The Client understands that an investment managed by Golden Algorithm, and in virtual currencies and related Financial Products, involves substantial risk, including, without limitation, the following (the terms below shall have the meaning assigned to them in the Agreement):
1. Golden Algorithm has no operational history
2. Golden Algorithm maintains sole discretion in managing the Sub-Accounts. The Client will not have the ability to influence the performance or decisions made by Golden Algorithm.
3. The liquidity of the assets in which Golden Algorithm will invest may vary over time, and therefore a Client may not be able to liquidate a portion of its Sub-Account upon request. Investment in virtual currency or digital coins including, but not limited to, Bitcoin, Ethereum and Tokens is subject to severe constraints on liquidity. An investment under the Agreement is suitable only for a sophisticated and experienced investor who is financially able to maintain its investment for an indefinite period of time and who can afford a loss of the entire investment.
4. Client is cautioned that the assumptions made by Golden Algorithm and the success of its investment strategies are highly uncertain, and are subject to a number of factors that make them prone to a range of possible outcomes that can result in substantial losses to the related Sub-Account. Economic and market conditions may change, which may materially impact the success of Golden Algorithm’s intended strategies as well as its actual course of conduct.
5. Strategy related losses can result from excessive concentration in the same investment policy or in the general or specific economic events that adversely affect particular strategies. Furthermore, policies employed may evolve over time, and perhaps change materially, in ways that would be difficult (if not impossible) for Golden Algorithm to detect or follow. There can be no assurance that any trading method employed by Golden Algorithm will produce profitable results. Moreover, past performance is not necessarily indicative of future profitability.
6. The value of Cryptocurrencies and Tokens is highly volatile, however the Performance Fee shall be paid based thereon. Cryptocurrency investments may be very sensitive to movements in related markets and trends and Cryptocurrency markets.
7. Cryptocurrencies are currently not traded on regulated exchanges and the trading platforms are therefore highly unstable. Therefore, the Client is subject to the risk that certain assets will cease to be traded on certain platforms, there being limitations thereon or volatility in prices or a close of the relevant trading platforms. Each of the foregoing would adversely affect the liquidity of such assets.
8. The cryptocurrencies and related Financial Products market is a new and rapidly developing market which may be subject to substantial and unpredictable disruptions that cause significant volatility in the prices of cryptocurrencies and/or related Financial Products. There are no assurances that the market, if any, for cryptocurrencies and/or related Financial Products will be free from such disruptions or that any such disruptions may not adversely affect the ability to sell cryptocurrencies and/or related Financial Products. There is no assurances that Golden Algorithm will be able to sell any cryptocurrencies or other related Financial Products at a particular time or that the price they receive when they sell will be favorable.
9. Many of the Financial Products are new and novel. They have limited operational history and may not perform or function as anticipated. There is significant counter party risk related to these Financial Products, such as risk of default, failure or difficulties to settle transactions, and settlement delays.
10. Financial Products instruments can be highly volatile and expose investors to a high risk of loss. The low initial margin deposits normally required to establish a position in such instruments permit a high degree of leverage. As a result, depending on the type of instrument, a relatively small movement in the price of a contract may result in a profit or a loss which is high in proportion to the amount of funds actually placed as initial margin and may result in unquantifiable further loss exceeding any margin deposited. In addition, daily limits on price fluctuations and speculative position limits on exchanges may prevent prompt liquidation of positions resulting in potentially greater losses. Transactions in cryptocurrency related Financial Products may involve additional risks there may be no exchange market on which to close out an open position. It may be impossible to liquidate an existing position, to assess the value of a position or to assess the exposure to risk. Contractual asymmetries and inefficiencies can also increase risk.
11. A short sale involves the sale of an asset that the seller does not own in anticipation of purchasing the same asset (or an asset exchangeable therefore) at a later date at a lower price. To make delivery to the buyer, the seller must borrow the asset, and is obligated to return the asset to the lender, which is accomplished by a later purchase of the asset. When a short sale is made, the seller must leave the proceeds thereof with the broker and deposit with the broker an amount of cash or assets sufficient under current margin regulations to collateralise its obligation to replace the borrowed assets that have been sold. A short sale involves the risk of a theoretically unlimited increase in the market price of the asset. In addition, a short sale involves the risk that borrowed assets will have to be returned to the lender at a time when such assets cannot be borrowed from other sources, potentially requiring a short sale transaction to be closed at an inopportune time or under disadvantageous circumstances.
12. The investments made by Golden Algorithm will not be diversified and will be focused on Bitcoin and Bitcoin-related Financial Products. Consequently, unfavourable performance of Bitcoin relative to the strategies employed by Golden Algorithm could have a material adverse impact on the performance of the investments.
13. Golden Algorithm may leverage its positions by borrowing funds to purchase cryptocurrencies and Financial Products. Such leverage has the effect of potentially increasing losses as well as the risk that losses occur. Under certain circumstances, a lender may demand an increase in the collateral that secures the obligations and, if the Client is unable to provide additional collateral, the lender could declare an event of default and liquidate assets held to satisfy the outstanding obligations. Liquidation in such circumstances could have extremely adverse consequences.
14. Regulation of virtual currencies, related Financial Products, blockchain technologies, and virtual currency exchanges is currently undeveloped and likely to evolve rapidly, vary significantly among international, federal, state and local jurisdictions and is subject to significant uncertainty. Various legislative and executive bodies in the world are currently considering, or may in the future consider, laws, regulations, guidance, or other actions, which may severely impact the ability to trade cryptocurrencies and/or derivatives thereof. Failure to comply with any laws, rules and regulations, some of which may not exist yet or are subject to interpretation and may be subject to change, could result in a variety of adverse consequences, including civil penalties and fines.
15. As blockchain networks and blockchain assets have grown in popularity and in market size, governments and regulatory agencies have begun to take interest in, and in some cases regulate, their use and operation. To the extent that a government or quasi governmental agency exerts regulatory authority over a blockchain network or asset, the Client’s assets may be adversely affected. Blockchain networks currently face an uncertain regulatory landscape in many jurisdictions which may, in the near future, adopt laws, regulations or directives that affect the network and its users. The effect of any future legal or regulatory change is impossible to predict,
but such laws, regulations or directives may directly and negatively impact the ability to manage the Sub-Account. New or changing laws and regulations or interpretations of existing laws and regulations may adversely impact returns on investments.
16. A significant disruption in Internet connectivity could disrupt the Bitcoin or Ethereum network’s operations until the disruption is resolved, and could have an adverse effect on the value of virtual currencies and/or any related Financial Products held in the Sub-Account. In addition, virtual currency networks have been subjected to a number of denial of service attacks, which led to temporary delays in transactions. It is possible that such an attack could adversely affect the investments and the value of the virtual currencies.
17. Client is aware of, and accepts risks associated with investing in, trading and holding virtual currencies and related Financial Products, including, but not limited to, risks associated with (A) decentralization of the digital coins; (B) anti money laundering; (C) fraud; (D) high volatility; (E) anonymity of transactions; (F) exploitation for illegal purposes; (G) theft; (H) instability and other flaws of virtual currency exchanges or brokers/custodians; (I) the lack of regulation of virtual currencies.
18. The software and hardware, technology and technical concepts and theories (jointly, the “Technology”) usually used by issuers of virtual currencies is still in an early development stage and unproven, there is no warranty that the Technology will be uninterrupted or error-free and there is an inherent risk that the Technology could contain weaknesses, vulnerabilities or bugs causing, inter alia, the complete loss of the virtual currencies and the Client’s entire investment amount.
19. The blockchain technology allows new forms of interaction and that it is possible that certain jurisdictions will apply existing regulations on, or introduce new regulations addressing, blockchain technology-based applications, which may be contrary to any setup of the investment process and which may, inter alia, result in adverse effect to any investment, including the termination and the loss of all of the digital coins the entire investment.
20. The underlying software application and software platform of the virtual currencies, as well as the Exchange, exchanges, wallets and other involved software, other technology components and/or platforms concerned with virtual currencies may be exposed to attacks by hackers or other individuals that could result in theft or loss of the virtual currencies.
21. Public blockchain based systems depend on independent validators, and therefore may be vulnerable to consensus attacks including, but not limited to, double-spend attacks, majority voting power attacks, race condition attacks and censorship attacks. Any successful attacks present a risk to such system, expected proper execution and sequencing of the digital coin transactions, and expected proper execution and sequencing of software computations, including loss of the entire investment.
22. Commonly digital coin networks use an in-built decentralized governance system (“Governance System”). For these reasons, it is possible that the Governance System adopts proposals that have an adverse effect on the useful functioning of such networks and/or the value of the digital coins. If a Governance System is attacked or becomes controlled either directly or indirectly by some party who makes unwise decisions, or the community generally makes unwise decisions, the value of the digital coins (including the investment) might be greatly reduced or even permanently lost.

THE FOREGOING LIST OF RISK FACTORS DOES NOT PURPORT TO BE A COMPLETE OR EXHAUSTIVE ENUMERATION OR EXPLANATION OF THE RISKS INVOLVED. YOU ARE URGED TO CONSULT YOUR ADVISERS BEFORE DECIDING TO ENTER INTO THIS AGREEMENT.