WP FINAL 221018 SPREADS F - Flipbook - Page 1
Risk Factors
Contributors should make themselves aware of the many risk involved in the purchase, use and sale of
tokens and the token sale process. We have outlined below some of the material risks that are obvious to the
Company and persons involved in the Token Sale and Network project (including Released Parties):
Early Stage Technology
The Token will be used to develop a Network that is based on, or in some way involved with, distributed
ledger technologies (DLT). You understand and accept that the use of DLT tokenised stores of value is highly
experimental. Participation in the proposed Token Sale and Network project therefore represents a very high
risk to Contributors. Tokenise will invest in software and other technologies. In all cases these technologies and
businesses will still be in an early development stage and unproven, and there is an inherent risk that the software,
technologies and related businesses invested in by the Tokenise could be unfit for their intended purpose and/or
not have the value expected.
Cryptocurrency
The Token Issuing Entity may wish to store or convert cryptocurrency contributions into one or more Fiat
and/or alternative cryptocurrencies and there could be significant difficulties in making and managing such
cryptocurrencies and funds including those arising from the lack of ready convertibility between Fiat currencies,
cryptocurrencies and Tokens and the difficulty in being able to deal with such assets via traditional market
counterparties and intermediaries. If the value of cryptocurrencies fluctuates unfavourably during or after the
Token Sale, we may not be able to fund development, or may not be able to develop or maintain the Network
in the manner that is intended. In addition to the usual market forces, there are several potential events which
could exacerbate the risk of unfavourable fluctuation in the value of cryptocurrencies, including but not limited
to another DAO-like attack on the Ethereum network; or significant security incidents or market irregularities at
one or more of the major cryptocurrency exchanges.
You understand and accept that if your Wallet credentials are lost or stolen, the obtained Tokens associated
with the Contribution will be unrecoverable and will be permanently lost. A private key, or a combination of
private keys, is necessary to control and dispose of Tokens stored in your Wallet. Accordingly, loss of requisite
private key(s) associated with your Wallet will result in loss of such Tokens. Moreover, any third party that
gains access to such private key(s), including by gaining access to login credentials of a hosted Wallet service
you use, may be able to misappropriate your Tokens. Any errors or malfunctions caused by, or otherwise
related to, the Wallet you choose to receive and store Tokens, including your own failure to properly maintain
or use such Wallet, may also result in the loss of your Tokens. Your failure to precisely follow the procedures
set forth herein for buying and receiving Tokens, including, for instance, if you provide an incorrect Wallet
address, or provide an address that is not ERC-20 compatible, may result in the loss of your Tokens.
Cybercrime
The acquisition and management of cryptocurrencies and Tokens is inherently subject to the risk of cybercrime
that is difficult to manage and mitigate. This may result in concerted attempts, and even successful attempts,
to hack the Network, Token Sale process and the Sites and software and wallets used to manage contributions
received in respect of Tokens and other software or technology components and to defraud Contributors
and Tokenise. Tokenise and the Token Sale may be subject to unauthorised access, hacking and/or theft of
some cryptocurrency and Token assets and it may not be possible to successfully insure against the same at a
reasonable price or at all. We are not required to insure the assets of Tokenise and do not intend to insure the
same. Any unauthorised access or cybercrime may result in theft or loss or inability to access Contributions,
affecting the ability to issue Tokens and the value of Tokens, and may also affect the ability to develop and
launch the Network.
Failure or Abandonment
Many of the Network project technologies including the Token will, at least initially, be based on Ethereum protocols.
Any malfunction, breakdown, forking or abandonment of these protocols may have a materially adverse effect on
the Network or the Tokens. Moreover, advances in cryptography, or technical advances such as the development of
quantum computing, could present fundamental risks to the value of such protocols and the Network.
The Token Sale event itself or the Network project may be fully or partially abandoned or required to be restructured for a number of reasons or remain technologically or commercially unsuccessful, or be shut down
for many reasons including e.g., lack of interest from industry and/or the public, changes in law or regulatory
issues, lack of funding, lack of commercial success or prospects (e.g. caused by competing projects). There
is no assurance that any Tokens or rights to Tokens acquired by Contributors will have the value expected or
any value at the time of realisation. You therefore understand and accept that the Contribution and/or the
allocation, use and ownership of Tokens, carries significant risks that could lead to the Tokens being unusable
or valueless particularly as a means to exchange information and services with other Network participants.
Risk of software weaknesses
Regulatory risk
You understand and accept that the Network and the Tokens, the Contribution software and other involved
software and technology and technical concepts and theories are still in an early development stage and
unproven, and there is no warranty that the process for receiving, use and ownership of Tokens will be
uninterrupted or error-free and there is an inherent risk that the software, Network, Tokens and related
technologies and theories could contain weaknesses, vulnerabilities or bugs causing, inter alia, the partial or
complete loss of Tokens; inability to use Tokens; and/or lack of usefulness of Tokens.
You understand and accept that DLT and blockchain technology allows new forms of interaction and that it is
possible that certain jurisdictions will apply existing regulations on, or introduce new regulations addressing,
Blockchain technology-based applications, which may be contrary to the current setup of the Contribution
process and which may, inter alia, result in substantial modifications of the Network and Token utility including
potential loss of Tokens for the Contributor. There is a risk that the offer and/or use of the Tokens could be
prohibited under applicable securities law. The Company or any related entity may cease operations in a
jurisdiction in the event that regulatory actions, or changes to law or regulation, make it illegal to operate in
such jurisdiction and/or use the Tokens or make it commercially undesirable to obtain the necessary regulatory
approval(s) to operate in such jurisdiction.
Main Protocol
TK038 V001
Risk of loss of your credentials
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