Risk Disclosure Statement

This Risk Disclosure Statement ("Statement") is provided by 3-102-954669 S.R.L., a sociedad de responsabilidad limitada organized under the laws of the Republic of Costa Rica (operating as "XEX"), and its affiliates (collectively, "XEX," "we," "us," or "our") to all users ("you," "your," or "User") of the XEX platform, including but not limited to the website located at xex.to, associated mobile applications, APIs, and any other services offered by XEX (collectively, the "Platform"). This Statement supplements and forms an integral part of the XEX Terms of Service.

Trading, holding, staking, and otherwise transacting in digital assets involves substantial risk of loss and is not suitable for every person. The volatility and unpredictability of the price of digital assets relative to fiat currencies or other assets may result in significant loss over a short period of time. You should carefully consider whether trading or holding digital assets is appropriate for you in light of your financial condition, risk tolerance, and investment objectives. XEX strongly recommends that you seek independent financial, legal, and tax advice before making any trading or investment decisions. You acknowledge and agree that you shall access and use the Platform at your own risk.

The risks described below are not exhaustive. Additional risks not currently known to XEX, or risks that XEX currently considers immaterial, may also adversely affect your holdings or trading activity. You should not engage in transactions on the Platform unless you fully understand the nature of the transactions you are entering into and the extent of your exposure to loss. If you do not fully understand these risks, you should seek independent professional advice before using the Platform.

1. General Digital Asset Risks

Digital assets (also referred to as "cryptocurrencies," "virtual currencies," "crypto assets," or "tokens") are a nascent and rapidly evolving class of assets that rely on cryptographic protocols, distributed ledger technology, and decentralized consensus mechanisms. The following general risks apply to all digital asset transactions conducted on the Platform.

1.1 Volatility and Loss of Value

The value of digital assets can be extremely volatile and may fluctuate significantly within very short periods of time. Price swings of 10%, 20%, or even greater within a single day are not uncommon. There is no guarantee that any digital asset will retain any value whatsoever. You may lose the entire value of your holdings, and such losses may occur rapidly and without warning. Historical price performance is not indicative of future price performance.

1.2 No Intrinsic Value

Unlike traditional financial instruments, many digital assets have no underlying asset, revenue stream, or tangible collateral backing their value. The price of a digital asset is determined entirely by market supply and demand, speculative sentiment, and network adoption. There is no guarantee that any particular digital asset will achieve or maintain market acceptance. A digital asset may become entirely worthless.

1.3 Regulatory Uncertainty

The regulatory landscape for digital assets varies significantly across jurisdictions and is subject to rapid and unpredictable change. Governments and regulatory bodies may enact laws, regulations, or policies that restrict, prohibit, or otherwise adversely affect the ownership, transfer, trading, use, or valuation of digital assets. Such regulatory actions may occur without advance notice and may have retroactive effect. XEX cannot predict how existing or future regulations will impact the Platform or the digital assets listed thereon and assumes no liability for any losses arising from regulatory changes.

1.4 Protocol Changes and Hard Forks

Digital asset protocols are typically governed by open-source communities or foundations that may implement changes to the protocol rules, consensus mechanisms, or economic models at any time. Such changes may include hard forks (which create a divergent blockchain), soft forks, or other material protocol modifications. Forks may result in the creation of new tokens that XEX may or may not support, at its sole discretion. XEX shall not be liable for any losses incurred as a result of protocol changes, forks, or airdrops, regardless of whether XEX elects to support the forked or modified asset.

1.5 Nascent Technology

Blockchain and distributed ledger technologies are still in relatively early stages of development. These technologies may contain undiscovered flaws, vulnerabilities, or limitations that could adversely affect the functionality, security, or value of digital assets. There can be no assurance that the underlying technology will continue to operate as intended, that cryptographic assumptions will remain secure against future computational advances (including but not limited to quantum computing), or that the ecosystem of miners, validators, and node operators will remain economically viable.

2. Market Volatility and Price Risk

The markets for digital assets are open twenty-four hours a day, seven days a week, and operate without the circuit breakers, trading halts, or other protective mechanisms commonly found in traditional securities and commodities markets. This continuous operation, combined with the global and fragmented nature of digital asset markets, introduces unique price risks.

2.1 Price Decline to Zero

The market price of any digital asset may decline to zero. This decline may occur gradually or precipitously, and you may be unable to liquidate your position before the price reaches zero. XEX makes no representation or warranty regarding the future price or value of any digital asset listed on the Platform.

2.2 Flash Crashes and Rapid Price Movements

Digital asset markets are susceptible to "flash crashes," which are sudden, severe, and rapid price declines that may be triggered by large sell orders, algorithmic trading activity, technical glitches, liquidation cascades, or other factors. During flash crashes, prices may temporarily deviate substantially from fair market value, and orders may be executed at prices significantly different from prevailing market conditions. XEX does not guarantee order execution at any particular price and shall not be liable for losses arising from flash crashes or rapid price movements.

2.3 Market Manipulation

Digital asset markets are susceptible to various forms of market manipulation, including but not limited to wash trading, spoofing, layering, pump-and-dump schemes, and front-running. While XEX employs surveillance systems designed to detect and deter manipulative activity, no system is infallible, and XEX cannot guarantee that all instances of manipulation will be detected or prevented. You may suffer losses as a result of manipulative activity by other market participants.

2.4 Thin Order Books and Wide Spreads

Certain trading pairs, particularly those involving less popular or newly listed digital assets, may have thin order books characterized by low trading volume and wide bid-ask spreads. In such conditions, even relatively small orders may cause significant price movements (commonly referred to as "slippage"), and you may be unable to execute trades at desired prices. Market orders in thinly traded markets may result in execution at prices substantially worse than expected.

2.5 Absence of Circuit Breakers

Unlike traditional securities exchanges, the XEX Platform does not employ circuit breakers or market-wide trading halts that would pause trading during periods of extreme volatility. As a result, prices may continue to decline (or rise) without interruption, and there is no mechanism to provide a cooling-off period during periods of panic selling or irrational exuberance. You bear the full risk of continuous, uninterrupted price movements.

3. Liquidity Risk

Liquidity refers to the ability to buy or sell an asset quickly at a price close to its fair market value. Liquidity in digital asset markets can vary dramatically and may change without notice.

3.1 Inability to Exit Positions

There may be circumstances in which you are unable to close or reduce your positions in one or more digital assets. Such circumstances may arise due to a lack of counterparties willing to trade at your desired price, extreme market volatility, network congestion on the underlying blockchain, platform maintenance or outages, or regulatory actions. XEX does not guarantee that you will be able to exit any position at any time or at any particular price.

3.2 Slippage

Slippage occurs when the price at which your order is executed differs from the price at which you submitted the order. Slippage is particularly prevalent during periods of high volatility, low liquidity, or when placing large orders relative to the available order book depth. You acknowledge that slippage is an inherent risk of trading on any exchange and that XEX bears no responsibility for losses resulting from slippage.

3.3 Delisted and Suspended Assets

XEX reserves the right, in its sole and absolute discretion, to delist, suspend, or restrict trading in any digital asset at any time and for any reason, including but not limited to regulatory concerns, security vulnerabilities, low trading volumes, or project abandonment. If an asset is delisted, you may have a limited window to withdraw the asset from the Platform, after which the asset may become permanently inaccessible. XEX shall not be liable for any losses arising from the delisting or suspension of any digital asset.

3.4 Illiquid Market Conditions

During periods of extreme market stress, liquidity across the broader digital asset ecosystem may dry up simultaneously, creating conditions in which it becomes difficult or impossible to convert digital assets to fiat currency or other digital assets at reasonable prices. Such conditions may persist for extended periods, and XEX makes no guarantees regarding the availability of liquidity on the Platform at any given time.

4. Technology and Cybersecurity Risks

The Platform and the underlying blockchain networks on which digital assets operate are complex technological systems that are subject to a wide range of technology and cybersecurity risks.

4.1 Hacking and Unauthorized Access

Despite employing industry-leading security measures, no system is impervious to cyberattacks. The Platform, your account, or the underlying blockchain networks may be targeted by hackers, malicious actors, or state-sponsored entities employing sophisticated attack vectors, including but not limited to phishing, social engineering, distributed denial-of-service (DDoS) attacks, man-in-the-middle attacks, zero-day exploits, and supply chain attacks. A successful cyberattack may result in the theft or loss of digital assets, and XEX cannot guarantee the recovery of stolen assets.

4.2 Smart Contract Vulnerabilities

Many digital assets and decentralized protocols rely on smart contracts -- self-executing code deployed on a blockchain. Smart contracts may contain bugs, vulnerabilities, or design flaws that could be exploited by malicious actors, resulting in the loss or theft of digital assets. Once deployed, smart contracts are generally immutable and cannot be easily patched or updated. XEX does not audit or guarantee the security of any smart contract associated with any digital asset listed on the Platform.

4.3 Blockchain Congestion and Network Failures

Blockchain networks have finite transaction throughput capacity. During periods of high demand, network congestion may result in delayed transaction confirmations, increased transaction fees, or failed transactions. Certain blockchains may also experience temporary or prolonged outages, consensus failures, or chain reorganizations. XEX shall not be liable for delays, losses, or failed transactions caused by blockchain network issues outside of our control.

4.4 Wallet Vulnerabilities

Digital asset wallets, whether provided by XEX or third parties, may contain software vulnerabilities that could expose private keys, seed phrases, or other sensitive cryptographic material. Hardware wallets may also contain firmware vulnerabilities or be subject to physical tampering. You are solely responsible for the security of any private keys or seed phrases under your control.

4.5 Loss of Private Keys

Access to digital assets is controlled by private cryptographic keys. If you lose access to your private keys or seed phrases for any wallet under your control, you will permanently lose access to the associated digital assets with no possibility of recovery. XEX does not have access to and cannot recover private keys associated with external wallets. For assets held on the Platform in custodial accounts, XEX manages private keys on your behalf; however, this custodial arrangement introduces its own risks as described in the Counterparty Risk and Wallet and Custody Risks sections of this Statement.

5. Regulatory and Legal Risks

The legal and regulatory environment for digital assets is evolving rapidly and varies by jurisdiction. Regulatory developments may materially and adversely affect the value of your digital assets, your ability to use the Platform, or the continued operation of the Platform itself.

5.1 Changing Regulations

Governments and regulatory authorities around the world are continuously developing and amending laws, regulations, and guidelines applicable to digital assets, blockchain technology, and digital asset service providers. Such changes may impose new licensing requirements, restrict certain types of transactions, mandate enhanced reporting or disclosure obligations, or otherwise limit the functionality of the Platform. XEX may be required to modify, suspend, or discontinue certain services or restrict access to the Platform in certain jurisdictions as a result of regulatory changes, and XEX shall have no liability for any losses you incur as a consequence.

5.2 Potential Prohibitions and Bans

Certain jurisdictions have enacted, or may in the future enact, outright bans on the ownership, trading, or use of digital assets or specific categories thereof. If your jurisdiction of residence or citizenship enacts such a ban, you may be prohibited from accessing the Platform, and you may be required to liquidate your digital asset holdings under unfavorable market conditions. XEX shall not be responsible for any losses arising from governmental bans or restrictions on digital assets.

5.3 Tax Law Changes

The tax treatment of digital assets is uncertain and varies significantly across jurisdictions. Tax laws applicable to digital assets may be amended, reinterpreted, or applied retroactively in ways that adversely affect the after-tax return on your digital asset holdings or transactions. You are solely responsible for determining and complying with all applicable tax obligations arising from your use of the Platform.

5.4 Securities Classification

Certain digital assets may be classified as securities, investment contracts, financial instruments, or other regulated products by one or more regulatory authorities. Such classification may subject the digital asset and transactions therein to additional regulatory requirements, including registration, disclosure, and trading restrictions. XEX may be required to delist or restrict trading in any digital asset that is determined to be a security or other regulated product in any jurisdiction, and you may suffer losses as a result. The listing of any digital asset on the Platform should not be construed as a determination by XEX that such asset is not a security or otherwise regulated under applicable law.

6. Margin and Leverage Risks

Margin trading and leveraged products amplify both potential gains and potential losses. Trading with leverage is extremely risky and is not appropriate for most users. You should only engage in margin or leveraged trading if you fully understand the mechanics and risks involved and can afford to lose more than your initial deposit.

6.1 Losses Exceeding Initial Deposit

When you trade on margin or with leverage, your potential loss is not limited to the amount of your initial margin deposit. You may lose significantly more than your initial investment, and in some circumstances, you may owe additional funds to XEX to cover negative account balances. XEX reserves the right to pursue recovery of any negative balance from you, including through legal proceedings.

6.2 Automatic Liquidation

XEX employs automatic liquidation mechanisms that will close your positions without prior notice when your margin balance falls below the required maintenance margin level. Liquidation may occur at prices substantially worse than your entry price or the prevailing market price due to slippage, rapid market movements, or illiquid market conditions. You acknowledge that the liquidation engine operates automatically and that XEX shall not be liable for any losses arising from automatic liquidation, including losses caused by the timing, price, or manner of liquidation.

6.3 Margin Calls

XEX may issue margin calls requiring you to deposit additional funds to maintain your open positions. Margin calls may be issued at any time and must be satisfied promptly. Failure to meet a margin call may result in the automatic liquidation of some or all of your positions. XEX is under no obligation to issue margin calls before liquidating your positions and may proceed directly to liquidation at its sole discretion.

6.4 Funding Rates

Perpetual futures contracts on the Platform are subject to periodic funding rate payments exchanged between long and short position holders. Funding rates are variable and may change rapidly based on market conditions. If you hold a position that requires you to pay funding, these costs will reduce your margin balance and may contribute to or accelerate liquidation. Funding rates can become extremely elevated during periods of market stress.

6.5 Liquidation Cascades

In rapidly moving markets, the automatic liquidation of large positions may trigger further price movements, which in turn trigger additional liquidations, creating a self-reinforcing cascade effect. Liquidation cascades can amplify market volatility and lead to prices that significantly deviate from fair value. Your positions may be liquidated during such cascades at prices substantially below (for long positions) or above (for short positions) what would otherwise be expected under normal market conditions.

7. Futures and Derivatives Risks

Futures contracts, perpetual contracts, and other derivative instruments available on the Platform carry risks that are distinct from and in addition to those associated with spot trading.

7.1 Mark Price vs. Last Traded Price

XEX uses a mark price mechanism to calculate unrealized profit-and-loss and to determine liquidation triggers. The mark price may differ from the last traded price on the Platform and is typically derived from an index of prices across multiple exchanges. In certain circumstances, the mark price may diverge significantly from the last traded price, which may result in unexpected liquidations or profit-and-loss calculations that differ from your expectations. XEX shall not be liable for losses arising from divergence between the mark price and the last traded price.

7.2 Insurance Fund

XEX maintains an insurance fund designed to cover losses arising from accounts that are liquidated below the bankruptcy price. However, the insurance fund has a finite balance and may be depleted during periods of extreme market volatility or in the event of large-scale liquidation events. If the insurance fund is insufficient to cover all losses, XEX may resort to the socialized loss mechanism described below. The size and adequacy of the insurance fund are determined by XEX in its sole discretion, and XEX makes no guarantees regarding the sufficiency of the insurance fund at any time.

7.3 Socialized Losses

In the event that the insurance fund is depleted and cannot cover losses from liquidated positions, XEX may implement a socialized loss mechanism (also known as auto-deleveraging or "ADL") whereby profitable traders' positions may be automatically reduced or closed to cover the shortfall. If your position is subject to auto-deleveraging, your open position may be closed without your consent at the bankruptcy price of the counterparty, which may be significantly different from the prevailing market price. You acknowledge and accept the risk that your profitable positions may be subject to auto-deleveraging.

7.4 Contract Expiry and Settlement

Certain futures contracts on the Platform have fixed expiration dates. Upon expiry, open positions will be settled at the settlement price determined by XEX, which may differ from the prevailing market price. You are solely responsible for managing the expiry of your positions, and failure to close positions before expiry may result in settlement at unfavorable prices. XEX shall not be liable for losses arising from the expiry or settlement of futures contracts.

7.5 Delivery Risk

For physically settled futures contracts, delivery of the underlying asset is required at contract expiry. Failure to deliver or take delivery of the underlying asset may result in penalties, forced liquidation, or other adverse consequences. XEX reserves the right to cash-settle any physically settled contract in its sole discretion if physical delivery is impracticable or poses unacceptable risk.

8. Options Trading Risks

Options are complex derivative instruments that require a thorough understanding of options pricing theory, the Greeks, and various strategy payoff profiles. Options trading is speculative and carries a high degree of risk.

8.1 Time Decay (Theta)

The value of an options contract erodes over time as the contract approaches its expiration date, a phenomenon known as time decay or theta. If the underlying asset does not move favorably in price by a sufficient amount to offset time decay, the option may expire worthless, resulting in a total loss of the premium paid. Time decay accelerates as the expiration date approaches, and the rate of acceleration is nonlinear.

8.2 Total Loss of Premium

As a buyer of options, you risk losing the entire premium paid for the option if the option expires out of the money. Unlike holding the underlying asset, where residual value may remain, an option that expires worthless has zero recovery value. You should be prepared to lose one hundred percent of the capital allocated to purchasing options.

8.3 Assignment and Exercise Risk

If you write (sell) options, you may be assigned an obligation to buy or sell the underlying asset at the strike price, which may be significantly unfavorable relative to the prevailing market price. Assignment may occur at any time for American-style options and at expiry for European-style options, and you must maintain sufficient margin to fulfill the assignment obligation. Failure to maintain adequate margin may result in automatic liquidation of your positions.

8.4 Volatility Risk (Vega)

The price of an option is significantly influenced by implied volatility, which reflects the market's expectation of future price movements in the underlying asset. Changes in implied volatility (vega risk) can cause the price of an option to increase or decrease independently of movements in the underlying asset price. A decline in implied volatility can reduce the value of your option positions even if the underlying asset price moves in your favor, commonly referred to as a "volatility crush."

8.5 Complex Strategies

Options strategies involving multiple legs (such as spreads, straddles, strangles, butterflies, condors, and other combinations) carry their own unique risk profiles, margin requirements, and potential for loss. The interaction between multiple options positions can create complex payoff structures that may be difficult to evaluate, and the risks associated with multi-leg strategies may not be immediately apparent. XEX does not verify the suitability or risk appropriateness of any strategy employed by a User and shall not be liable for losses arising from the use of complex options strategies.

9. Staking Risks

Staking involves locking digital assets to participate in the consensus and validation processes of proof-of-stake blockchain networks. Staking carries risks that are distinct from simply holding digital assets.

9.1 Slashing

Proof-of-stake networks implement slashing penalties designed to punish validators for malicious behavior, double signing, extended downtime, or other protocol violations. If the validator to which your staked assets are delegated is slashed, you may lose a significant portion of your staked assets. Slashing penalties are imposed automatically by the blockchain protocol and are irreversible. XEX shall not be liable for any losses arising from slashing events, whether caused by XEX-operated validators or third-party validators.

9.2 Validator Risk

When you stake assets through the Platform, XEX may delegate your assets to one or more validators, which may include validators operated by XEX or by third parties. Validator performance, reliability, and security vary, and there is no guarantee that any particular validator will perform optimally or remain solvent. A validator's failure, compromise, or negligence may result in reduced rewards or loss of staked assets.

9.3 Lock-Up Periods and Unbonding

Many proof-of-stake protocols impose lock-up or unbonding periods during which staked assets cannot be withdrawn or transferred. These periods may range from days to weeks or longer, depending on the protocol. During the lock-up or unbonding period, you will be unable to sell, transfer, or otherwise access your staked assets, regardless of market conditions. If the value of the staked asset declines significantly during a lock-up period, you will be unable to mitigate your losses.

9.4 Protocol Changes Affecting Staking

The terms and conditions of staking, including reward rates, slashing conditions, lock-up periods, and minimum staking amounts, are determined by the underlying blockchain protocol and may change at any time without notice. Such changes may adversely affect the expected returns on your staked assets or increase the risks associated with staking.

9.5 Reward Variability

Staking rewards are not fixed and may vary based on network conditions, including the total amount staked, the number of active validators, transaction volume, and protocol-specific parameters. Actual rewards may be significantly lower than estimated or advertised rates, and rewards may be delayed or withheld under certain network conditions. Any staking reward estimates provided by XEX are indicative only and do not constitute a guarantee of future returns.

10. P2P Trading Risks

Peer-to-peer ("P2P") trading allows users to buy and sell digital assets directly with one another. While XEX provides a P2P platform and escrow mechanism to facilitate such transactions, P2P trading carries significant counterparty and payment risks.

10.1 Counterparty Fraud

In P2P transactions, you are transacting directly with another individual who may engage in fraudulent conduct, including but not limited to providing false proof of payment, using stolen payment methods, identity fraud, or refusing to complete a transaction. While XEX provides escrow services and dispute resolution mechanisms, these measures cannot eliminate all risks of fraud. XEX acts solely as a facilitator and not as a guarantor of any P2P transaction.

10.2 Payment Reversal and Chargebacks

Certain payment methods used in P2P transactions (including but not limited to bank transfers, credit card payments, and third-party payment processors) are subject to reversal, chargeback, or recall by the payer, the payer's bank, or the payment processor. If you release digital assets from escrow upon receipt of payment, and the payment is subsequently reversed, you may lose both the digital assets and the payment. XEX shall not be liable for losses arising from payment reversals or chargebacks in P2P transactions.

10.3 Escrow Limitations

XEX's escrow service holds the seller's digital assets during a P2P transaction until both parties confirm that the payment has been completed. However, the escrow mechanism has limitations. It does not verify the authenticity of fiat payments, cannot reverse blockchain transactions, and relies on the honesty and cooperation of both parties. In disputed transactions, XEX will make a determination based on available evidence at its sole discretion, and such determination shall be final and binding. XEX is under no obligation to compensate either party for losses arising from P2P disputes.

11. Copy Trading Risks

Copy trading allows users ("Followers") to automatically replicate the trades of other users ("Leaders"). Copy trading is not a managed account service and does not constitute investment advice or portfolio management.

11.1 Past Performance Not Indicative of Future Results

The historical performance of any Leader displayed on the Platform is not a guarantee or reliable indicator of future performance. Market conditions change, and strategies that were profitable in the past may result in significant losses in the future. You should not rely on a Leader's historical track record when deciding whether to copy their trades.

11.2 Execution Lag and Price Differences

There is an inherent time delay between when a Leader executes a trade and when the corresponding trade is executed in the Follower's account. This lag may result in different execution prices, increased slippage, or missed trades entirely, particularly during periods of high volatility or low liquidity. Your actual returns may differ materially from the Leader's returns due to execution timing differences.

11.3 Leader Strategy Changes

Leaders may change their trading strategy, risk tolerance, asset selection, leverage usage, or trading frequency at any time without notice to Followers. A Leader who previously employed a conservative strategy may shift to a high-risk, high-leverage approach, exposing Followers to significantly greater risk than originally anticipated. XEX does not monitor, vet, or endorse the trading strategies of any Leader and makes no representation regarding the skill, experience, or suitability of any Leader.

11.4 Follower Bears All Losses

As a Follower, you bear full responsibility for all losses incurred in your account as a result of copy trading. Neither the Leader nor XEX shall be liable for any losses you incur while copying a Leader's trades. The decision to copy a particular Leader is entirely your own, and you should independently assess whether copy trading is appropriate for your financial situation and risk tolerance.

12. Automated Trading Bot Risks

The Platform may offer automated trading bots or allow users to connect third-party trading bots via API. Automated trading systems carry unique risks that are distinct from manual trading.

12.1 Algorithm Failures

Automated trading algorithms may contain bugs, logical errors, or flaws that cause the bot to execute unintended trades, place orders at incorrect prices or quantities, or fail to execute trades when required. Such failures may result in significant financial losses. XEX does not review, audit, or endorse any trading algorithm and shall not be liable for losses arising from algorithm failures.

12.2 Changing Market Conditions

Trading algorithms are typically designed and optimized based on historical market data and certain assumed market conditions. When market conditions change in ways that the algorithm was not designed to handle -- such as shifts in volatility regime, liquidity structure, or correlation patterns -- the algorithm may perform poorly or generate significant losses. Past backtested or simulated performance of a trading bot does not guarantee future results.

12.3 Unexpected Behavior

Automated bots may interact with market conditions in unexpected ways, including generating excessive numbers of orders, consuming margin rapidly, entering into large positions, or interacting adversely with other automated systems. Such behavior may result in rapid depletion of your account balance or trigger liquidation of your positions.

12.4 API Failures and Connectivity

Automated trading bots typically rely on API connectivity to the Platform. API connections may experience latency, interruptions, rate limiting, or failures. If the API connection is disrupted, your bot may be unable to manage existing positions, place new orders, or cancel pending orders, potentially resulting in unmonitored open positions during volatile market conditions. XEX shall not be liable for losses arising from API interruptions, latency, or connectivity issues.

12.5 Over-Optimization and Curve Fitting

Trading strategies that are excessively optimized ("curve fit") to historical data may appear to perform well in backtesting but perform poorly in live market conditions. You acknowledge that backtested results are hypothetical and do not reflect actual trading performance, and that over-optimized strategies are particularly susceptible to failure when market conditions diverge from historical patterns.

13. Counterparty Risk

By using the Platform, you are exposed to various counterparty risks, including but not limited to the following.

13.1 Exchange Risk

When you hold digital assets on the Platform, you are relying on XEX to safely custody those assets and to honor withdrawal requests. Like any business entity, XEX is subject to financial, operational, and legal risks that could impair its ability to meet its obligations to users. While XEX implements robust security and financial controls, there can be no absolute guarantee that XEX will remain solvent and operational at all times.

13.2 Custodian Risk

XEX may utilize third-party custodians to hold some or all of the digital assets deposited by users. Third-party custodians are subject to their own operational, financial, regulatory, and security risks. The insolvency, failure, negligence, or misconduct of a custodian may result in the loss or unavailability of your digital assets. XEX exercises due diligence in selecting custodial partners but does not guarantee the performance, solvency, or security of any third-party custodian.

13.3 Third-Party Provider Failure

The Platform relies on a range of third-party service providers, including but not limited to cloud infrastructure providers, payment processors, data feed providers, blockchain node operators, and identity verification services. The failure, outage, or breach of any third-party provider may adversely affect the functionality, availability, or security of the Platform. XEX shall not be liable for losses arising from the acts or omissions of third-party service providers.

14. Operational Risk

Operational risks include risks arising from inadequate or failed internal processes, personnel, systems, or external events.

14.1 System Outages and Downtime

The Platform may experience scheduled or unscheduled downtime, including for maintenance, upgrades, security patches, or as a result of unexpected system failures. During periods of downtime, you may be unable to access your account, place or cancel orders, deposit or withdraw assets, or manage your positions. In particular, system outages that coincide with periods of extreme market volatility may result in significant losses, including the liquidation of leveraged positions. XEX shall use commercially reasonable efforts to minimize downtime but does not guarantee uninterrupted access to the Platform and shall not be liable for any losses arising from system outages.

14.2 Latency

The speed at which orders are transmitted to and processed by the Platform depends on numerous factors, including network conditions, server load, geographic distance, and the performance of your own hardware and internet connection. Latency in order transmission or execution may result in orders being filled at prices different from those displayed at the time of submission. XEX does not guarantee any particular order execution speed and shall not be liable for losses arising from latency.

14.3 Incorrect Price Feeds

The Platform displays price data sourced from internal order books and external data providers. In rare circumstances, price feeds may be incorrect, delayed, or manipulated, resulting in the display of inaccurate price information. Orders executed based on incorrect price data may be subject to cancellation or adjustment by XEX in its sole discretion. XEX reserves the right to void or adjust any trades that were executed at prices that XEX determines, in its sole and absolute discretion, to have been materially affected by erroneous price data.

14.4 Oracle Failures

Certain Platform features, including derivatives pricing, liquidation triggers, and index calculations, rely on price oracles that aggregate data from multiple sources. Oracles may experience failures, manipulation, or data feed delays that result in incorrect price calculations. Such failures may trigger erroneous liquidations, incorrect settlement prices, or other adverse outcomes. XEX shall not be liable for losses arising from oracle failures or manipulation, except to the extent directly caused by the willful misconduct of XEX.

15. Real World Asset (RWA) Tokenization Risks

Tokenized real-world assets ("RWA Tokens") represent digital tokens issued on a blockchain that are intended to reference, track, or provide exposure to underlying real-world assets, including but not limited to government bonds, corporate bonds, money market instruments, real estate, commodities, equities, and other financial instruments. RWA Tokens involve complex risks arising from the intersection of traditional finance, securities law, blockchain technology, and novel legal structures. You should carefully review the specific offering documentation, smart contract code, and legal disclosures associated with each RWA Token before acquiring or trading such tokens.

15.1 Underlying Asset Valuation and Appraisal Risk

The value of an RWA Token is intended to be linked to the value of an underlying real-world asset. However, the accurate and timely valuation of underlying assets is inherently challenging and subject to significant uncertainty. Valuations may be based on appraisals, models, or third-party estimates that may prove to be inaccurate, outdated, or biased. For illiquid underlying assets such as real estate or private credit, valuations are inherently subjective and may not reflect the price at which the underlying asset could actually be sold on the open market. Changes in valuation methodology, market conditions, or the condition of the underlying asset may cause the value of the RWA Token to diverge significantly from the stated or expected net asset value. XEX does not independently verify the valuation of any underlying asset and makes no representation regarding the accuracy of any valuation provided by issuers, custodians, or appraisers.

15.2 Custodian and Issuer Counterparty Risk

RWA Tokens require one or more intermediaries -- including issuers, custodians, trustees, transfer agents, and servicers -- to hold, manage, and administer the underlying real-world assets. These intermediaries are subject to their own financial, operational, regulatory, and legal risks. The insolvency, fraud, negligence, or misconduct of any such intermediary may result in the loss, impairment, or unavailability of the underlying assets, which would directly impact the value and redeemability of the RWA Token. There is no guarantee that the issuer or custodian will remain solvent, operational, or compliant with applicable regulations throughout the life of the token. XEX does not guarantee the creditworthiness, solvency, or performance of any RWA Token issuer, custodian, or other intermediary.

15.3 Smart Contract and Oracle Risk

RWA Tokens are implemented as smart contracts on a blockchain and may rely on oracle systems to relay off-chain data (such as asset valuations, interest rate calculations, and payment status) to the on-chain token contract. Smart contracts may contain vulnerabilities, bugs, or design flaws that could be exploited, resulting in loss of funds or incorrect token behavior. Oracles may be subject to manipulation, delays, or failures, causing the token to reflect inaccurate data regarding the underlying asset. The immutable nature of blockchain transactions means that errors in smart contract execution or oracle data are generally irreversible.

15.4 Regulatory Classification Risk

RWA Tokens may be classified as securities, investment contracts, collective investment schemes, or other regulated financial instruments by regulatory authorities in one or more jurisdictions. Such classification may subject the token, its issuer, and persons who trade or hold the token to extensive regulatory requirements, including registration, disclosure, investor suitability, holding period restrictions, and trading limitations. Regulatory classification may occur after you have acquired the token and may have retroactive effect. If an RWA Token is determined to be a security or other regulated instrument in your jurisdiction, you may be restricted from transferring, selling, or redeeming the token, and you may face regulatory penalties. XEX makes no determination regarding the regulatory classification of any RWA Token and shall not be liable for consequences arising from regulatory classification changes.

15.5 Liquidity Risk for Tokenized Assets

While one of the stated benefits of tokenization is enhanced liquidity, there is no guarantee that a liquid secondary market will exist for any particular RWA Token. Many RWA Tokens may trade infrequently or not at all on secondary markets, and the number of market participants willing to buy or sell RWA Tokens may be limited due to regulatory restrictions, investor suitability requirements, geographic limitations, or lack of market interest. You may be unable to sell your RWA Tokens at a fair price, or at all, and may be required to hold the tokens until maturity or redemption, which may be years in the future.

15.6 Redemption Risk and Delays

Certain RWA Tokens may offer redemption mechanisms allowing token holders to exchange their tokens for the underlying asset or its cash equivalent. Redemption processes may be subject to significant delays, minimum redemption amounts, redemption fees, queue mechanisms, or gating provisions that limit the amount that can be redeemed within a given period. In stressed market conditions or if the issuer faces financial difficulties, redemptions may be suspended, delayed indefinitely, or honored at a discount to the stated net asset value. There is no guarantee that you will be able to redeem your RWA Tokens on demand or at the stated net asset value.

15.7 NAV Deviation Risk

The secondary market trading price of an RWA Token may deviate significantly from its stated net asset value ("NAV"). Such deviations may occur due to supply and demand imbalances, liquidity constraints, market sentiment, delayed NAV updates, counterparty concerns regarding the issuer or custodian, or general market conditions. An RWA Token may trade at a substantial premium or discount to its NAV, and there is no guarantee that the market price will converge to the NAV over any particular timeframe.

15.8 Cross-Border Legal Enforceability

RWA Tokens typically involve multi-jurisdictional structures, with the underlying asset located in one jurisdiction, the issuer incorporated in another, the custodian operating in a third, and token holders distributed globally. This multi-jurisdictional nature creates significant legal complexity and uncertainty regarding the enforceability of token holder rights across different legal systems. In the event of a dispute, insolvency, or default involving the underlying asset or any intermediary, your ability to enforce your rights as a token holder may be limited by the laws of jurisdictions in which you have no presence or legal standing. Legal proceedings may be costly, protracted, and yield uncertain outcomes.

15.9 Asset Seizure and Bankruptcy Remoteness

RWA Token structures are designed to achieve bankruptcy remoteness, meaning that the underlying assets are intended to be insulated from the insolvency of the issuer or other parties. However, bankruptcy remoteness is a legal concept that depends on the specific legal structure, jurisdiction, and applicable insolvency laws, and there is no guarantee that a court would uphold the intended bankruptcy remote structure in every circumstance. Underlying assets may also be subject to seizure, lien, levy, or forfeiture by government authorities or creditors, which would adversely affect the value and redeemability of the corresponding RWA Tokens. The novel nature of tokenized asset structures means that there is limited legal precedent regarding how such structures would be treated in insolvency proceedings.

15.10 Interest Rate and Yield Fluctuation Risk

For RWA Tokens that provide exposure to fixed-income instruments (such as bonds, treasury bills, or money market instruments), the value of the underlying assets and the yield generated by the tokens are sensitive to changes in prevailing interest rates. Rising interest rates generally cause the market value of existing fixed-income instruments to decline, which may reduce the value of the corresponding RWA Tokens. Additionally, yields distributed to token holders may fluctuate based on the composition and performance of the underlying portfolio, reinvestment rates, fees and expenses charged by the issuer and custodian, and changes in monetary policy. Past yields are not indicative of future yields, and there is no guarantee that any particular yield will be maintained.

16. Fiat Currency Service Risks

XEX offers fiat currency deposit, withdrawal, and conversion services through third-party payment providers. These services carry additional risks beyond those associated with digital asset transactions.

16.1 Third-Party Payment Provider Risk

Fiat currency services on the Platform are facilitated by third-party payment processors and banking partners. These third-party providers are subject to their own operational, financial, and regulatory risks, including insolvency, fraud, regulatory action, or service disruptions. XEX is not a bank and does not hold fiat currency deposits directly. The failure or misconduct of a third-party payment provider may result in delays, loss of funds, or inability to access your fiat currency balances. XEX shall not be liable for the acts or omissions of third-party payment providers.

16.2 Processing Delays

Fiat currency deposits and withdrawals may be subject to processing delays caused by bank processing times, anti-money laundering checks, fraud prevention reviews, weekends and public holidays, or technical issues at the payment provider or receiving bank. Such delays may range from hours to several business days and, in certain circumstances, may be significantly longer. XEX does not guarantee any particular processing time for fiat currency transactions.

16.3 Bank Account Restrictions

Your bank or financial institution may restrict, block, or close accounts that are used for transactions involving digital asset exchanges or other cryptocurrency-related activities. Such actions by your bank are outside of XEX's control, and XEX shall not be liable for any losses or inconvenience arising from banking restrictions imposed on your accounts.

16.4 Currency Conversion Risk

When you deposit or withdraw fiat currency in a currency other than the base currency of your XEX account, currency conversion will be applied at the prevailing exchange rate, which may include a spread or markup. Foreign exchange rates fluctuate continuously, and the rate applied to your transaction may differ from the rate displayed at the time of your request. XEX does not guarantee any particular exchange rate and shall not be liable for losses arising from unfavorable currency conversion rates.

17. Tax Implications

The tax treatment of digital asset transactions is complex, uncertain, and varies significantly across jurisdictions. Tax laws applicable to digital assets are evolving, and governmental authorities may adopt new rules, regulations, or interpretations that materially affect the tax consequences of your transactions.

17.1 Sole Responsibility

You are solely responsible for determining and fulfilling all tax obligations arising from your use of the Platform, including but not limited to income tax, capital gains tax, value-added tax, goods and services tax, withholding tax, and any other taxes or duties applicable in your jurisdiction of residence, citizenship, or tax domicile. XEX does not provide tax advice and does not withhold taxes on behalf of users unless required by applicable law.

17.2 Cross-Border Taxation

If you reside in or are a citizen of multiple jurisdictions, or if you engage in transactions that have cross-border implications, you may be subject to tax obligations in multiple jurisdictions simultaneously. The interaction of tax laws across jurisdictions can create complex scenarios, including but not limited to double taxation, conflicting tax treatment of the same transaction, and reporting obligations in multiple countries. You should consult qualified tax advisors in all relevant jurisdictions.

17.3 Reporting Obligations

You may be required to report your digital asset holdings, transactions, gains, and losses to tax authorities in your jurisdiction. Failure to comply with reporting obligations may result in penalties, fines, interest, or criminal prosecution. XEX may be required by law to report certain information about your account and transactions to tax authorities in one or more jurisdictions, and you consent to such reporting as a condition of using the Platform.

18. Wallet and Custody Risks

The storage and management of digital assets involve unique risks related to key management, transaction irreversibility, and blockchain immutability.

18.1 Key Management

Digital assets are controlled by cryptographic private keys. The loss, theft, or compromise of private keys will result in the permanent loss of the associated digital assets. When you hold assets in a non-custodial wallet, you are solely responsible for the safekeeping of your private keys and seed phrases. XEX cannot recover lost private keys or reverse unauthorized transactions involving assets held in your personal wallets.

18.2 Address Errors Are Irreversible

Blockchain transactions are irreversible once confirmed. If you send digital assets to an incorrect address, an incompatible blockchain network, or a non-existent address, those assets will be permanently lost and cannot be recovered by XEX or anyone else. You are solely responsible for verifying the accuracy of all wallet addresses and network selections before initiating any transfer. XEX shall not be liable for losses arising from address errors, network selection errors, or any other user mistake in initiating transactions.

18.3 Blockchain Immutability

The immutability of blockchain records means that erroneous, fraudulent, or unauthorized transactions, once confirmed on the blockchain, generally cannot be reversed, cancelled, or modified. While certain blockchains have implemented mechanisms for chain rollbacks or transaction reversals in extreme circumstances (such as hard forks following significant security breaches), these mechanisms are extraordinary, discretionary, and cannot be relied upon. You should treat every blockchain transaction as final and irreversible.

19. No Insurance

Digital assets held on the Platform are not insured by any government deposit insurance program or similar protection scheme.

19.1 No FDIC or SIPC Coverage

XEX is not a bank, savings institution, broker-dealer, or credit union. Digital assets held on the Platform are not protected by the Federal Deposit Insurance Corporation (FDIC), the Securities Investor Protection Corporation (SIPC), the Financial Services Compensation Scheme (FSCS), or any similar deposit insurance or investor protection program in any jurisdiction. In the event of loss, theft, or insolvency, you do not have the protections available to depositors of insured banks or customers of registered broker-dealers.

19.2 Not a Bank or Broker-Dealer

XEX does not operate as a bank, credit institution, broker-dealer, investment firm, or fiduciary in any jurisdiction unless specifically licensed and disclosed. The regulatory protections, capital requirements, and client asset segregation rules applicable to banks and broker-dealers may not apply to XEX or the digital assets held on the Platform. You should not assume that your digital assets held on the Platform are subject to the same protections as deposits in a bank account or assets in a brokerage account.

19.3 SAFU Fund Limitations

XEX may maintain a Secure Asset Fund for Users ("SAFU") or similar reserve fund designed to provide a limited safety net in the event of certain security incidents. However, the SAFU fund is maintained at the sole discretion of XEX, is subject to a finite balance, and does not constitute insurance or a guarantee against loss. XEX reserves the right to modify, reduce, or discontinue the SAFU fund at any time without notice. The existence of the SAFU fund does not create any legal obligation on the part of XEX to compensate users for losses, and the SAFU fund may be insufficient to cover losses arising from a major security breach, market event, or operational failure.

20. Past Performance Disclaimer

Past performance of any digital asset, trading strategy, portfolio, index, trader, or financial product is not indicative of future results. Any historical data, performance metrics, backtested results, simulated performance, or track records presented on the Platform are provided for informational purposes only and do not constitute a guarantee, projection, or prediction of future performance. Markets are inherently unpredictable, and future conditions may differ materially from past conditions. You should not make any investment decision based on past performance data.

Returns and yields displayed on the Platform may be calculated using methodologies that differ from standard industry conventions and may not account for all fees, costs, and taxes that would be incurred in actual trading. Hypothetical or simulated performance results have inherent limitations and do not reflect actual trading, liquidity constraints, or the impact of financial risk in actual trading.

21. Not Investment, Financial, or Legal Advice

XEX does not provide investment advice, financial advice, tax advice, legal advice, or any other form of professional advice. Nothing contained on the Platform, including but not limited to market data, research reports, educational materials, blog posts, social media content, newsletters, price alerts, portfolio tracking tools, trading signals, or communications from XEX employees or representatives, should be construed as investment, financial, tax, or legal advice or a recommendation to buy, sell, hold, or otherwise transact in any digital asset.

Any information provided on the Platform is for general informational purposes only and should not be relied upon as the sole basis for making any investment or trading decision. You are solely responsible for evaluating the merits and risks of any transaction and should seek independent professional advice from a qualified financial advisor, tax advisor, or legal counsel before making any investment decision. XEX expressly disclaims any and all liability for investment decisions made by users based on information or tools available on the Platform.

The listing of any digital asset on the Platform does not constitute an endorsement, recommendation, or solicitation by XEX to purchase such asset. XEX does not perform suitability assessments for individual users and makes no determination as to whether any particular digital asset or transaction is appropriate for any particular user.

22. Acknowledgement of Risk

By accessing or using the XEX Platform in any capacity, including but not limited to creating an account, depositing assets, executing trades, staking, participating in copy trading or automated trading, acquiring tokenized real-world assets, or utilizing any other service or feature offered by XEX, you expressly acknowledge, represent, and warrant the following:

1. You have read, understood, and agree to be bound by this Risk Disclosure Statement in its entirety.
2. You understand that trading and holding digital assets involves substantial risk of loss, up to and including the total loss of all capital invested, and that losses may occur rapidly and without warning.
3. You understand that the risks described in this Statement are not exhaustive and that additional risks may exist that are not currently foreseeable or described herein.
4. You have sufficient knowledge, experience, and sophistication to evaluate the merits and risks of any transaction you undertake on the Platform, or you have obtained independent professional advice from qualified advisors.
5. You are financially able to bear the risk of loss of your entire investment and any additional amounts that may be owed in connection with margin or leveraged trading.
6. You have not relied on any statement, representation, or warranty made by XEX, its affiliates, employees, agents, or representatives, other than those expressly set forth in the Terms of Service and this Risk Disclosure Statement.
7. You understand that XEX does not provide investment, financial, tax, or legal advice, and that you are solely responsible for your own investment and trading decisions.
8. You agree that XEX, its affiliates, directors, officers, employees, agents, and representatives shall not be liable for any losses, damages, costs, or expenses (including but not limited to loss of profits, loss of data, direct, indirect, incidental, consequential, special, exemplary, or punitive damages) arising out of or in connection with your use of the Platform, your trading activity, or your reliance on any information or service provided by XEX, regardless of the legal theory of liability and regardless of whether XEX has been advised of the possibility of such losses.
9. You agree to indemnify and hold harmless XEX, its affiliates, directors, officers, employees, agents, and representatives from and against any and all claims, losses, damages, liabilities, costs, and expenses (including reasonable attorneys' fees) arising out of or in connection with your use of the Platform, your violation of this Statement or the Terms of Service, or your violation of any applicable law or regulation.
10. You understand that this Risk Disclosure Statement may be amended or updated by XEX from time to time, and that your continued use of the Platform following any such amendment constitutes your acceptance of the amended Statement.

If you do not agree with or do not understand any provision of this Risk Disclosure Statement, you must immediately cease using the Platform and close your account. Your continued access to or use of the Platform constitutes your unconditional acceptance of all risks described herein.