Platform Risk Statement
Last updated on November 8th, 2024
RISK STATEMENT OVERVIEW
This 1Bitcoin.ca Platform Risk Statement ("Risk Statement") is delivered in connection with the use of 1Bitcoin.ca's crypto asset trading platform (the "1Bitcoin.ca Platform") and is incorporated by reference into the online Terms of Service you will accept when opening an account. Capitalized terms used and not defined in this Risk Statement have the meanings given to them in the Terms of Service.
By using the 1Bitcoin.ca Platform or any related services (collectively, the "Services"), you acknowledge there are substantial risks associated with the purchase, sale, and management of crypto assets through us, and you agree to assume these risks, including:
RISKS ASSOCIATED WITH YOUR ACCOUNT
(a) Trading in crypto assets may not be suitable for everyone. You should carefully consider whether trading is appropriate for you in light of your knowledge, experience, financial objectives, financial resources, and other relevant circumstances. Crypto asset trading may be particularly unsuitable if using funds from retirement savings, student loans, mortgages, emergency funds, or funds set aside for other purposes. The volatility and unpredictability of crypto asset prices relative to fiat currency may lead to significant losses over short periods.
(b) The 1Bitcoin.ca Platform does not function as a bank or financial institution. We do not hold, manage, or custody your crypto assets, and no interest is earned on assets managed through the 1Bitcoin.ca Platform. Funds in CAD deposited to the 1Bitcoin.ca Platform are only available for the purchase of Bitcoin and cannot be withdrawn or used for other purposes. CAD deposits will be provided as vouchers redeemable exclusively for Bitcoin transactions on the 1Bitcoin.ca Platform.
(f) Bitcoin transactions are irreversible once broadcast to the Bitcoin network, and losses due to fraudulent or accidental transactions cannot be recovered. You are responsible for the security of your own wallet and transactions on the blockchain.
(g) The crypto industry has experienced cyberattacks and other technical issues leading to the theft or loss of crypto assets. While we do not hold custody of assets, the non-custodial nature of the 1Bitcoin.ca Platform does not eliminate the risk of technical issues or cyberattacks that may affect your assets or transactions.
(h) Using an Internet-based trading platform involves risks, including potential failures of hardware, software, and Internet connections. 1Bitcoin.ca is not responsible for communication failures, disruptions, errors, or delays you may experience when using the Services.
GENERAL RISKS ASSOCIATED WITH BITCOIN
(a) Volatility and Liquidity: The price and liquidity of Bitcoin fluctuate significantly, which may lead to substantial loss in the value of your crypto assets.
(b) Not Legal Tender: Bitcoin is not issued by a central bank and lacks government-backed protections. Bitcoin is not legal tender and does not carry the same protections as funds deposited in a bank.
(c) Value Dependent on Market Participants: Bitcoin derives its value from the demand of market participants. A loss of confidence among users may reduce demand relative to supply, potentially resulting in a collapse in Bitcoin's value.
(d) Short History Risk: Bitcoin's relatively brief history as an open-source technology means there may be ongoing technical developments in blockchain technology that could impact its value. While the Bitcoin community has addressed numerous challenges, there is no guarantee that it will continue to navigate unforeseen challenges effectively.
(e) Blockchain Forks: Bitcoin's open-source nature means the network can fork, creating multiple versions that may impact Bitcoin's viability or value. 1Bitcoin.ca may not support new assets created from such forks, meaning you may need to self-manage any assets arising from these forks.
(f) Code Defects: Defects in Bitcoin’s source code have, in the past, led to issues for users, including loss of assets. Advancements in digital computing or quantum computing could make Bitcoin's cryptographic security vulnerable to attack, impacting the broader value of Bitcoin.
(g) Cybersecurity Risk: The digital nature of Bitcoin exposes it to increased risks of fraud and cyberattacks. A breach could lead to data loss, reputational harm, regulatory penalties, and financial losses. Cybersecurity risks extend to third-party services, though 1Bitcoin.ca strives to work with reputable partners to mitigate these risks.
(h) Concentration Risk: Certain addresses on the Bitcoin network hold large amounts of Bitcoin. A liquidation of these holdings could result in high volatility. Additionally, a "51% attack" could compromise the Bitcoin network, potentially reducing trust and devaluing Bitcoin.
REGULATORY RISKS ASSOCIATED WITH BITCOIN
(a) Regulatory Changes: Changes in law may impact the use, transfer, exchange, or value of Bitcoin and could be sudden and without notice.
(b) Prior to offering Bitcoin on the 1Bitcoin.ca Platform, we conducted due diligence to assess Bitcoin's regulatory status under Canadian laws. In the event that Bitcoin is reclassified as a security or derivative, we may no longer support Bitcoin trading, and users would be required to manage their holdings independently.
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