FAQ
Purpose of the risk warning statement
This General Risk Warning Statement (the “GRWS” or “Statement”) is designed to provide you with a non-exhaustive overview of the key risks associated with the use of Solus’s trading platform and related services. By highlighting these risks, we aim to ensure that you have a clear understanding of the potential downsides and challenges that may arise when engaging in cryptocurrency derivatives trading. It is crucial for you to carefully consider these risks before deciding to use our platform.
While this statement covers a broad range of risks, it is not comprehensive and does not account for all possible risks or how such risks may relate to your personal circumstances, financial situation, or trading objectives. Therefore, it is essential that you take the time to read through this document thoroughly and conduct your own independent research to fully grasp the nature and extent of the risks involved.
Importance of reading and understanding the risks before using the Solus Platform
Engaging in cryptocurrency derivatives trading carries a significant level of risk and may not be suitable for all users. The highly volatile and unpredictable nature of cryptocurrency markets can lead to substantial losses, especially when combined with the use of leverage. It is crucial that you do not trade with funds that you cannot afford to lose.
Before using Solus’s platform, you must carefully assess your financial situation, trading experience, and risk appetite to determine whether cryptocurrency derivatives trading aligns with your investment goal and risk tolerance. This Statement serves as a starting point for your understanding of the risks involved, but it should not be considered a substitute for independent research and professional advice.
By using Solus platform and services, you acknowledge that you have read, understood, and accepted all the risks outlined in this Statement. You also agree that you are solely responsible for determining the suitability of our products and services for your individual needs and that you will assume all risks associated with your trading activities on our platform.
We strongly recommend that you seek guidance from qualified financial, legal and tax professionals before engaging in cryptocurrency and the risks and potential consequences of your actions. Remember, your use of Solus platform is entirely at your own risk, and you should never trade with funds that you cannot afford to lose.
No Investment, Financial, Trading, Tax or Legal Advice
Solus does not provide personal advice or recommendations
It is important to understand that Solus does not provide any form of personal investment, financial, tax, trading or legal advice. Our platform is designed to facilitate cryptocurrency derivatives trading, and any information provided by Solus is for general informational purposes only. This includes, but is not limited to, market data, price feeds, trading information and educational content.
Any opinions, news, research, analyses, prices, or other information contained on our platform, website, or communicated through our services should not be considered as personalized advice or recommendations. The decision to use our platform and engage in trading activities is entirely yours, and you should not rely on Solus as a substitute for your own independent research and judgment.
Users are solely responsible for determining suitability of products and services
When using Solus platform, you are solely responsible for determining the appropriateness and suitability of our products and services for your individual needs, financial situation, and risk tolerance. We do not take into account your personal circumstances, risk appetite or trading objectives when providing our services.
Before engaging in any trading activities, you should carefully consider whether cryptocurrency derivatives trading is appropriate for you, given your level of expertise, investment goals and financial resources. It is crucial that you understand the nature and extent of the risks involved and only trade with funds that you can afford to lose.
Solus has no fiduciary relationship or obligation to users
Solus does not act as your broker, advisor, or intermediary agent, and we do not monitor your trades, account balances, or market conditions on your behalf, and we will not advise you on the merits or suitability of any particular trade or strategy.
You are solely responsible for monitoring your own trades, account balances, and positions, as well as for implementing your own risk management strategies. Solus will not be liable for any losses incurred as a result of your trading activities or decisions, regardless of whether such losses were influenced by information provided on our platform or by our representatives.
Users are responsible for their own tax obligations and reporting
It is your sole responsibility to determine and fulfill any tax obligations that may arise from your use of Solus platform and trading activities. Solus does not provide any tax advice, nor do we assume any responsibility for withholding, collecting, reporting, or remitting any taxes on your behalf.
You acknowledge that engaging in cryptocurrency derivatives trading may result in tax consequences, depending on your jurisdiction and personal circumstances. It is your obligation to report and pay any applicable taxes, fees, or other charges related to your trading activities to the appropriate authorities.
We strongly recommend that you seek professional tax advice to understand your obligations and ensure compliance with all applicable tax laws and regulations. Solus will not be held liable for any tax related issues, penalties, or fines that may arise from your
use of our platform or failure to comply with your tax obligations.
Restricted Jurisdictions and Eligibility
Reminder of Solus’s restricted jurisdiction policy
It is crucial for users to be aware of and comply with Solus Restricted Jurisdiction Policy. Solus does not offer its services to individuals or entities located in, residing in, or otherwise connected to certain jurisdictions due to legal and regulatory constraints. These restricted jurisdictions include, but may not be limited to, the Cuba, Iran, Syria, North Korea, Iraq, Libya, Lebanon, Crimea and Sevastopol, Nicaragua, Sudan, Venezuela, Yemen, Afghanistan, Belarus, Burma, Somalia, South Sudan, Vietnam, Zimbabwe, Sri Lanka, Donetsk People’s Republic, Luhansk People’s Republic of Ukraine, Kherson Oblast and Zaporizhzhia Oblast.
Additionally, Solus services are not available to individuals or entities located in, residing in or otherwise connected to jurisdictions where the use of cryptocurrency derivatives trading platforms is prohibited or subject to significant restrictions such as Seychelles, Bermuda, Japan, Hong Kong SAR, Canada and Myanmar.
Users’ responsibility to ensure they are eligible to use the platform based on their location and citizenship
It is the user’s sole responsibility to verify that they are legally permitted to access and use Solus platform and services based on their location, residence and citizenship. Users must ensure that they are not located in, residing in, or otherwise connected to any of the restricted jurisdictions mentioned above or any other jurisdiction where the use of Solus platform is prohibited or limited.
Furthermore, users must be aware of and comply with any applicable laws, regulations, and restrictions in their jurisdiction regarding cryptocurrency derivatives trading. It is the User’s obligation to conduct their own due diligence and seek professional legal advice to ensure compliance with local laws and regulations.
Potential consequences of violating the restricted jurisdiction policy
Users who access or use Solus platform and services from restricted jurisdictions or fail to comply with their local laws and regulations may face severe consequences. These consequences may include, but are not limited to:
Immediate termination of the User’s account and access to Solus platform and services, without prior notice.
Market and Price Volatility Risks
Cryptocurrency market volatility and unpredictability
Cryptocurrency markets are known for their high volatility and unpredictability. The prices of cryptocurrencies and their derivatives can fluctuate significantly within short periods, often driven by various factors such as market sentiment, regulatory changes, technological developments, and global economic conditions. This volatility can result in substantial price swings, which may occur at any time, including outside of traditional market hours.
Users should be aware that the value of their positions in cryptocurrency derivatives on Sol's platform can be highly unstable and may experience sudden and significant changes. This volatility can potentially lead to significant losses, especially when trading with leverage.
Potential for significant losses due to market fluctuations
Given the volatile nature of cryptocurrency markets, users of Solus platform face the risk of substantial losses due to market fluctuations. The value of a user’s positions in cryptocurrency derivatives can decrease rapidly and dramatically, potentially leading to the loss of their entire invested capital or more, particularly when trading with leverage.
It is essential for users to understand that trading cryptocurrency derivatives carries a high level of risk and is not suitable for everyone. Users should only trade with funds they can afford to lose and should never risk more than they are comfortable losing.
Influence of external factors on cryptocurrency prices
Cryptocurrency prices can be influenced by a wide range of external factors, many of which are beyond the control of individual users or trading platforms like Solus. These factors may include, but are not limited to:
● Regulatory changes or announcements by governments or financial authorities.
● Macroeconomic events, such as changes in global economic conditions or geopolitical tensions.
● Technological developments or issues related to the underlying blockchain networks.
● Market sentiment and media coverage of cryptocurrencies and related industries.
● Actions of large market participants, such as institutional investors or high-net-worth individuals.
These external factors can contribute to the unpredictability and volatility of cryptocurrency markets, making it challenging for users to anticipate price movements and manage their risks effectively.
Past performance does not guarantee future results
Users should be cautious when evaluating the past performance of cryptocurrencies or their derivatives. Historical price movements, trends, or patterns do not necessarily indicate or guarantee future results. The cryptocurrency market is still relatively new and evolving rapidly, and past performance may not be indicative of how the market will behave in the future.
It is crucial for users to conduct their own research, consider their risk tolerance, and make informed decisions based on their individual financial circumstances and investment objectives. Relying solely on past performance to make trading decisions can be misleading and may expose users to significant risks.
By using Solus’s platform and services, users acknowledge that they understand and accept the risks associated with the volatility and unpredictability of cryptocurrency markets, and that they are solely responsible for any losses incurred as a result of their trading activities.
Liquidity and Availability Risks
Potential lack of liquidity in derivatives markets
Users of Solus platform should be aware that cryptocurrency derivatives markets may experience periods of low liquidity. Liquidity refers to the ease with which an asset can be bought or sold without significantly affecting its price. In low liquidity conditions, users may face difficulties in executing their trades at their desired prices or in a timely manner.
Low liquidity can be caused by various factors, such as reduced market participation, lack of market makers, or significant imbalances between buy and sell orders. During periods of low liquidity, users may experience wider bid-ask spreads, increased price volatility, and limited order book depth, which can adversely impact their ability to enter or exit positions efficiently.
Risk of delays or inability to execute trades
Due to the potential lack of liquidity or other market conditions, users of Solus platform may encounter delays or difficulties in executing their trades. In some cases, users may be unable to execute their trades at their desired prices or at all, particularly during times of high market volatility or network congestion.
Additionally, the underlying blockchain networks on which cryptocurrencies operate may experience delays or congestion, which can impact the settlement of derivative contracts on Solus platform. These delays can result in prolonged exposure to market risk and may prevent users from efficiently managing their positions.
Solus may restrict or suspend services without prior notice
Solus reserves the right to restrict, suspend, or terminate its platform and services, in whole or in part, at any time and without prior notice to users. This may occur due to various reasons, such as:
● Maintenance or upgrades to Solus’s platform or infrastructure.
● Suspected security breaches or unauthorized access to user accounts.
● Compliance with legal or regulatory requirements.
● Extreme market conditions or other unforeseen circumstances.
In the event of a restriction, suspension, or termination of services, users may be unable to access their accounts, execute trades, or withdraw their funds or assets. Solus shall not be liable for any losses or damages incurred by users as a result of such actions, and users acknowledge and accept these risks by using Sol's platform and services.
Technology and Security Risks
Cybersecurity threats and potential for hacking or theft
The cryptocurrency industry is a prime target for cybercriminals due to the digital nature of assets and the potential for high financial gains. Solus platform and its users are exposed to various cybersecurity threats, such as hacking attempts, malware attacks, phishing scams, and other forms of unauthorized access to user accounts or platform infrastructure.
Despite Solus efforts to maintain a robust security framework, there is always a risk that hackers may succeed in breaching the platform’s defenses and gaining unauthorized access to user accounts, funds, or personal information. Such security breaches can result in the theft or loss of user assets, as well as the compromise of sensitive data.
Possibility of platform downtime, technical issues or disruptions
Solus platform relies on complex technological infrastructure, including servers, networks, and software, which may be subject to errors, malfunctions, or failures. These technical issues can result in platform downtime, disruptions to trading activities, or other inconveniences for users.
Furthermore, the cryptocurrency market operates 24/7, and Solus may need to perform scheduled maintenance or upgrades to its platform to ensure optimal performance and security. During these maintenance periods, users may experience temporary interruptions to their access to the platform or its services.
Users’ responsibility for securing account credentials
Users of Solus platform are solely responsible for maintaining the security and confidentiality of their account credentials, including usernames, passwords, and any other authentication methods (e.g., two-factor authentication). Users must take all necessary precautions to prevent unauthorized access to their accounts.
Solus will never ask users to disclose their account credentials and will not be liable for any losses or damages resulting from the compromise of a user’s account due to negligence or failure to secure their login information properly. Users should regularly update their passwords, enable two-factor authentication when available, and be vigilant against phishing attempts or other social engineering tactics designed to steal their account credentials.
Transactions may be irreversible once executed
Users should be aware that cryptocurrency transactions, including those related to derivatives contracts on Solus platform, are generally irreversible once executed. This means that if a user makes a mistake in a transaction, such as entering the wrong wallet address or trading an unintended amount, there may be no way to recover the funds or reverse the transaction.
The irreversible nature of cryptocurrency transactions emphasizes the importance of double-checking all transaction details before confirming and executing them. Solus shall not be responsible for any losses or damages incurred by users due to their own errors or misuse of the platform.
By using Solus platform and services, users acknowledge and accept the technology and security risks associated with cryptocurrency derivatives trading, including the potential for cybersecurity breaches, platform disruptions, and irreversible transactions. Users are solely responsible for taking appropriate measures to secure their accounts and mitigate these risks.
Leverage and Margin Trading Risks
Amplified potential for gains and losses
Solus platform offers leverage and margin trading, which allows users to trade cryptocurrency derivatives with borrowed funds. While leverage can potentially amplify users’ gains, it also significantly increases the risk of substantial losses. Users should be aware that trading with leverage is a high-risk strategy and should only be undertaken by experienced traders who fully understand the risks involved.
When trading with leverage, even small price movements in the underlying cryptocurrency can have a significant impact on a user’s account equity. A minor price fluctuation against a user’s position can result in substantial losses, potentially exceeding the initial investment. Conversely, favorable price movements can lead to significant gains, but users should not rely on these potential gains to offset the risks associated with leveraged trading.
Rapid changes in account equity and potential for liquidation
Leveraged and margin trading positions are subject to rapid changes in account equity due to the amplified impact of price movements. Users must maintain sufficient margin in their accounts to support their open positions. If the market moves against a user’s position and their account equity falls below the required maintenance margin, Solus may initiate a margin call.
A margin call requires the user to deposit additional funds into their account to meet the minimum margin requirements. If the user fails to provide the necessary additional funds within the specified time frame, Solus reserves the right to liquidate the user’s positions to bring the account equity back above the required margin level. Liquidations can occur automatically and rapidly, potentially resulting in the loss of some or all of the user’s invested capital.
Margin calls and possibility of losses exceeding initial deposit
In some cases, particularly during periods of high market volatility or low liquidity, a user’s losses may exceed their initial deposit. This situation can arise when the market moves so rapidly that Solus risk management systems cannot liquidate the user’s positions quickly enough to prevent further losses.
Users should be aware that they may be liable for any negative account balances resulting from leveraged or margin trading. Solus reserves the right to pursue users for any outstanding debts or losses that exceed their initial deposit. Users should never trade with more funds than they can afford to lose and should carefully consider their risk tolerance and financial situation before engaging in leveraged or margin trading.
Product Specific Risks
Unique risks of perpetual futures and other derivatives
Solus platform offers various cryptocurrency derivatives products, such as perpetual futures contracts. These products come with their own unique risks that users should be aware of before trading.
Perpetual futures contracts, for example, do not have an expiration date and are subject to funding rate payments. The funding rate is a mechanism used to ensure that the price of the perpetual contract stays close to the price of the underlying cryptocurrency. Depending on the direction of the funding rate (positive or negative), users may be required to pay or receive funding on their open positions at regular intervals. Failing to understand and account for funding rate payments can lead to unexpected costs or losses.
Other derivative products may have their own specific risks, such as contract expiration dates, settlement procedures, or underlying asset dependencies. Users should thoroughly research and understand the unique characteristics and risks of each product before trading.
Funding rate considerations for perpetual contracts
As mentioned earlier, perpetual futures contracts are subject to funding rate payments. Users should be aware of the potential impact of funding rates on their trading strategies and account equity.
If a user holds a long position (buying the contract) and the funding rate is positive, they will be required to pay the funding fee to short position holders. Conversely, if a user holds a short position (selling the contract) and the funding rate is negative, they will receive the funding fee from long position holders. The funding rate can change frequently based on market conditions and trading activity.
Users should monitor funding rates closely and factor them into their trading decisions and risk management strategies. Neglecting to account for funding rate payments can lead to reduced profits or increased losses over time.
Importance of understanding product specifications before trading
Before trading any cryptocurrency derivatives product on Solus platform, users should thoroughly review and understand the product specifications, contract terms, and associated risks. Each product may have different margin requirements, fee structures, trading hours, settlement procedures, and other unique features that can impact a user's trading experience and outcomes.
Users should familiarize themselves with the underlying assets, price determination mechanisms, and potential factors that could influence the value of the derivative contracts. They should also be aware of any product-specific risks, such as the risk of price slippage during periods of high volatility or low liquidity.
Solus provides detailed product information, specifications, and risk disclosures on its platform. However, it is the user’s responsibility to read, understand, and assess the suitability of each product for their individual trading objectives and risk tolerance. Users should never trade products they do not fully understand and should seek professional advice if necessary.
By using Solus platform and trading cryptocurrency derivatives, users acknowledge and accept the leverage and margin trading risks, as well as the product-specific risks associated with each derivative contract. Users are solely responsible for managing their positions, maintaining adequate margin, and understanding the implications of their trading decisions on their account equity and potential losses.
User Responsibility and Risk Assumption
Users’ responsibility to assess their own risk tolerance and suitability
Before engaging in cryptocurrency derivatives trading on Solus platform, users must carefully assess their own risk tolerance, financial situation, and investment objectives. Cryptocurrency trading and the use of derivative instruments involve a high degree of risk and may not be suitable for all users. It is crucial that users understand the potential for significant losses and only trade with funds they can afford to lose.
Users should honestly evaluate their level of experience, knowledge, and understanding of cryptocurrency markets and derivative products. They should also consider factors such as their income, net worth, and ability to bear potential losses without significant financial hardship. Users must determine whether the risks associated with trading on Solus platform align with their risk appetite and financial goals.
Solus does not provide personalized investment advice or recommendations, and it is the user’s sole responsibility to assess the suitability of cryptocurrency derivatives trading for their individual circumstances. Users should not engage in trading activities that exceed their risk tolerance or financial means.
Importance of independent research and seeking professional advice
Given the complex and dynamic nature of cryptocurrency markets and derivative products, users must conduct their own thorough research and analysis before trading on Solus platform. This research should include, but is not limited to, understanding the underlying assets, market trends, technical indicators, and fundamental factors that may impact the value of cryptocurrency derivatives.
Users should also familiarize themselves with the specific features, risks, and terms associated with each derivative product offered on Solus platform. They should review the contract specifications, margin requirements, fee structures, and settlement procedures to ensure a clear understanding of how these products work and the potential risks involved.
In addition to independent research, users are encouraged to seek professional advice from qualified financial, legal, and tax advisors before engaging in cryptocurrency derivatives trading. These professionals can help users assess the suitability of trading activities for their specific circumstances, understand the legal and regulatory implications, and develop appropriate risk management strategies.
Acknowledgment that use of Solus platform is at the user’s own risk
By using Solus platform and engaging in cryptocurrency derivatives trading, users acknowledge and accept that they are doing so at their own risk. Users understand that the cryptocurrency market is highly volatile and that the value of their investments may fluctuate significantly, potentially resulting in substantial losses.
Users also acknowledge that Solus platform is provided on an “as-is” and “as-available” basis, without any warranties or guarantees of uninterrupted service, availability, or suitability for any particular purpose. Solus does not guarantee the accuracy, timeliness, or completeness of any information provided on its platform and shall not be liable for any errors, omissions, or inaccuracies in such information.
Users assume full responsibility for their trading activities and the outcomes of their investment decisions. They understand that past performance is not indicative of future results and that the historical price movements of cryptocurrencies or their derivatives do not guarantee any future price appreciation or returns.
By using Solus platform, users agree to hold Solus harmless from any losses, damages, or liabilities arising from their trading activities or the use of the platform. Users acknowledge that they have read, understood, and accepted all the risks outlined in this risk warning statement and that they are solely responsible for their trading decisions and the consequences thereof.
Limitation of Liability
Solus limitation of liability for user losses or damages
To the fullest extent permitted by applicable law, Solus shall not be liable for any direct, indirect, incidental, consequential, or special damages arising from or in connection with the use of its platform or the user’s trading activities. This includes, but is not limited to, losses due to market volatility, technical glitches, network disruptions, unauthorized access to user accounts, or any other reason.
Solus shall not be responsible for any losses or damages incurred by users as a result of their own negligence, errors, or misconduct, such as sharing account credentials, falling victim to phishing scams, or violating the terms of service. Solus shall also not be liable for any losses or damages resulting from the actions of third parties, such as hacking attempts or fraudulent activities.
In no event shall Solus liability exceed the amount of funds deposited by the user on the platform, regardless of the cause or form of action. Users agree that Solus liability shall be limited to the maximum extent permitted by applicable law and that any claims or disputes arising from the use of the platform shall be resolved in accordance with the terms of service.
Users’ acknowledgment and acceptance of the risks outlined in the statement
By using Solus platform and engaging in cryptocurrency derivatives trading, users acknowledge that they have carefully read, understood, and accepted all the risks outlined in this risk warning statement. Users recognize that the risks described herein are not exhaustive and that other risks, whether known or unknown, may exist.
Users understand that trading cryptocurrency derivatives is a high-risk activity and that they may lose some or all of their invested capital. They acknowledge that Solus has provided this risk warning statement as a courtesy to inform users of the potential risks associated with trading on its platform, but that this statement does not constitute investment, financial, legal, or tax advice.
Users agree to assume full responsibility for assessing the risks associated with their trading activities and to make informed decisions based on their own judgment and analysis. They understand that Solus is not responsible for any losses or damages incurred as a result of their trading decisions or the use of the platform.
By accepting this risk warning statement, users release Solus from any and all liability for losses or damages arising from their use of the platform or their trading activities. Users acknowledge that they are trading at their own risk and that they will not hold Sol responsible for any adverse outcomes or financial losses.
In conclusion, users must carefully consider the risks outlined in this statement and assess their own suitability for cryptocurrency derivatives trading before using Solus platform. Users are solely responsible for their trading decisions and the associated risks, and they agree to hold Solus harmless from any losses or damages incurred as a result of their use of the platform. By engaging in trading activities on Solus platform, users acknowledge and accept the risks involved and agree to be bound by the terms of this risk warning statement
.