Risk Disclosure Statement

This risk disclosure is provided in accordance with Article 63 of the Markets in Crypto-Assets Regulation (EU) 2023/1114 (“MiCA”) to help you understand the potential risks associated with trading crypto assets. Trading crypto assets involves significant risks of financial loss. By using our services, you acknowledge that you have read, understood and accept these risks, and agree that Kriptomat disclaims liability to the fullest extent permitted by applicable law.

The risks mentioned are illustrative and not exhaustive. Additional risks, including emerging threats, may arise. You are encouraged to educate yourself and remain informed. This notice complements our Terms of Use and other risk-related disclosures.

1. High-Risk Investment 

Crypto assets exhibit high volatility, with values capable of rapid fluctuations. This volatility, combined with the potential lack of liquidity, may result in sudden and significant losses.

The valuation of crypto assets can be influenced by a range of unpredictable factors including market sentiment, news, software changes, regulation, and security threats. As such, these assets can lose their entire value.

Crypto assets are not issued, backed, or guaranteed by governments or financial institutions and do not fall under deposit guarantee schemes. Their valuation does not follow regulated market mechanisms.

Crypto assets are not covered by investor compensation or deposit guarantee schemes, and their valuation may not follow mechanisms used in regulated financial markets. This reflects their classification under MiCA as unregulated financial instruments distinct from traditional securities and banking products.

2. Risk of Delisting Crypto Assets 

Kriptomat may delist any crypto asset at its discretion. Delisting may result in losses due to impaired liquidity or inability to transfer assets.
In the event of a delisting, Kriptomat will provide reasonable notice where feasible, allowing users to manage their positions accordingly, in line with our obligations under MiCA Article 63(3).

3. Financial Tolerance and Risk Attitude

Trading crypto assets involves high risk. You must evaluate your financial condition, risk tolerance, and suitability to engage in such activities. Do not invest assets you cannot afford to lose.

By using our services, you represent and warrant that you possess the necessary knowledge and understanding of the risks involved, including the risk of total loss of your investment. You should not trade or invest in crypto assets if you do not understand these risks.

4. Technology and Cybersecurity Risks

Distributed ledger technologies (DLTs) are evolving and may exhibit operational vulnerabilities.

Kriptomat adheres to international cybersecurity standards (ISO 27001 certified) and complies with operational risk and IT management requirements in accordance with Article 76 of MiCA. Despite these efforts, users must be aware that inherent risks associated with blockchain technology and infrastructure may still result in the partial or total loss of crypto assets.

Cyberattacks, theft of private keys, protocol bugs, and system malfunctions can result in irreversible losses. By using Kriptomat, you accept the risks related to technology and the internet.

While Kriptomat implements robust security measures, in the event of hacking, system vulnerabilities, or other incidents leading to asset loss that are beyond our reasonable control, such events may be considered force majeure events under applicable law, subject to regulatory requirements and mandatory consumer protection provisions.

5. Custody and Withdrawal Risks

Kriptomat ensures the segregation of client assets from company funds, maintaining secure custody of assets in compliance with Article 75 of MiCA. Regular due diligence is conducted on third-party custodians and liquidity providers.

Some crypto assets may be held with third-party liquidity providers who are subject to our due diligence requirements under MiCA. In these cases, Kriptomat will obtain your explicit prior consent and provide detailed information about the arrangement and associated risks before transferring any assets to such providers. While subject to audits, these assets are under third-party control, and Kriptomat cannot guarantee equivalent security or accept liability for any resulting loss.

6. Legal and Jurisdictional Risks

While Kriptomat is regulated under Estonian and EU law, including MiCA, users must understand that local laws in their country of residence may impose additional obligations. These may include reporting obligations, tax treatments, or legal restrictions on crypto asset usage.

Users remain solely responsible for ensuring compliance with applicable local laws.

7. Fraud and Scam Warnings

Kriptomat is committed to fraud mitigation and user protection, as required under Article 76 of MiCA. We will never contact users by phone or through unofficial channels, and we do not employ brokers or agents. We will never ask you for your account credentials or instruct you to install any remote access software on your device.

Always verify links and communication channels. Never send funds or credentials to unverified addresses. For guidance, refer to our Fraud Awareness Note.

8. DEX Tokens and Web3 Wallet Risks

Services related to decentralized exchanges (DEXs) and Web3 wallets are not currently regulated under MiCA unless a legal entity is clearly responsible. These services are provided “as-is”.

Risks include smart contract bugs, market manipulation, liquidity issues, cyberattacks, slippage, scams, and integration failures. If you use a Kriptomat Web3 Wallet, note that it is not subject to the same custodial protections as other Kriptomat wallets.

9. Service Availability

Kriptomat does not guarantee uninterrupted service. Periods of downtime or congestion may limit access to buying, selling, or transferring assets. Kriptomat shall not be held liable for such occurrences.

10. Final Disclaimer and Complaints

All users are encouraged to understand the risks involved and seek independent financial, legal, or tax advice when necessary. No information provided by Kriptomat constitutes investment or legal advice.

If you have questions or concerns regarding our services, or wish to file a complaint, please consult our Complaints Handling Policy available on our website. This procedure complies with MiCA’s requirements for user protection and transparency.

For a summary of your rights under the MiCA Regulation, including information about custodial services and consumer protections, please refer to our MiCA Rights Summary on our website.