General Risk Warning

How to Interpret This Risk Warning 

  • Capitalised Terms: All capitalised terms used in this Risk Warning that are defined in the Australian Blockchain Association Pty Ltd (“AusBlock”, “ABA”, “we”, “us” or “our”) Terms and Conditions (the “Terms and Conditions” or “T&Cs” which may include any relevant Product Terms referenced within the Terms and Conditions) have the same meaning as set out in the Terms and Conditions.  
  • Purpose: This Risk Warning provides important information about some of the key risks involved in using AusBlock websites, applications, and other platforms (collectively, “services”). It is intended as a general guide and does not capture or detail all possible risks nor does it take into account your individual financial situation, objectives, or risk tolerance.  
  • Personal Assessment: Before using any AusBlock services or products, you should carefully assess your financial situation, risk appetite, and objectives, and consider seeking independent professional advice where appropriate.  

AusBlock Services 

  • Scope: AusBlock offers various products and services associated with Digital Assets, including (but not limited to) facilitating digital currency exchange, wallet services, and other related functionalities.  
  • Assumption of Risk: By using AusBlock services, you acknowledge and accept the risks described in this Risk Warning and any other applicable terms, and agree that you will assume sole responsibility for all consequences of your usage of AusBlock services.  
  • Continuous Review: AusBlock may update its products, services, or terms from time to time. You must remain aware of these changes and continually review whether your use of AusBlock services remains suitable for you.  

No Personal Advice 

  • Informational Purposes Only: AusBlock provides factual information about our services and Digital Assets. However, we do not provide any personal, tailored, or specific financial, legal, or tax advice to our users.  
  • Independent Decision-Making: You are fully and solely responsible for all decisions regarding the purchase, sale, holding, or use of any Digital Asset through AusBlock’s platform. Any reliance on our materials, or on staff or automated support communications, is at your own discretion and risk.  
  • No Fiduciary Responsibility: AusBlock does not act as your investment or financial advisor, nor do we owe you a fiduciary duty under any circumstances. You should consider seeking advice from licensed professionals if you are uncertain about your decisions.  

No Monitoring 

  • No Portfolio Management: AusBlock does not proactively monitor your trading activity, financial circumstances, or personal risk appetite.  
  • User Autonomy: All transactions and account activities you undertake on the AusBlock platform are initiated at your own risk. We do not assess whether your current holdings or trading approach is compatible with your financial goals.  
  • Sole Responsibility: You must regularly review your account status, set your own risk parameters, and ensure that your use of the platform aligns with your financial means and objectives.  

No Tax, Regulatory, or Legal Advice 

  • Tax Obligations: You are entirely responsible for understanding and fulfilling any tax obligations resulting from your Digital Asset transactions on the AusBlock platform, including but not limited to income tax, capital gains tax, and transaction-based taxes.  
  • Regulatory Compliance: Laws and regulations relating to Digital Assets can differ significantly by jurisdiction and may change over time. It is your duty to stay informed about and comply with any local or international regulations applicable to your circumstances.  
  • Legal Uncertainties: Digital Assets may not be classified as “property” under some legal frameworks, which could impact the protection and enforcement of your rights. If in doubt, you should consult a qualified attorney in your jurisdiction.  

Market Risks 

  • Price Volatility: Digital Assets can exhibit extreme price volatility, driven by changing supply and demand, public sentiment, regulatory actions, and technological developments. This may cause large swings in the value of your holdings over short periods.  
  • Speculative Nature: Many Digital Assets are speculative investments. There is a significant risk that any Digital Asset’s price could fall rapidly, even to zero, resulting in a total loss of your invested capital.  

Systemic and Systematic Risks:  

  • Systemic Risk: A major failure in one significant market participant, sector, or Digital Asset can trigger a “domino effect,” causing widespread disruption or collapse in the broader Digital Asset market.  
  • Systematic Risk: Broader economic, sociopolitical, or technological events can affect the market as a whole, impacting Digital Assets regardless of their specific characteristics.  
  • Negative Perceptions: Regulatory scrutiny, high-profile security breaches, or negative media coverage can erode investor confidence in Digital Assets, exacerbating price volatility.  

Counterparty Risk 

  • Partnerships & Liquidity Providers: AusBlock may depend on third-party liquidity providers, payment processors, or other external service partners. If any such counterparty fails, experiences significant operational difficulties, or becomes insolvent, your ability to trade, withdraw, or deposit could be delayed or compromised.  
  • Borrowing & Lending: To the extent that AusBlock or its affiliates offer borrowing, lending, staking, or yield-generating products, your Digital Assets may be loaned out to other parties. If the borrower defaults, your access to these assets (or expected returns) could be delayed or impaired.  
  • Disputes & Operational Failures: A dispute or operational failure involving a counterparty might result in partial or total loss of your funds, slippage on trades, or the inability to execute trades or withdrawals at expected prices or times.  

Liquidity Risk 

  • Market Depth: Low trading volume or thin order books for certain Digital Assets may prevent you from quickly buying or selling at desired prices, potentially causing slippage and unexpected losses.  
  • Market Volatility: High volatility may result in short-term liquidity squeezes, during which it could be difficult or impossible to enter or exit positions.  
  • Price Gaps: In times of market stress or rapid price movements, the bid-ask spread can widen significantly, and large price gaps can occur, increasing the cost of trading.  

Fees & Charges 

  • Published Fees: The fees and charges applicable to AusBlock services are set out here. These may include trading fees, withdrawal fees, deposit fees, or other service-related costs.  
  • Fee Adjustments: AusBlock may revise its fees and charges at its sole discretion and without prior notice. Such changes can affect your overall trading or investment costs.  
  • Impact on Returns: Fees can accumulate and significantly reduce net profits, especially for frequent traders or those using leveraged products.  

Availability Risk 

  • Platform Uptime: While AusBlock strives to provide uninterrupted service, we cannot guarantee the continuous availability of our platform. Unforeseen issues, such as technical glitches, cybersecurity incidents, or network congestion, may disrupt access.  
  • Geographic Restrictions: Certain features, products, or services may be restricted by local regulations, preventing access or limiting the scope of available offerings. Users are responsible for understanding the applicable rules and must not violate jurisdictional constraints.  
  • Unplanned Outages: During unplanned outages, you may be unable to buy, sell, receive, or send Digital Assets. Such downtime can lead to missed opportunities or forced holding of positions in adverse market conditions.  

Third-Party Risk 

  • External Service Providers: AusBlock may rely on third-party custodians, payment gateways, or banking partners to facilitate transactions. These services may impose additional terms and conditions on you, which you are responsible for reviewing.  
  • Limited Control: AusBlock does not fully control third-party systems. Failures, interruptions, or vulnerabilities in external services may directly affect your access to or the security of your Digital Assets.  
  • No AusBlock Liability: Unless explicitly stated otherwise in the Terms of Use, AusBlock bears no liability for losses arising from or related to the actions or inactions of these third parties, including issues such as delayed transfers or lost assets.  

Security Risk 

  • Cyberattacks & Hacking: Digital Assets and online exchange platforms are frequent targets of hackers. Although AusBlock employs security measures to mitigate risks, no system is entirely immune to breach attempts.  
  • Irreversible Transactions: Most Digital Asset transactions are irreversible once confirmed on the blockchain. Any losses due to fraudulent or unauthorised transactions (e.g., theft of private keys or hacking of your account) may not be recoverable.  
  • User Responsibility: You must safeguard login credentials, private keys (if applicable), and other sensitive information. Avoid sharing credentials or using insecure devices/networks for account access.  

Risks Related to Digital Assets 

  • Protocol-Level Risks: The underlying technologies of many Digital Assets (blockchains, smart contracts) may contain bugs, vulnerabilities, or be subject to breakdowns and “forks.” These events can affect value and functionality.  
  • Irreversible Nature: Once confirmed, blockchain transactions generally cannot be cancelled or reversed. Any errors, whether accidental or malicious, could lead to permanent loss of funds.  
  • Hard Forks and Upgrades: If a blockchain network undergoes a “hard fork,” it may lead to two (or more) competing versions of the blockchain and the creation of new tokens. The original token’s value could be adversely affected, and additional complexities in storing, trading, or claiming new tokens may arise.  
  • Concentration Risks: If a small number of holders control large amounts of a specific Digital Asset, substantial buy/sell actions by these holders may lead to sharp market moves.  
  • 51% Attacks: A malicious actor controlling over 51% of a network’s hash rate or consensus power could manipulate transactions, undermining the trust and value of the affected Digital Asset.  

Monitoring Risks 

  • 24/7 Market Operation: Digital Asset markets do not adhere to standard trading hours. Significant price changes can occur at any time, including weekends and public holidays.  
  • Sudden Shifts: Rapid price changes may leave little time to react, potentially resulting in larger-than-expected losses or gains.  
  • Self-Monitoring: You are responsible for actively monitoring your positions and mitigating your own exposure, for instance through stop-loss orders or regular reviews of your holdings. AusBlock does not perform this function on your behalf.  

Communication Risks 

  • Electronic Communication Vulnerabilities: Emails, chat messages, and other digital communications may be subject to interception, delay, or unauthorized access.  
  • Accuracy & Timeliness: In the event of communication network failures, you may not receive timely updates or confirmations about your transactions.  
  • Phishing & Fraud: Scammers may pose as AusBlock or otherwise direct you to fraudulent websites. Always verify URLs and never share your private credentials.  

Currency Risk 

  • Exchange Rate Fluctuations: Trading between currencies (fiat or otherwise) involves exposure to exchange rate movements that can amplify gains or losses.  
  • Multi-Currency Holdings: If you hold balances in various currencies, fluctuations in cross-rates may affect the overall value of your portfolio, even if you do not actively trade those currencies.  

Legal and Regulatory Risks 

  • Uncertain Legal Status: Digital Assets are unregulated or subject to evolving regulations in many jurisdictions. Legislative or policy changes could restrict use, impose taxation, or even outlaw trading of certain Digital Assets.  
  • Compliance Requirements: AusBlock are subject to Anti-Money Laundering (AML), Counter-Terrorist Financing (CTF), Know Your Customer (KYC), or other regulatory frameworks, which can lead to additional checks or account limitations.  
  • Jurisdictional Variations: Some countries have enacted sweeping regulations (or bans) on Digital Assets, which may affect your ability to trade, withdraw, or otherwise deal with your holdings.  

Additional Product-Specific Risks 

Depending on which additional services AusBlock offers, some or all of the following may apply:  

Leverage & Margin Trading  

  • Amplified Losses: Leverage magnifies potential gains but also intensifies potential losses, sometimes exceeding your initial deposit.  
  • Margin Calls & Liquidation: Failure to meet margin requirements (for example, if market prices move against your position) can result in forced liquidation of assets, potentially at a significant loss.  

Staking & Yield Products  

  • Staking Risks: Staked assets may be subject to “slashing” or other penalties if a validator misbehaves or if the protocol encounters errors.  
  • Smart Contract Vulnerabilities: Yield farming or DeFi products may rely on smart contracts that can be hacked or exploited.  

Futures & Options  

  • Complex Instruments: Derivative products often require advanced market knowledge to manage effectively.  
  • Liquidity Constraints: Illiquid derivative markets can lead to large bid-ask spreads and increased likelihood of slippage.  

Lending & Borrowing  

  • Borrower Default: If AusBlock or its affiliates lend your Digital Assets to third parties and those borrowers default, you may experience delays or be unable to withdraw the assets.  
  • Lock-Up Periods: Certain lending or yield products may require locking up your assets, preventing you from selling or transferring them during that time — potentially detrimental in volatile market conditions.  

Depegging Risk for “Stablecoins” 

  • Intended 1:1 Parity: Some stablecoins are designed to maintain parity (e.g. 1:1) with a fiat currency or commodity. Various market, regulatory, or operational factors can break that peg, a phenomenon known as “depegging.”  
  • Redemption Issues: If a stablecoin issuer faces liquidity or operational challenges, you may be unable to redeem or transact your stablecoins at or near their intended peg value.  
  • Issuer Risk: Stablecoins typically rely on a central issuing entity. Regulatory sanctions, solvency problems, or internal malfeasance affecting that entity can result in widespread loss of confidence and depreciation of the stablecoin.  
  • Collateral & Contagion Effects: Depegging may reduce the value of stablecoins used as collateral, triggering margin calls or forced liquidations. It could also create contagion risk, impacting related markets or other stablecoins.  

Final Notes 

  • No Guarantees: AusBlock does not guarantee the performance or value of any Digital Asset or product. Past performance is no indication of future results.  
  • Your Responsibility: By participating in the AusBlock platform, you confirm that you have thoroughly read, understood, and accepted all the risks described above (and any additional product-specific risks outlined in relevant terms and disclosures).  
  • Independent Advice Recommended: If you have any doubts concerning your investment decisions, or if you do not fully understand the risks involved, you should consider seeking independent advice from qualified professionals before proceeding.  

Disclaimer  

This General Risk Warning is provided for informational purposes and does not replace or supersede any legal agreements, additional risk disclosures, or the AusBlock Terms of Use that govern your relationship with AusBlock. You should read this Risk Warning in conjunction with the Terms of Use and any specific product disclosures. The presence or omission of any particular risk in this document does not constitute a complete account of all possible risks associated with Digital Asset transactions.  

 

Last Update: 04 March 2025