Risk Disclosure

INTRODUCTION

FalconX Limited (hereinafter, "Company", “we”, “us”, “our” or “FalconX”), incorporated in Malta is authorised as a Crypto-Asset Services Provider by the Malta Financial Services Authority (MFSA) pursuant to Regulation 2023/1114 on Markets in Crypto-Assets as implemented in Malta by the Markets in Crypto Assets Act (Chapter 647 of the Laws of Malta).

FalconX is also licensed as a Financial Institution by the MFSA pursuant to the Financial Institutions Act (Chapter 376, Laws of Malta) to provide payment services exclusively in relation to electronic money tokens (EMTs).

SCOPE

The following information is applicable to our clients (hereinafter, “you” or “your”) when making use of services or products provided by FalconX Limited.

Trading and holding crypto-assets carries significant risk including the loss of your entire investment. By making use of products and services provided, you confirm that you comprehend and accept such risks.

Crypto-assets are not covered by any investor compensation or deposit guarantee schemes. FalconX provides no guarantees regarding the value, performance, or security of any crypto-asset provided and disclaims all liability for any direct or indirect losses arising from trading and holding crypto-assets or from relying on information provided. You are solely responsible for your decisions, including compliance with applicable tax, legal and regulatory requirements.

ADDITIONAL RISK IN RELATION TO CRYPTO-ASSET SERVICES PROVIDED

Market Volatility - Crypto-asset prices fluctuate according to market volatility and conditions potentially leading to losses including the entire value of your investment.
Liquidity Risk - Depending on available market depth pricing may experience slippage, trades may be executed at the closest available prices.
Custody Risk – Loss or compromise of private keys, wallets or custody infrastructure may lead to permanent loss of crypto-assets.
Regulatory Risk – Changes in law or regulation may affect the availability, legality, or value of crypto-assets and related services.
Financial Crime & Market Integrity Risk - The crypto industry may be targeted by scams, money laundering, or market manipulation. While we maintain robust AML/CFT and monitoring controls, these external activities can still negatively impact market prices and integrity.
Tax Risk - Tax treatment for crypto-assets varies by jurisdiction and may change over time. You are solely responsible for understanding and complying with your local tax obligations in relation to your crypto-asset trading.
Technology Risk – Underlying blockchain protocols and smart contracts are prone to vulnerabilities, coding bugs, or operational failures. Such technical flaws can lead to the total loss of assets held within those systems.
Cybersecurity Risk – Crypto-asset platforms may be targets of cyber-attacks, hacking, phishing or other malicious activities which could result in loss of assets or data.
Blockchain and Consensus Risk - Crypto-assets rely on blockchain networks which may be subject to forks, bugs, or consensus failures. Such issues can affect asset usability, value, or availability.
Valuation Risk (Asset-Referenced Tokens) - For tokens backed by reserve assets, there is an inherent risk that the underlying collateral may decline in value or become illiquid. During periods of market stress, the market price of the reserve assets may be lower than the token's face value, leading to price instability or delayed redemptions.
Settlement Finality Risk - Crypto-asset transactions are subject to the principle of settlement finality, once a transaction instruction is broadcast to the blockchain and confirmed, it achieves technical settlement finality. When the required number of network confirmations is met, the transaction is deemed final and it cannot be reversed, canceled, or modified, even in the event of an error or fraudulent activity.
No Guarantee of Returns - Crypto-asset trading is speculative. There are no guarantees of profits or returns, and past performance is not indicative of future results.