Crypto Assets Risk Warning
High risk investment product
The value of investments and the income obtained from them may experience significant fluctuations up and down, and the entire amount invested may be lost.
Investments in early-stage projects involve a high level of risk, so it is necessary to properly understand their business model.
Crypto assets are not covered by customer protection mechanisms such as the Deposit Guarantee Fund or the Investor Guarantee Fund.
Crypto assets’ prices are determined in the absence of mechanisms that ensure their correct formation, such as those present in regulated securities markets.
Many crypto assets may lack the liquidity necessary to unwind an investment without suffering significant losses, given that their circulation among investors, both retail and professional, may be very limited.
Risks inherent to technology
Distributed ledger technologies are still in an early stage of maturity, with many of these networks having been created recently, so they may not be sufficiently tested and there may be significant flaws in their operation and security.
The registration of transactions in networks based on distributed ledger technologies works through consensus protocols that may be susceptible to attacks that attempt to modify said registry and, if these attacks are successful, there would be no alternative registry to support said transactions or therefore the balances corresponding to the public keys, and all crypto assets could be lost.
The anonymity that crypto assets can provide makes them a target for cybercriminals, since if they steal credentials or private keys, they can transfer the crypto assets to addresses that make their recovery difficult or impossible.
Custody of crypto assets is one of the main risk factors to be considered, as crypto assets may be lost in their entirety in the event of theft or loss of private keys. As explained below in the Legal Risks section, crypto assets are held in collective global digital wallets (omnibus wallets) in the name of eToro (Europe) Ltd acting on behalf of its clients, and the private keys of these global wallets are not provided to clients, thereby reducing the risk of theft or loss of private keys by clients. eToro (Europe) Ltd is the entity that holds custody of clients’ crypto assets, performing custody in Cyprus and under the laws of Cyprus.
Legal risks
Acceptance of crypto assets as a medium of exchange is still very limited and there is no legal obligation to accept them.
When the service provider is not located in a country of the European Union, the resolution of any conflict could be costly and fall outside the scope of the competence of the EU authorities.
Crypto assets purchased through the eToro platform are held in collective global digital wallets (omnibus wallets) in the name of eToro (Europe) Ltd acting on behalf of its clients and the private keys to these global wallets are not provided to clients. The digital wallets used for the safekeeping of clients’ crypto assets are separate and segregated from the digital wallets used for the safekeeping of crypto assets purchased by eToro (Europe) Ltd for its own portfolio.
Clients retain all rights and benefits arising from the ownership of crypto assets held by eToro (Europe) Ltd on behalf of the clients. Clients have online access to the crypto assets they own through the eToro platform, as set out in the terms and conditions of this service.