Crypto Risks Disclosure

Risks of Trading Cryptocurrency with Paxos Trust Company Through the Plynk App

Digital Brokerage Services LLC (“DBS”) offers existing clients through the Plynk Application platform (“Plynk App”) the ability to access trading and custody services (the “Paxos Services”) with respect to cryptocurrency tokens (collectively, “crypto”) in an account in the respective client’s name (the “Paxos Account”) at Paxos Trust Company, N.A. (“Paxos”), regulated by the Office of the Comptroller of the Currency. The crypto in your Paxos Account is carried at Paxos while all other assets, including securities and fiat currency, are carried in your DBS account. You should carefully consider the risks below before making a decision to utilize the Paxos Services.

DBS has elected to work with Paxos as the Crypto Broker/Custodian for its clients. By requesting trading permissions and custody for crypto through the Plynk App, you are opening an account in your name at Paxos (the aforementioned Paxos Account). All trading you do in crypto through the Plynk App will be executed in your Paxos Account (and not in your account at DBS), and Paxos will be your custodian and counterparty for those trades. This means that Paxos holds your cryptocurrencies for you and represents your ownership of them on its internal ledger.

Trading Crypto is Risky

Crypto trading can be extremely risky. Crypto prices are volatile and highly speculative; they can rise or fall dramatically and quickly. If you hold a position in crypto and the value of the asset falls, you will lose money. Crypto trading is generally inappropriate using funds drawn from retirement savings, student loans, mortgages, emergency funds, or that have been set aside for other purposes. You should carefully consider your financial circumstances and your risk tolerance before trading crypto with Paxos and you should not trade crypto unless you have the financial capability to sustain losses if they occur. You should be aware that you may sustain a total loss of the assets in your Paxos Account.

Crypto Trading Requires Knowledge of Crypto Markets

Trading in crypto requires knowledge of crypto markets. In attempting to profit through crypto trading you must compete with traders worldwide. You should have appropriate knowledge and experience before engaging in any crypto trading. Any individual crypto asset may change or otherwise cease to operate as expected due to changes to its underlying technology or changes resulting from a cyber attack. These changes may include, without limitation, a "fork," a "rollback," an "airdrop," or a "bootstrap." Such changes may dilute the value of an existing crypto position and/or distribute the value of an existing crypto position to another crypto. Paxos retains the right to support or not support any of these changes. Any crypto may be cancelled, lost or double spent, or otherwise lose all or most of its value, due to forks, rollbacks, attacks, or failures to operate as intended. The nature of crypto means that any technological difficulties experienced by Paxos may prevent the access of your crypto. Any insurance or surety bonds maintained by Paxos for the benefit of its customers may not be sufficient to cover all losses incurred by those customers.

No Investment Advice, Recommendations or Tax Advice

DBS does not provide investment, tax, or trading advice or recommendations. By making Paxos’ crypto services available to you through the Plynk App, neither DBS nor Paxos makes any assessment, representation, or warranty concerning the appropriateness or suitability of crypto for your financial circumstances. The Paxos Services are "execution only." DBS and Paxos will not advise you on any transaction. Neither DBS nor Paxos will assess whether your transactions are suitable for you or help you avoid losses. You should obtain your own financial, legal, taxation, and other professional advice as to whether crypto is an appropriate investment for you.

Crypto Holdings are not Covered by FDIC or SIPC

US broker-dealers seeking to offer their clients the ability to trade crypto often work with another entity (a "Crypto Broker/Custodian") that is suitably licensed, and with which clients trading crypto maintain separate accounts in their own names. These Crypto Broker/Custodians are not broker-dealers and generally maintain that the cryptocurrencies they offer are not securities. As such, SIPC coverage does not apply to accounts at Crypto Broker/Custodians. Likewise, most Crypto Broker/Custodians are not insured banks, and crypto is not cash, so FDIC coverage does not apply to accounts at Crypto Broker/Custodians.

Crypto Carries Liquidity Risk

Under certain market conditions, you may find it difficult or impossible to liquidate a crypto position quickly at a reasonable price. This can occur, for example, when the market for a particular crypto asset suddenly drops, or if trading is halted due to recent news events, unusual trading activity, or changes in the underlying crypto system. Paxos is not obligated to provide quotes for crypto at any time, and neither Paxos nor DBS guarantees the continuous availability of quotations or trading for crypto on Paxos' platform. Paxos may in its sole discretion cease quoting crypto and/or cease entering new crypto transactions at any time.

Crypto Carries Cyber Risk

Crypto assets are generated and traded according to the digital network protocols established with respect to such crypto assets. Because crypto and the associated digital networks (and related instruments) are inherently digital, the risk of hacking, cyber-attacks and other cybersecurity threats are amplified and omnipresent.

Crypto Carries Legal and Regulatory Risk

Cryptocurrencies exist in uncertain and rapidly developing legal and regulatory landscapes and are subject to evolving government oversight by various federal, state, local and foreign regulators. Legislative and regulatory changes or actions at any level may adversely affect the use, transfer, exchange, and value of crypto. Moreover, due to the novelty of the asset class and the somewhat patchy regulatory oversight of crypto markets, fraud and market manipulation are not uncommon in such markets.

You Will Pay Fees For Trading Crypto

Paxos will charge fees on your crypto trades. Estimated commissions for each trade are displayed on the order entry pages in the Plynk App.

Your Agreement with Paxos Governs Your Paxos Account

Your Paxos Account is governed by the Paxos Exchange Terms & Conditions ("Paxos T&Cs"). You should read the Paxos T&Cs carefully and understand the terms of your relationship with Paxos.

You Are Not Permitted to Short Crypto

Short sales and limit orders of crypto and purchasing crypto on margin are prohibited. The inability to open short crypto positions or place limit orders may negatively impact your ability to protect against trading losses.

The Crypto Available to You Is Limited and Subject to Change

The crypto available for trading in your Paxos Account is limited. Paxos or DBS may further limit the available crypto to be traded on the Plynk App at their own discretion and without prior notice to you. A complete list of currently available crypto that may be purchased in your Paxos Account can be found in the Plynk App.

Risk of Disruption or Interruption of Access to Paxos Account

Paxos relies on computer software, hardware, and telecommunications infrastructure and networking to provide services to you, and without these systems it cannot provide you with access to your account. These computer-based systems and services are inherently vulnerable to disruption, delay or failure, which may cause you to lose access to the Plynk App and thereby your Paxos Account or may cause Paxos not to be able to provide crypto quotations or trading or may negatively affect any or all aspects of Paxos' services.

Other Important Information Covered by Paxos T&Cs

If at any time you wish to transfer some or all of your digital asset holdings out of your Plynk-linked Paxos Account and into an independent Paxos account (from which you can then continue to freely trade/custody/transfer such assets), please see the Paxos T&Cs for instructions on how you may do so. In the event that DBS ceases operations, Paxos will contact you to transfer the holdings in your Plynk-linked Paxos Account to an independent account in accordance with the Paxos T&Cs.