay close attention to their position and holdings and how sudden and adverse shifts in trading and other market activities may impact them.

  • Although Bitpace operates in a capacity which attempts to optimise settlement times for its clients, Bitpace makes absolutely no guarantee on the settlement times of crypto-assets and/or fiat.

Risk of Market Manipulation:

  • The decentralised and largely unregulated nature of the crypto-assets market makes it susceptible to manipulation and fraudulent activities (e.g., pump-and-dump schemes).
  • It is important to recognise that such practices can lead to sudden and significant price movements, potentially negatively impacting your investments.

Technological Risks:

  • Crypto-assets rely on complex technology infrastructure, including blockchain networks and digital wallets. These technologies are subject to various risks, such as hacking, system failures, and security breaches. The loss of private keys or passwords may result in the permanent loss of your assets. Additionally, malicious actors may employ malware and phishing attacks to target individuals involved in the crypto space.
  • Crypto-assets may be stolen from your digital wallet. Digital wallets have a public key and a private key or password allowing access to them. Those digital wallets are not impervious to hackers, and like conventional wallets, crypto-assets may, therefore, be stolen from the digital wallet and most likely remain unrecoverable. Furthermore, if the digital wallet's private key or password is lost, the stored crypto-assets may be lost forever.

Legal and Tax Implications:

  • The legal status of crypto-assets may be uncertain. This can mean that the legality of holding or trading them is not always clear and differs from jurisdiction to jurisdiction. Whether and how one or more crypto-assets constitute property or assets or rights of any kind related to them may also seem unclear.

  • The legal and tax status of crypto-assets also vary across jurisdictions, being subject to ongoing changes. It is important to be aware of the potential legal and tax implications (such as value-added tax or capital gains tax) associated with holding or trading crypto-assets. Independent legal and tax advice should be sought to ensure compliance with applicable laws in your jurisdiction.

Limited Recourse:

  • Crypto-assets transactions may not provide the same dispute resolution mechanisms as traditional financial services.
  • In the event of a complaint or dispute, you may have limited or no recourse to seek resolution or compensation.

Online Systems and Operational Risks

Using Bitpace for crypto-assets services may differ from other service providers, websites, or electronic trading platforms, as well as from trading in a conventional or open market. You are exposed to risks associated with the system, including the failure of hardware and software, downtime of your individual systems and the communications infrastructure (for example, Internet connection interruptions) that you use to connect to our website, APIs, Apps, platforms, and sandbox environment.

Our website, APIs, Apps, platforms, and sandbox environment are provided “as is” and “as available” as set out in our Standard Terms and Conditions.

Operational risks related to Bitpace are inherent in every transaction, account or use of our website, sandbox environment and/or services. Disruptions in Bitpace’s operational processes, such as communications, computers, networks or external factors, may cause access disruptions, delays in the connection, operation of accounts or execution and settlement of transactions. Bitpace does not accept or bear any liability whatsoever concerning its operational processes, except to the extent the failure was caused by Bitpace’s gross negligence, wilful default or fraud.

Safeguarding your Account

Security is pivotal for Bitpace, and we follow strict security practices. Nevertheless, our security may not work without the most essential ingredient: you. Therefore, you also need to take certain precautions to ensure that you and your duly authorised representatives or authorised users are the only ones with access to the respective Bitpace account.

Scammers may use different methods to gain access to your account and perform unauthorised transactions, for example, phishing, malware, and identity theft.

IMPORTANT: Bitpace and none of our employees, representatives or affiliates will ever call, email or SMS/instant message you and ask you for your password and/or 2FA code. If anyone contacts you claiming to represent Bitpace and requests this information, you should end the communication and get in touch with us at [email protected].

In safeguarding your account with Bitpace, you should take measures, such as (but not limited to):

  • Using a strong password.
  • When available, enabling two-factor authentication (2FA).
  • Protecting your email account.
  • Not sharing sensitive information.
  • Checking the URL of the page when you enter your account information (ensuring that you are on www.bitpace.com).
  • Locking your device(s), email and account when not in use by you.

If you believe your account has been compromised, please let us know immediately by contacting us at [email protected]. Please be aware that Bitpace cannot be held responsible for loss of funds or crypto-assets where you have fallen victim to any phishing, scam or other fraudulent attacks, as set out in our Standard Terms and Conditions, yet we will do everything we can to assist you.

Irreversible Transactions

Blockchain transactions are irreversible in nature, and it is impossible for us to reverse a transaction once it has been initiated.

Please note that when we follow your instructions to deliver the crypto-assets to the wallet address specified to us that is outside of our systems, we do not have any control over such wallet address or its respective blockchain network. Wallet address’ public keys do not bear the owner’s name. The losses associated with it will be borne by you.

Risks of Fraud

We take fraud very seriously and are committed to supporting the fight against financial crime. We do not promote transactions towards third parties. We have developed and are following our policies and procedures to prevent fraud, and although we provide a safe environment, such as transactions performed in a 3D secure environment, as well as and when possible - checks we execute to ensure that the recipient’s wallet address does not appear suspicious or flagged as a scam or fraudulently used, we cannot guarantee that you may not fall prey to fraudsters. The losses associated with such a situation will be borne by you.

Fraudsters are counting on you not to investigate before investing or making a purchase or payment, so fend them off by doing your own digging, as it is your own responsibility to take the time to do independent research (for instance, check if the service provider has the relevant authorisation and it is not a clone firm). Unsolicited emails, message board postings, and company news releases should never be the sole basis for your investment decisions. Understand a company’s business and its products or services before investing. Look for the company’s financial statements. Spend some time checking out the person touting the investment before you invest – even if you already know the person socially. Be especially careful if you receive an unsolicited pitch for investing in a company or see that a company is praised online, yet you cannot find current financial information about it from independent sources. Protect yourself online, as online and social marketing sites offer a wealth of opportunities for fraudsters. Never be rushed into a purchase; read reviews of the site you are shopping on and take time to check throughout the process - criminals carrying out scams often apply pressure tactics while pretending to be a trusted authority or company.

Get acquainted with different types of fraud and red flags that may signal investment fraud, such as but not limited to (a) if it sounds too good to be true, it is; (b) watch for “phantom riches”; (c) guaranteed returns; (d) beware of the “halo” effect; (e) watch out for pitches that stress how “everyone is buying”; (f) pressure to send crypto-assets right now.

Conflicts of Interest

Bitpace is committed to upholding a high level of integrity and adhering to best practices and requirements published by relevant industry groups and regulatory bodies. Nonetheless, our interests may conflict with yours.

We regularly monitor conflicts of interest (inherent in our business model, the interests of our clients and managing our business towards an acceptable return), as there is active management oversight, including escalation and resolution channels.

Pricing Factors

The prices we quote should be considered indicative unless you have been informed the price is firm. Unless we have informed you otherwise, any price we quote to you is an all-in price, inclusive of any markup. It may differ from the price at which we may be able to transact, or have transacted, with other counterparties.

Our pricing varies between counterparties and is determined at our discretion by taking into account factors and pricing inputs we deem appropriate.

Information Handling

Protecting the confidentiality and security of our dealings with you and your information is an integral part of how we do business. We have policies and controls that are designed to protect your confidential information. Our personnel may have access to and use information, including but not limited to your transactions. We aim to restrict access to your information to those employees who have a “need to know” such information to perform their duties and to carry out the purpose for which the information is provided to them.

We may utilise third-party vendors, for example, for data storage, for screen checks, and security. Third parties are required to enter into confidentiality agreements with us and agree to keep any information we disclose to them confidential. We may also share your information with authorities as required by applicable laws and regulations.

The handling of personal data is addressed in our Standard Terms and Conditions and Privacy Policy.