Risk Disclosure
Last Updated: December 2024
⚠️ IMPORTANT RISK WARNING
Cryptocurrency trading and investing carries substantial risk of loss. You could lose some or all of your investment. Do not invest money you cannot afford to lose. Past performance does not indicate future results. This document is not investment advice.
1. Market Risk
Cryptocurrency markets are highly volatile. Prices can fluctuate dramatically in short periods:
- Bitcoin has experienced 80%+ declines in single bear markets
- Altcoins can be even more volatile than major cryptocurrencies
- Market sentiment shifts can cause sudden price movements
- Low liquidity in certain trading pairs increases volatility
- Regulatory announcements can cause sharp price swings
2. Leverage and Margin Trading Risk
Trading with leverage multiplies both gains and losses:
- 100x leverage means a 1% price move results in 100% loss of your margin
- Liquidation occurs when losses exceed your margin balance
- Flash crashes can trigger automatic liquidation
- Funding rates and fees reduce profitability over time
- Most leverage traders lose money in the long term
3. Technology Risk
Our platform and blockchain networks carry inherent technological risks:
- Smart contract vulnerabilities could lead to fund loss
- Network congestion may delay transaction processing
- Wallet compromises could result in asset theft
- Software bugs may cause platform outages
- Quantum computing may threaten current encryption
4. Regulatory Risk
Cryptocurrency regulation is rapidly evolving:
- New regulations could restrict trading activities
- Tax implications vary by jurisdiction
- Sanctions may affect certain cryptocurrencies
- Regulatory changes could impact asset prices
- Exchange license requirements may change
5. Counterparty Risk
Risks associated with third parties we work with:
- Bank failures could freeze deposits/withdrawals
- Payment processor insolvency
- Custody provider security breaches
- Staking provider failures
- Insurance coverage limits and exclusions
6. Operational Risk
System Failures
Exchange outages, database failures, network issues, or DDoS attacks could prevent trading or access to funds
Human Error
Mistakes in order placement, incorrect address entry, or forgotten passwords can result in permanent loss
Fraud & Theft
Despite security measures, sophisticated attacks could compromise accounts or platform security
Key Loss
Loss of private keys means permanent loss of assets. We cannot recover lost keys
7. Liquidity Risk
Some assets may lack sufficient liquidity:
- Limited order book depth in lesser-known coins
- Wide bid-ask spreads on low-volume pairs
- Slippage on large orders in thin markets
- Difficulty exiting positions quickly
- Pump and dump schemes on low-cap assets
8. AI Trading Risk
Our AI Quant trading features carry additional risks:
- Algorithms may perform poorly in unprecedented market conditions
- Backtesting results do not guarantee future performance
- AI models can experience "overfitting" to historical data
- Automated trading can amplify losses during volatility
- No guarantees of promised returns or daily percentages
9. Risk of Total Loss
Complete Loss Possible
You could lose your entire investment. Cryptocurrency markets are speculative. Some coins go to zero. Leverage trading can result in loss exceeding your initial investment. Never trade with funds designated for essential expenses.
10. Risk Management Best Practices
To mitigate risks, we recommend:
- Only invest money you can afford to lose
- Diversify across multiple assets and platforms
- Use appropriate position sizing (2-5% per trade)
- Set stop-loss orders to limit downside
- Avoid leverage if you're inexperienced
- Keep assets in cold storage wallets
- Enable two-factor authentication
- Do your own research before investing
- Be skeptical of guaranteed returns
- Track your trades for tax compliance
11. Disclaimer
This platform and its services are provided "as is" without warranties. We make no representations about:
- Accuracy of real-time price data
- Future price movements or market direction
- Profitability of trading strategies
- Security or integrity of assets
- Continuity of service
12. Contact Us
If you have questions about these risks, contact our Risk Management Team at risk@24htrading.com