General Risk Disclosures

Last updated on June 2024

GENERAL RISK DISCLOSURES

Please consider the information in this Risk Disclosure Statement (“Statement”) as a general overview of the risks associated with the services offered by Umoja Labs Inc. (“Umoja Labs”) and its affiliates (the “Services”) made for your awareness only. We do not intend to provide investment or legal advice through this Statement and make no representation that the Services described herein are suitable for you or that information contained herein is reliable, accurate or complete. We do not guarantee or make any representations or assume any liability regarding financial results based on the use of the information in this Statement and further do not advise to rely on such information in the process of making a fully informed decision whether or not to use the Services. The risks outlined in this Statement are not exhaustive and this Statement only outlines the general nature of certain risks associated with crypto assets and does not discuss in detail all risks associated with holding or trading crypto assets. Users should undertake their own assessment as to the suitability of using crypto assets and associated Services based on their own investigations, research, and based on their experience, financial resources, and goals. You should not deal with crypto assets unless you understand their nature and the extent of your exposure to risk.

Note that specific disclosures and terms of service will apply with respect to various offerings of Umoja Labs, which will be published separately. Users should refer to those terms in addition to the disclosures herein when deciding whether to utilize the Services.

For the purpose of this Statement “you”, “your”, and “User” mean a user of our services and “we”, “us”, “our”, or “Umoja”, mean Umoja Labs Users are strongly advised to read this Risk Disclosure Statement carefully before deciding to start using the Services.

RISK OF LOSS WHEN DEALING IN CRYPTO ASSETS CAN BE SUBSTANTIAL AND YOU SHOULD, THEREFORE, CAREFULLY CONSIDER WHETHER SUCH ACTIVITY IS APPROPRIATE FOR YOU IN LIGHT OF YOUR CIRCUMSTANCES AND FINANCIAL RESOURCES. YOU SHOULD BE AWARE OF THE FOLLOWING:

Crypto Assets Are Not Legal Tender In Most Jurisdictions

Most crypto assets are not backed by any central government or legal tender (except in a few, discrete cases), meaning each country has different standards. There is no assurance that a person who accepts crypto assets as payment today will continue to do so in the future. Holders of crypto assets put their trust in a digital, decentralized, and partially anonymous system that relies on peer-to-peer networks and cryptography to maintain its integrity, and neither vendors nor individuals have an obligation to accept crypto assets as payment in the future;

Loss of value, Volatility, and Uncertainty of Future Performance

There is typically limited or no fundamental reasoning behind the pricing of crypto assets, creating the risk of volatility and unpredictability in the price of crypto assets relative to fiat currencies. Crypto assets have had historically higher price volatility than fiat currencies, including irrational and extreme moves in price as the process for valuation can be speculative and uncertain.

Liquidity Risk

Crypto assets can have limited liquidity that can make it difficult or impossible to sell or exit a position when desired. This can occur at any time, especially during periods of high volatility.

Market forces

Trading in crypto assets may be susceptible to irrational market forces, such as speculative bubbles, manipulation, scams, and fraud.

Financial Crime and Cyber Attacks

Cybercrime relating to crypto assets can be more prevalent than other financial crimes as the ecosystem is totally digital and traditional governance and risk mitigants may be lacking. For example, a 51% attack is an attack on a blockchain by any person or group of persons who control more than 50% of the network. Attackers with majority control of a network can interrupt the recording of new blocks, alter payment history, and subvert funds. Users are susceptible to malware fake/hijacked addresses and other forms of cyber-attacks and Users should always take care of passwords and double-check the addresses and URLs before loading software or interacting with any platform, protocol, or service.

Absence of Control

Umoja is not a broker, agent, or advisor and has no fiduciary relationship or obligation to Users in connection with any transaction or other decision or activity undertaken by you using the Services. We do not control whether your use of the Services is consistent with your financial goals. It is up to Users to assess whether their financial resources are appropriate for their respective activity with us and risk appetite in the products and services they use.

Availability of Services

We do not guarantee that the Services will be available at any given time or that the Services will not be subject to unplanned service interruptions or network congestion. You may not be able to buy, sell, store, transfer, redeem, send, or receive crypto assets when you want to.

Technology Risk

The risks of crypto assets being transacted via new technologies (including distributed ledger technologies) include, among other things, anonymity, irreversibility of transactions, accidental transactions, transaction recording, and settlement. Transactions in crypto assets on a blockchain rely on the proper functioning of complex software, which exacerbates the risk of access to or use of crypto assets being impaired or prevented. Moreover, there is a risk of failures, defects, hacks, exploits, protocol errors, or unforeseen circumstances that might occur in connection with a crypto asset or the technologies on which the crypto asset is based.

Irreversible Transactions

Transactions in crypto assets are generally irreversible. As a result, losses due to fraudulent or accidental transactions may not be recoverable.

Third-Party Risk

Third parties such as payment providers, custodians, exchanges, and banking partners may be involved in the provision of the Services. You may be subject to the terms and conditions of these third parties, and Umoja cannot be responsible for any losses these third parties may cause you.

Taxation and Disclosure of Information

You are responsible for determining the taxes to which you may be subject and their application when using the Services. It is your responsibility to report and pay any taxes that may arise from transactions and you acknowledge that Umoja does not provide legal or tax advice regarding such transactions. If you have concerns about your tax treatment or obligations you may wish to seek independent advice.

You understand that when, where, and as required by applicable law, Umoja will disclose available information relating to transactions transfers, distributions, or payments to the appropriate regulatory and tax authorities or other public authorities. Similarly, when, where, and as required by applicable law, Umoja will withhold taxes related to your transactions, transfers, distributions or payments.

No Investment and Legal Advice

Communications or information provided by Umoja shall not be considered or construed as investment advice, financial advice, trading advice, or any other type of advice. The User is the only party who can determine whether an investment, investment strategy, or related transaction is appropriate based on his or her personal investment objectives, financial situation, and risk tolerance, and shall be solely responsible for any losses or liabilities that may result.

Regulatory Risk

The regulatory landscape for crypto assets is uncertain and subject to change. Users acknowledge that changes in regulation or policy in any jurisdiction may affect the legality, utility, and value of crypto assets. Such changes may have retroactive effects and impose additional burdens or obligations on Users. It is the User's responsibility to stay informed of and comply with regulatory requirements as they evolve. By using the Services, the User warrants that such use complies with all relevant laws and does not require Umoja to be registered or regulated under any law and indemnifies Umoja for any loss it or its affiliates sustains through the User's use of the Services.

Smart Contract Risks

The use of smart contracts carries inherent risks. Due to the immutable nature of blockchain technology, errors or vulnerabilities in the code may lead to irreversible consequences, including the loss of crypto assets. Users are advised to exercise caution and, if necessary, seek independent advice before engaging with smart contracts. Umoja makes no representations, warranties or guarantees regarding the functionality or suitability of any smart contract or software underpinning the Services.

Network Forks and Changes in Protocol

The blockchain technology underlying crypto assets is subject to evolution and change, including forks (both soft and hard), protocol upgrades, or discontinuation. Such changes can significantly affect the value, function, and even the name of a crypto asset.

Interoperability Risks

Efforts to achieve greater interoperability between different blockchain platforms carry specific risks, including the potential for loss of funds or assets becoming inoperable across networks. The complexity and evolving nature of blockchain interoperability may introduce new vulnerabilities. Users are encouraged to exercise due diligence when engaging in transactions involving cross-chain functionalities.

Environmental, Social, and Governance (ESG) Considerations

Users should be aware that the operation of blockchain networks, especially those utilising proof-of-work consensus mechanisms, can have significant environmental impacts due to their energy consumption. Social and governance issues related to blockchain technologies and crypto assets may also influence their attractiveness and regulatory treatment. Users are encouraged to consider these factors when making decisions to use the Services.

Updates and Upgrades

The technologies, platforms, and services related to crypto assets are subject to continuous development, leading to updates and upgrades that may temporarily disrupt services or affect the functionality of crypto assets. Users are advised to remain informed about such changes and to understand their potential impacts.

Private Key Risks

The security of a user's crypto assets is fundamentally tied to the safeguarding of their private keys. Loss or unintended disclosure of private keys can lead to irreversible loss of access to crypto assets. Users are solely responsible for the secure storage and backup of their private keys and should employ appropriate security measures, such as encrypted backups or multi-signature wallets, to mitigate the risk of loss.