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General crypto-asset investment risk warning for Spanish residents
General crypto-asset investment risk warning for Spanish residents

Possible risks when investing in crypto assets for Spanish residents

Updated over a week ago

General crypto-asset investment risk warning for Spanish residents

YouHodler, S.A. ("YouHodler"), hereby provides you with general information about the main risks associated with the investment and use of cryptoassets. Please note that the description below does not set out each and every specific risk associated with each of the services offered by YouHodler, nor how each of these risks may affect you depending on your personal circumstances.

Prior to contracting the services offered by YouHodler, you should read carefully and duly understand the risks inherent to the investment and use of cryptoassets listed below. For this purpose, we also recommend that you carefully read the Terms of Service, in order to properly understand the services provided by YouHodler and the risk associated.

The main risks that you should be aware of prior to investing in cryptoassets are as the following:

1.- No personal advice

YouHodler does not provide any investment advice, financial advice, business advice or any other type of advice to its users. None of the communications or information provided by YouHodler is intended to be, or should be considered or construed as, personal advice of any kind. The User is solely responsible for determining whether any investment, investment strategy or transaction is suitable for their personal investment objectives, financial circumstances and risk tolerance. If any doubt, the User should request advice form a professional in the field.

YouHodler also does not provide any legal or tax advice. Crypto asset transactions may have tax implications. Users must inform themselves and be aware of the tax obligations arising from the execution of transactions with cryptoassets and, in particular, of the tax obligations arising from the services provided by YouHodler and comply with such tax obligations. It is expressly recommended that Users seek independent advice if they have any doubts about the tax status or obligations with respect to cryptoassets or services provided by YouHodler.

2.- High risk investment product

The value of investments and the returns obtained from them may experience significant upward and downward variations and the entire amount invested may be lost.

Investments in early-stage projects involve a high level of risk, so it is necessary to properly understand their business model.

The crypto assets offered by YouHodler are not covered by client protection mechanisms such as the Deposit Guarantee Fund or the Investor Guarantee Fund.

The prices of crypto assets are established without any mechanisms that ensure their correct formation, such as those used in regulated securities markets.

Changes in the value of crypto assets can be significant and can occur rapidly and without prior notice. The past performance of a particular crypto asset is not a reliable source of information or indicator of expected future performance of crypto assets.

Many crypto assets may lack the liquidity necessary to allow an investment to be unwound without significant losses, since their distribution among investors, both retail and professional, can be very limited.

3.- Technology Risks

Distributed ledger technologies are still in an early stage of development as many of these networks have been created very recently, so they may not be sufficiently tested and there may be significant failures in their operation and security.

The registration of transactions in networks based on distributed ledger technologies is carried out through consensus protocols that may be susceptible to attacks that attempt to modify the register. If they were to be successful there would be no alternative register that backs up the transactions and hence the balances corresponding to the public keys and therefore all the crypto assets could be lost.

The anonymity that crypto-assets can make them a target for cyber criminals, since if credentials or private keys are stolen the crypto-assets may be transferred to addresses that make their recovery difficult or impossible.

The custody of crypto assets is a large responsibility since they can be lost in their entirety in the event of theft or loss of private keys.

YouHodler is a Swiss company registered as a provider of services of exchange of virtual currency for fiat currency and custody of electronic wallets in the corresponding registry of the Bank of Spain, with code number D939, and is therefore subject, as regards the provision of such services in Spain, to Spanish law.

Specifically, the offer of crypto-assets is regulated by Circular 1/2022, of January 10, of the National Securities Market Commission (“CNMV”), regarding the advertising of crypto-assets presented as an investment object, as well as by article 247 of Law 6/2023, of March 17, of the Securities Market and Information Services Law.

4.- Legal Risks

The acceptance of crypto assets as a means of exchange is still very limited and there is no obligation to accept them.

YouHodler has its registered office in Switzerland, so that the resolution of any dispute could be costly and outside the scope of competence of the Spanish authorities.

Regarding the custody services of electronic wallets offered by YouHodler, the user must be aware that the cryptoassets are not available to the user since they are in digital wallets custodied by YouHodler. The user does not have access to the private keys of these wallets but has the power to operate with the cryptoassets held in these wallets. It should be noted, though, that even if the user does not have the private keys and cannot dispose of the cryptoassets, except to trade with them, the ownership of the cryptoassets remains with the user.

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