Crypto Risks Disclosure
Risks of Trading Cryptocurrency with BitGo Bank & Trust 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 “BitGo Services”) with respect to cryptocurrency tokens (collectively, “crypto”) in an account in the respective client’s name (the “BitGo Account”) at BitGo Bank & Trust N.A. (BitGo), regulated by the Office of the Comptroller of the Currency. The crypto in your BitGo Account is carried at BitGo 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 BitGo Services.
DBS has elected to work with BitGo 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 BitGo (the aforementioned BitGo Account). All trading you do in crypto through the Plynk App will be executed in your BitGo Account (and not in your account at DBS), and BitGo will be your custodian and counterparty for those trades. This means that BitGo 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 BitGo 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 BitGo 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. BitGo 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 BitGo may prevent the access of your crypto. Any insurance or surety bonds maintained by BitGo 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 BitGo crypto services available to you through the Plynk App, neither DBS nor BitGo makes any assessment, representation, or warranty concerning the appropriateness or suitability of crypto for your financial circumstances. The BitGo Services are "execution only." DBS and BitGo will not advise you on any transaction. Neither DBS nor BitGo 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. BitGo is not obligated to provide quotes for crypto at any time, and neither BitGo nor DBS guarantees the continuous availability of quotations or trading for crypto on the BitGo platform. BitGo 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
BitGo 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 BitGo Governs Your BitGo Account
Your BitGo Account is governed by the BitGo Custodial Services Agreement and Electronic Trading Agreement. You should read both carefully and understand the terms of your relationship with BitGo.
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 BitGo Account is limited. BitGo 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 BitGo Account can be found in the Plynk App.
Risk of Disruption or Interruption of Access to BitGo Account
BitGo 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 BitGo Account or may cause BitGo not to be able to provide crypto quotations or trading or may negatively affect any or all aspects of BitGo services.
