Risk Disclosure Statement

1. This Risk Disclosure Statement (the “Statement”) relates to risks associated with the Services provided by BC MarketPlace (HK) Limited (hereinafter referred to as “ANXONE”, “us”, “we”, or the “Company”) to counterparties (“you” or the “Counterparty”) under the relevant Terms of Use applicable to the Counterparty’s relationship with ANXONE (the “Terms”), including any applicable product annex and/or any additional risk disclosures or Company policies specific to that product or service. The Statement must be read together with the Agreement. Defined terms in this Statement have the same meaning as the Agreement unless stated otherwise.

2. IT IS EXTREMELY IMPORTANT THAT COUNTERPARTIES READ THIS STATEMENT CAREFULLY AND UNDERSTAND ITS CONTENTS. THIS STATEMENT DOES NOT PURPORT TO ADVISE YOU OF ALL OF THE RISKS AND SIGNIFICANT ASPECTS OF ANY TRANSACTION. YOU SHOULD CONSIDER ANY ADDITIONAL RISKS CONTAINED IN THE AGREEMENT AND/OR PRODUCT AND COUNTRY ANNEXES. PLEASE CONTACT YOUR OWN INDEPENDENT TAX, LEGAL, FINANCIAL AND OTHER ADVICE BEFORE SIGNING THE AGREEMENT.

3. Before deciding to use any of ANXONE’s Services or enter into any Transaction, Counterparties must consider the risks inherent in such Services or Transactions. The underlying assets (including any digital representation of value that is not fiat currency and that can be transferred, stored or traded electronically, hereinafter referred to as "Digital Assets") or products insofar as they relate to them, the extent of the financial and economic risk to which they are exposed to as a result of any Transaction, tax, regulatory and accounting treatment arising from any Transaction. Additionally, Counterparties should carefully read all relevant documentation, including the Agreement, and any applicable Country or Product Annexes (together with any terms sheets, offering documents, white papers, or prospectuses that those documents may refer to), prior to taking any action.

4. Nothing in the Agreement or this Statement constitutes legal, investment or financial advice based upon any Counterparty’s circumstances, nor is it a recommendation to participate in any of the Services or an endorsement or recommendation of any of the products available. Where the Counterparty is unclear as to the meaning, effect or consequences of any of the disclosures, disclaimers or warnings in the Agreement or the Statement, they are strongly advised to seek independent legal and financial advice before entering into the Agreement or using any of the Services.

5. 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 Transaction entered into with ANXONE and any additional loss over and above the initial amounts 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 Transaction.

6. Transaction and Service Risks:

• Suitability: You should make the decision in relation to the Agreement and any Transactions with ANXONE only after due and careful consideration. You should determine whether a Transaction is appropriate in light of your experience in similar transactions, your objectives in engaging in the Transaction, financial resources and other relevant circumstances. If you are not sure that the Transaction is suitable for you, you should obtain independent legal, tax or financial advice. The greater risk profile and other characteristics of Digital Assets mean that they are markets more suited to professional and other sophisticated investors, and investors who have experience in, and knowledge of, Digital Asset markets.

• Assets not held on deposit: Any assets transferred to ANXONE are not held as ‘deposits’ within the meaning of the Banking Ordinance (Cap. 155). Any assets transferred to ANXONE in respect of the Account are transferred to ANXONE on a title transfer and proprietary basis, free from any encumbrance for the sole purpose of entering into Transactions and related activities in respect of the Digital Asset Service (including the satisfaction of certain fees, costs and charges). ANXONE is not regulated by the Hong Kong Monetary Authority, and any asset transferred to ANXONE and/or held in ANXONE’s accounts are not protected deposits, and not protected by the Deposit Protection Scheme in Hong Kong. Neither ANXONE’s activities, nor Digital Assets are subject to specific regulation or supervision of a Hong Kong regulatory authority.

• Assets not held in segregated accounts: Unless otherwise agreed with you in writing, ANXONE does not hold Counterparty's assets in segregated accounts. Counterparties are an unsecured creditor of ANXONE, with no specific security or charge over particular assets.

• Off-exchange transactions: Unless otherwise agreed in writing by the Parties in respect of a specific Transaction, all transactions conducted between Counterparties and ANXONE are not carried out on exchanges, whether regulated or unregulated. Off-exchange transactions may involve increased risks since it may be difficult to liquidate existing positions, determine a fair price or assess exposure to risk. They are not as transparent as transactions conducted on any recognised exchange.

• Commissions: Before conducting any Transaction, Counterparties should obtain details of all commissions, fees and other charges for which the Counterparty will be liable. If any charges are not expressed in monetary terms (e.g. as a percentage of transaction value), the Counterparty should request the Fees that will be applicable in specific monetary terms prior to entering into a Transaction.

• Suspensions of Trading / Network Events: Under certain conditions it may be difficult or impossible to liquidate a position in Digital Assets. Certain Network Events (including total failure of a network) may occur rapidly and affect the ability of holders of Digital Assets from conducting transactions. Information relating to these Network 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.

• Potential for extreme volatility: Digital Assets routinely have periods of high volatility, and occasionally have periods of extreme daily or even hourly volatility. 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 a Digital Asset, or governmental or regulatory activity. Demand for tokens may be partially or wholly driven by speculation and/or market sentiment.

• Network Events / Forks / Airdrops etc: As set out in the Agreement, Digital Assets may be subject to various Network Events, including Forks, Airdrops, attacks on the security, integrity or operation of the networks, or Network Participants making a binding decision in relation to the network underlying a Digital Asset. 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 of any Digital Assets, or even result in the shutdown of the network or platform associated with the Digital Asset. Such Network Events may be beyond the control of you or ANXONE, or to the extent ANXONE has any ability to impact the Network Event, ANXONE’s decision or actions may not be in your interests. Where you transfer Digital Assets to ANXONE which are the subject of a Network Event, you may not be entitled to the proceeds arising from any Network Event, and ANXONE is generally entitled to keep any Digital Assets created as a result of Network Events (for example, in circumstances where there is a fork in the network). You should not transfer assets to ANXONE where you wish to receive the benefits of those Network Events.

• Not a research report: The contents of any communication from ANXONE to you have been prepared by personnel in the sales and trading division of ANXONE. This material does not purport to be, and is not intended to be, a “research report”, “investment research” or “independent research” as may be defined in applicable laws and regulations worldwide. It is intended for your general information about market conditions and recent events only. It is not intended to be provided with your particular objectives, circumstances and interests in mind. Neither ANXONE nor the individual sender is soliciting any particular action or transaction based upon it by providing information to you.

• Commercial arrangements: ANXONE may have a relationship with other entities which may not be disclosed to you. ANXONE may act as a principal in Digital Assets, and ANXONE may act as an advisor to (or seek to advise) issuers of Digital Assets, which may compete with or impact other existing Digital Assets. ANXONE sales and trading personnel may be compensated in part based on trading activity and volume. ANXONE and its personnel may have act or take a trade position either on behalf of ANXONE’s proprietary interests or, where permitted, in their personal accounts that is contrary to your proposed or current position. As such, you should be aware that ANXONE and its personnel may be subject to an actual or potential conflict of interest. You should not rely on email or written communications as being either independent from the interests of ANXONE and its associated personnel, since ANXONE and its personnel’s position may conflict with your own.

7. Cyber Security Risks:

• Loss of private key(s) is permanent and irreversible: Losing control of your private key(s) may permanently and irreversibly deny you access to Digital Assets. Neither ANXONE nor any other person will be able to retrieve or protect Digital Assets to which you hold the private key(s) for. If private key(s) are lost, it may become impossible to transfer Digital Assets to any other address or wallet, and you are solely responsible for securing your private key(s) in a manner that meets your individual security circumstances.

• Source code changes and flaws: The various source codes underlying Digital Assets and smart contracts are subject to change and may at any time contain one or more defects, weaknesses, inconsistencies, errors or bugs. Unless otherwise represented in writing by ANXONE, no audit or investigation has been conducted on any source code produced by parties other than ANXONE.

• Cryptographic advancements: Developments in cryptographic technologies and techniques, including the advancement of artificial intelligence and/or quantum computing, pose security risks to all cryptography-based systems including Digital Assets. Applying these technologies and techniques to Digital Assets and/or the ANXONE Platform may result in theft, loss, disappearance, destruction, devaluation or other compromises of Digital Assets, the ANXONE Platform or your data.

• Reliance on the internet: Digital Assets and the ANXONE Platform rely heavily on the internet. 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. The result of the above may be that your order is not executed according to your instructions or not at all at the desired time.

• Unauthorized access: Unauthorized third parties may access the use of your Account and effect transactions without your knowledge or authorization, whether by obtaining control over another device or account used by you, or by other methods. 8. General Risk Statements:

• Market Risk: This is the possibility for an investor to experience losses due to changes in market prices of Digital Assets. It is the exposure to the uncertain market value of a portfolio due to price fluctuations in the Digital Assets themselves (either by reference to fiat currency, or other Digital Assets as the case may be).

• Liquidity Risk: There is the possibility for you to experience losses due to the inability to sell or convert assets into a preferred alternative immediately or in instances where conversion is possible but at a loss. Such liquidity risk in any particular Digital Asset may be caused by an absence of buyers, limited buy/sell activity or underdeveloped secondary markets in the Digital Assets. Where significant liquidity risk occurs, ANXONE reserves the right to suspend its own trading in such Digital Assets, which may mean ANXONE is unable to provide any particular service in respect of Digital Assets on the ANXONE Platform.

• Counterparty/Hedging Party Credit Risk: This is the possibility for you to experience losses due to ANXONE's failure to settle Digital Assets or fiat currency, or make any outstanding payment of obligations. In addition, where ANXONE hedges its exposure or obligations under any transaction between you and ANXONE with any third party and such third party does not make, when due, any payment or delivery under such hedge (or an event of default, termination event or equivalent otherwise occurs in respect of such hedge), ANXONE may incur losses and costs as a result thereof. In such circumstances, ANXONE is entitled to take such losses and costs into account in respect of any amounts (including, without limitation, any termination amount or settlement amount) payable in respect of such transaction between ANXONE and you. Accordingly, the occurrence of any such event, and the determination by ANXONE of any such resulting losses and/or costs, may significantly reduce (including to zero) any amount otherwise payable by ANXONE to you or increase any amount payable by you to ANXONE in respect of one or more transactions. As such, you are exposed to the credit risk of parties with whom ANXONE may hedge its exposures and/or obligations in respect of any transactions with you.

• Inflation Risk: Digital Assets may, either because of the inherent design of the Digital Asset or through Network Events, not be a fixed supply of assets. Where additional Digital Assets are created, the asset’s price may decline due to inflationary effects of adding additional Digital Assets to the total assets available.

• 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 over the Platform, and may be able to influence or cause 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 tokens.

• Country Risks: If an investment 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 Transactions you should satisfy yourself about any rules or laws relevant to those particular 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 Transactions of Digital Assets, we may be required to discontinue your access to the ANXONE Platform and may not be permitted to transfer Digital Assets held in the Account back to you or permit you to transfer Digital Assets out of the ANXONE Platform to yourself or others, until such time as the regulatory environment permits us to do so.

• Taxation and Required Reporting to Taxation Authorities: Unless otherwise specified, you are responsible for all taxes in respect of a Transaction, including past or retrospective taxes which are imposed on Transactions. Before entering into any Transaction, you should understand the tax implications of acquiring, entering into, holding and disposing the Digital Asset the subject of the Transaction. Tax implication of any Transaction are dependent on the nature of your business activities and the Transaction in question. You should therefore consult your independent tax advisor to understand the relevant tax considerations. ANXONE does not offer tax advice of any nature. ANXONE will comply with all of its obligations in terms of reporting to relevant taxation authorities any applicable Transaction which it is required to disclose, including any details you have provided us about tax residency from time to time. You should seek independent tax and financial advice on what this may mean based on your individual circumstances.

• Regulatory Uncertainty: All investments and Transactions are potentially exposed to regulatory/legal risk. The legal and regulatory treatment of 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 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 an investment or Transaction. Legal changes may have the effect of making a previously acceptable investment illegal or subject to substantial restrictions which may affect the ability to liquidate a position. Changes to related issues such as taxation may occur and radically affect the value or profitability of a Digital Asset. Such risk is unpredictable and depends on various geopolitical, economic, sovereign and other factors. Risks may be asymmetrical between established and emerging markets, and may affect some Digital Assets significantly more than others. ANXONE recommends you obtain independent legal, tax and financial advice and that you continue to monitor the legal and regulatory position in respect of your investments and Transactions.

• Emerging Markets: Price volatility in emerging markets and asset classes can be extreme (where Digital Assets are an emerging market and asset class). Price discrepancies and market dislocation is not uncommon. As news about Digital Assets is made available to the public (which may not be before insiders have traded), markets may react with extreme volatility over a short period of time. Markets in Digital Assets may not have the same level of regulation or rules governing transparency, anti-manipulation measures, “circuit breakers” or other mechanisms found in more developed markets.

• No assets or property underlying Digital Assets: Digital Assets may confer no ownership interest in any assets or property. Where Digital Assets are payment or utility tokens, there is no underlying property to those Digital Assets. Digital Assets generally have no liquidation rights should the issuing foundation or company undergo an Insolvency Event.

• No governance rights attaching to Digital Assets: Unless specified, Digital Assets are unlikely to carry governance rights in the same way that traditional securities may. Network Participants may be capable of influencing or carrying out Network Events in respect of Digital Assets, which could negatively affect the utility, value or price of the Digital Asset. It is your responsibility to understand what governance and voting rights apply to particular Digital Assets.

• Lack of Information Available: You may not have full access to all the information relevant to the particular Digital Asset, or its underlying platform or network. It may not be possible to obtain updated information regarding the progress or any changes to particular Digital Assets, or their underlying platforms or network. Many Digital Asset issuers or operates may also have no operating history or track record that any be used to evaluate the ability to achieve their stated project goals.

• Currency or exchange rate risks: Where Transactions are denominated in currencies or particular Digital Asset rates other than your primary reference currency or Digital Asset (including in the case of Digital Asset/Digital Asset Transactions or denominated in stable/payment tokens), or where you convert funds or Digital Assets upon making an investment, there is the risk that if the exchange markets move against you, then upon maturity or any earlier dealing the net proceeds converted into your primary reference currency or Digital Asset, or the currency or Digital Asset from which the initial funds or Digital Asset were converted (as the case may be), may be significantly less than the initial investment amount in your primary reference currency or Digital Asset on the date of the initial Transaction, and that any income or gains made may be entirely negated. 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.

• Interest Rate Risk: Interest rates can rise as well as fall. The relationship between Digital Assets and interest rates is uncertain, and the value of Digital Assets may be negatively affected by interest rate changes. Where you have used credit provided to you by a third party to purchase Digital Assets from ANXONE, interest rate changes may magnify any losses.

• Operational risk: Operational risk, such as breakdowns or malfunctioning of essential systems and controls, including IT systems or Digital Asset Networks themselves, may affect the value of Digital Assets generally. In particular, Digital Assets may suffer from a concentration of operational risk during development, including key personnel, governance and financial control risk.

• Legal status of Digital Assets, Transactions and the ANXONE Platform: The laws of various jurisdictions, standards or approaches published in statements by regulators may apply to Digital Assets, and Transactions or Services offered through the ANXONE Platform. The application of these laws, regulations, standards and regulatory approaches to Digital Assets is largely untested, and laws and regulations are subject to change without prior notice to either ANXONE or you. In particular, any current governmental or regulatory tolerance of Digital Assets may change rapidly, and Digital Assets may at any time be deemed to be a security, investment, asset or money by governmental authorities or regulators, which will affect ANXONE’s ability to conduct Transactions or hold Digital Assets generally. As a result of regulation and legislation around Digital Assets, or adherence by ANXONE to regulatory standards or approaches, the ANXONE Platform may not be available in certain jurisdictions, or at all. Changes to access to the ANXONE Platform may be made unilaterally on short or no notice to you. ANXONE may receive formal or informal queries, notices, requests or warnings by governmental authorities and regulators. Action may be taken by governmental authorities and regulators against ANXONE. As a result of such events, ANXONE may be required to discontinue the Services, Transactions or the ANXONE Platform. You may also be subject to governmental or regulatory action by conducting Transactions, holding Digital Assets and/or using the ANXONE Platform. You should take independent legal advice on the Agreement and the consequences of specific Transactions before signing the Agreement or conducting Transactions.


Last updated: 22 February 2019.