Cryptocurrency Risks

1. Key Risks of Cryptocurrency Investments

1.1 Volatility and Capital Loss Risk

Cryptocurrencies are highly volatile financial instruments. Their value can fluctuate dramatically over short periods, potentially resulting in significant financial losses. The cryptocurrency market operates 24/7 and can be influenced by various factors including regulatory announcements, technological developments, market sentiment, and macroeconomic trends.

Important Notice: You could lose all the money you invest in cryptocurrencies. Customers should be prepared for the possibility of losing the full value of their cryptocurrency investments.

1.2 Limited Regulatory Protection

The broader cryptocurrency market remains largely unregulated compared to traditional financial markets. This limited regulatory oversight means:

Cryptocurrency investments are not recognized as "specified investments" under many regulatory frameworks

They are typically not covered by financial compensation schemes

Poor investment performance or losses related to cryptocurrencies are typically not covered by standard dispute resolution mechanisms

1.3 Liquidity Risks

Liquidity in cryptocurrency markets can vary significantly, which may affect your ability to buy or sell assets when desired:

There is no guarantee that you will be able to sell your cryptocurrencies when desired

Market conditions, including supply and demand, directly impact liquidity at any given time

Operational delays, technology outages, or cyber-attacks may delay transactions

Some staking activities may involve lock-up periods during which assets cannot be sold

1.4 Operational Risks

The technological nature of cryptocurrencies introduces specific operational risks:

Technology outages, cyber-attacks, or operational failings may delay or prevent transactions

Security breaches could potentially result in loss of assets

Software updates or "forks" in blockchain networks may impact asset values or accessibility

Smart contract vulnerabilities could lead to unexpected losses

1.5 Complexity of Cryptocurrencies

Cryptocurrency investments can be complex and difficult to fully understand:

Different cryptocurrencies have varying technological foundations, use cases, and risk profiles

The underlying technology and economic models can be challenging to evaluate

Novel financial products built on cryptocurrencies (such as DeFi protocols) may introduce additional layers of complexity and risk

1.6 Investment Concentration Risk

Concentrating investments in cryptocurrencies significantly increases risk exposure:

We recommend diversifying investments across different asset classes

It is advisable not to allocate more than 10% of your investment portfolio to high-risk investments like cryptocurrencies

Different cryptocurrencies carry different risk profiles; research each asset thoroughly before investing

2. Risk Variance Among Cryptocurrencies

Not all cryptocurrencies carry the same level of risk. Factors affecting risk include:

Market capitalization and trading volume

Technology maturity and security record

Development team experience and reputation

Regulatory status in different jurisdictions

Use case viability and adoption metrics

We recommend reviewing cryptocurrency-specific performance statistics available on the platform and conducting additional research to understand the unique risks associated with each digital asset.

3. Education and Resources

We encourage all customers to educate themselves about cryptocurrencies and their associated risks before investing. For more information, please consult resources provided by relevant financial regulatory authorities in your jurisdiction.

4. Disclaimer

Cryptocurrency investments are high-risk and may not be suitable for all investors. This summary provides a general overview of risks and does not constitute financial or investment advice. Customers are responsible for making informed decisions and should consult professional advisers where necessary.

Past performance is not indicative of future results. The value of cryptocurrencies can go down as well as up, and you may not recover the amount of your original investment.

This document is provided for informational purposes only and does not constitute financial, investment, tax, or legal advice. Chameleon Money markets services provided by a regulated platform operator. Users accessing services through Chameleon Money will be subject to the terms, conditions, and policies of the regulated platform operator.

Last Updated

Last updated: 30 July 2025

This document is reviewed regularly to ensure accuracy and compliance with current regulations and platform policies. Users should check back periodically for updates.