Risk Disclosures

Important Information About Cryptocurrency Trading Risks

IMPORTANT RISK WARNING

Trading cryptocurrencies and digital assets involves substantial risk of loss and is not suitable for every investor. You should carefully consider whether trading is appropriate for you in light of your experience, objectives, financial resources, and other relevant circumstances.

YOU MAY LOSE ALL OR MORE OF YOUR INITIAL INVESTMENT. Do not invest money you cannot afford to lose.

Cryptocurrency Market Risks

1. Extreme Volatility

Cryptocurrency markets are highly volatile. Prices can fluctuate dramatically within short periods, potentially resulting in significant losses. Past performance is not indicative of future results.

2. Regulatory Uncertainty

Cryptocurrency regulations are evolving and vary by jurisdiction. Changes in laws, regulations, or government policies may adversely affect the value, transferability, or availability of cryptocurrencies.

3. Liquidity Risk

Certain cryptocurrencies may have limited liquidity, making it difficult to buy or sell at desired prices. Low liquidity can result in significant price slippage and increased transaction costs.

4. Technology and Security Risks

Cryptocurrencies rely on blockchain technology and digital wallets. Technical failures, cyberattacks, hacking, or loss of private keys can result in permanent loss of assets. LX Exchange implements security measures but cannot guarantee absolute protection against all threats.

5. Counterparty Risk

Trading on decentralized exchanges involves counterparty risk. There is no central authority to reverse transactions or recover funds in case of errors, fraud, or disputes.

6. Market Manipulation

Cryptocurrency markets may be subject to manipulation, including pump-and-dump schemes, wash trading, and spoofing. Such activities can distort prices and result in losses for unsuspecting traders.

Stablecoin Risks & Genius Act Disclosure

Stablecoin Specific Risks

Stablecoins, including LXUSD, RLUSD, and USDT, are designed to maintain a stable value relative to a reference asset (typically the U.S. Dollar). However, stablecoins are NOT insured by the FDIC or any government agency and carry unique risks:

  • De-pegging Risk: Stablecoins may lose their peg to the reference asset due to market conditions, liquidity issues, or loss of confidence.
  • Reserve Risk: The value of a stablecoin depends on the adequacy and quality of its reserves. Insufficient or mismanaged reserves can lead to loss of value.
  • Redemption Risk: Issuers may impose restrictions, delays, or fees on redemptions, or may become unable to honor redemption requests.
  • Regulatory Risk: Stablecoins face evolving regulatory scrutiny. New regulations may impact their operation, value, or availability.

Genius Act Compliance Notice

In accordance with the Genius Act and applicable stablecoin regulations, LX Exchange provides the following disclosures:

  • Stablecoins offered on this platform are not legal tender and are not backed by any government.
  • Stablecoins are not deposits and are not insured by the FDIC, SIPC, or any other government agency.
  • The value of stablecoins can fluctuate, and you may lose money.
  • Issuers of stablecoins may not be subject to the same regulatory oversight as banks or other financial institutions.
  • You should review the issuer's disclosures regarding reserves, redemption policies, and risk factors before trading.
Additional Risk Factors

7. Operational Risks

Platform outages, system failures, or maintenance may prevent you from accessing your account or executing trades at critical times.

8. Tax Implications

Cryptocurrency transactions may have tax consequences. You are solely responsible for determining and complying with all applicable tax obligations. Consult a tax professional for guidance.

9. Irreversible Transactions

Blockchain transactions are generally irreversible. Once a transaction is confirmed, it cannot be undone. Errors, including sending funds to incorrect addresses, may result in permanent loss.

10. Lack of Consumer Protections

Unlike traditional financial products, cryptocurrencies may not be covered by investor protection schemes, deposit insurance, or other consumer safeguards.

User Acknowledgment

By using LX Exchange, you acknowledge that you have read, understood, and accepted all risks disclosed on this page. You confirm that you are aware of the potential for loss and that you are trading at your own risk.

If you do not understand these risks or are uncomfortable with them, you should not trade cryptocurrencies.

Last Updated: February 2026

For questions or concerns, please contact: [email protected]