5. Risk Warning and Disclosures, Limitation of Liability, and No Warranties
You should read the following statements in detail before using any of the Services.
1. RISK WARNING ON DIGITAL PAYMENT TOKEN SERVICES:
The Monetary Authority of Singapore (“MAS”) requires us, XREX Pte. Ltd., to provide this risk warning to you as a customer of a digital payment token (“DPT”) service provider.
Before you:
(a) pay your DPT service provider any money or DPT; or
(b) pay a third party any money or DPT under an arrangement by your DPT service provider,
you should be aware of the following:
a. XREX Pte. Ltd., being your DPT service provider is licensed by MAS to provide DPT services. Please note that this does not mean you will be able to recover all the money or DPTs you paid to your DPT service provider or any other third party referred to above, if your DPT service provider’s or the third party’s business fails.
b. You should be aware that MAS does not supervise or regulate your DPT service provider for the provision of unregulated services. This includes any service of trading digital payment token derivatives such as futures. Please refer to Section 2.3.1 of the Guide to the Payment Services Act 2019 (“Guide”) (which can be found on the MAS website) for the types of payment services which are regulated under the Payment Services Act. Services which do not fall within the list of services in Section 2.3.1 of the Guide are unregulated services.
c. You should not transact in the DPT if you are not familiar with this DPT. This includes how the DPT is created, and how the DPT you intend to transact if transferred or held by your DPT service provider.
d. You should be aware that the value of DPT’s may fluctuate greatly. You should buy DPTs only if you are prepared to accept the risk of losing all of the money you put into such tokens.
e. You should be aware that your DPT service provider, as part of its licence to provide DPT services, may offer services related to DPTs which are promoted as having a stable value, commonly known as “stablecoin”.
2. RISK DISCLOSURES:
(1) INDUSTRY RISKS
The DPT industry represents a relatively new and rapidly changing industry, and its success is subject to a variety of factors that are difficult to evaluate. The slowing of the development or acceptance of DPTs may adversely affect the DPTs. The growth of the Virtual Asset Service Providers (“VASPs”) is also subject to a high degree of uncertainty. The factors affecting the sustainability of the DPT industry include:
continued worldwide growth in the adoption and use of DPTs;
government regulation of DPTs and their use, or restrictions on or regulation of access to and operation of VASPs;
the maintenance and development of the open-source software protocol;
changes in consumer demographics and public tastes and preferences;
the availability and popularity of other forms or methods of buying and selling goods and services, including new means of using fiat currencies and DPTs; and
general economic conditions and the regulatory environment relating to DPTs.
A decline in the popularity or acceptance of DPTs may harm the market price of the DPTs. There is no assurance that any VASPs (including XREX) necessary to accommodate the sale and transfer of the DPTs will continue in existence or grow. Furthermore, there is no assurance that the availability of and access to VASPs will not be negatively affected by government regulation or supply and demand of DPTs and/or other digital assets. DPTs are not considered legal tender and may not be backed by governments or other legal entities, or by commodities such as gold or silver, and are a unique kind of currency, backed by technology and trust. There is no central bank that are able to undertake corrective measures to protect the value of DPTs in a crisis, manage the demand or supply of DPTs or smoothen any fluctuations in the price or value of DPTs. Instead, DPTs are an autonomous and largely unregulated worldwide system of currency. XREX makes no representations, warranties or undertakings on whether any DPT will always be available to trade on the Site, and/or be supported by XREX. XREX may, in its sole and absolute discretion, delist any DPT.
(2) MARKET RISKS
The prices of DPTs have historically been subject to dramatic fluctuations and are highly volatile. Due to such price fluctuations, you may increase or lose value in the DPTs at any given moment. DPTs may even become worthless. You should not commit funds to trading in DPTs that you are not prepared to lose entirely. Several factors may influence the market price of the DPTs, including, but not limited to:
global DPTs supply and demand, which can be influenced by the growth of merchants’ and commercial businesses’ acceptance of DPTs as payment for goods and services, the security of DPTs and digital asset exchanges and digital wallets, and the regulatory restrictions on the use and trading of DPTs;
currency exchange rates, including the rates at which DPTs may be exchanged for fiat currencies;
interruptions in service from or failures of major blockchain exchanges on which the DPTs may be traded;
investment and trading activities of large purchasers, including private and registered funds, that may directly or indirectly invest in the DPTs;
monetary policies of governments, trade restrictions, currency devaluations and revaluations;
regulatory measures, if any, that affect the use of digital assets such as the DPTs; and
global or regional political, economic or financial events and situations.
Markets for DPTs have varying degrees of liquidity. Some DPTs are liquid while others may be illiquid. XREX does not guarantee that the markets for any DPT will be active and liquid, or that you would be able to buy or sell any DPT whenever you desire or at a favourable price. XREX does not guarantee any profit from trading in DPTs or any other activities associated with the Services.
(3) LEGAL AND REGULATORY RISKS
Government regulation and Applicable Laws. DPTs are a relatively new asset type and the continued popularity of and risks involving DPTs has attracted and will continue to attract regulatory scrutiny. Regulation of DPTs and VASPs is unsettled and rapidly evolving, and may severely impact the development and growth of this market and the secondary market for the DPTs. The application and interpretation of existing laws and regulations are largely untested and there is a lack of certainty as to how they will be applied. New laws and regulations may be promulgated in the future that apply to blockchain technology and DPTs, and related service providers, and no assurance can be given that any such changes will not adversely affect DPTs generally (including the use, transfer, exchange and value of DPTs) or the Services. Changes in Applicable Laws may affect the price, liquidity and/or tradability of DPTs, or the use of any Services. DPTs may decrease in value or lose all of its value due to such changes. Regulatory actions by governmental authorities could negatively impact DPTs in various ways, including a determination, whether retrospectively or prospectively, that DPTs are financial instruments requiring licensing or registration in certain jurisdictions. XREX may have to suspend, restrict or limit the trading of certain DPTs or the use of certain Services or disallow users to trade DPTs or use any of the Services based on their citizenship, residence or location if doing so is commercially unsustainable or is prohibited by any Applicable Laws. Changes to Applicable Laws could materially and adversely affect the price, liquidity and/or tradability of DPTs, or the use or availability of any Services. XREX has sole and absolute discretion to suspend or reject the execution of any of your instructions, suspend or cease support for any DPTs, or suspend or terminate your access to any accounts or Services, where any such action or inaction is, in XREX’s sole opinion, necessary to facilitate XREX's compliance with Applicable Laws.
(4) TECHNOLOGY AND RELATED RISKS
Technology risks. DPTs rely on various types of distributed ledger technology. Some of this technology is open-source software that is built upon experimental technology, namely blockchain. XREX does not own or control such technology. Risks arising from relying on such technology include the existence of technical flaws in the technology, targeting by malicious persons, changes in the consensus protocol or algorithms, decreased community or miner support, the existence or development of competing networks, platforms and assets, flaws in the scripting language, disputes between developers, miners and/or users and regulatory action. Such changes may materially affect the value, availability and functionality of the DPTs you store in your XREX Account. XREX does not control the timing and features of these changes and it is your duty to keep yourself updated of any potential or implemented changes to any DPTs or the technology and you must carefully consider publicly available information and information that may be provided by XREX in determining whether or not to continue to trade in the affected DPT. XREX reserves the right, in its sole discretion, to suspend or cease to support the transfer, storage or trading of any DPT in response to any technology changes. XREX may, but is not obligated to, make changes to your XREX Account in response to such changes. You may be unable to withdraw DPTs if XREX ceases to support transfer of any such DPTs as a result of these technology changes, which may result in the total loss of any such DPTs remaining in your account. XREX will not be liable for any Losses you may experience as a result. Network and other risks. The underlying protocols supporting the Services, and the smart contracts that underlie the DPTs may be subject to certain risks that are beyond our control, and which may result in events, such as (a) loss of control or ownership of your DPTs and (b) transaction records on the blockchain being altered, reversed or otherwise invalidated, whether by way of fraudulent acts or consensus. Transactions irreversible. Transactions involving DPTs on blockchain networks are generally irrevocable and irreversible. This means accidental or fraudulent transactions in respect of, or loss or theft of your DPTs may not be reversible. XREX will not be liable for any losses that you may experience in such a scenario. Loss of private key(s) is permanent and irreversible. A digital private key is required to access and trade your DPTs. The loss or theft of your private keys will permanently and irreversibly deny you access to your DPTs and hence, you may lose all value of your DPTs. XREX will not be liable for any losses that you may experience in such a scenario.
(5) CYBER-SECURITY, INTERNET AND RELATED RISKS
Cyber-attacks and other criminal activities. Cyber-attacks may take different forms, including (but is not limited to) distributed denial of service, computer viruses, spyware, scareware, Trojan horses, worms, malware, double-spending, majority-mining, consensus-based or other mining attacks, misinformation campaigns and spoofing, communication failures and disruptions, which may affect the features, functions, operation, use, access or other properties of the Services and your XREX Account(s). The Services and your accounts may also be exploited for vulnerabilities in smart contracts and other code, as well as to human error. Any such cybersecurity failures or breaches, whether involving the Site or third-party service providers, could have a negative impact on the price, liquidity and/or tradability of DPTs, or the use of any Services. Cryptographic advancements. Developments in cryptographic technologies and techniques, including (but not limited to) the advancement of artificial intelligence and/or quantum computing, pose security risks to all cryptography-based systems including the Services, the network infrastructure and your DPTs. These ill-intended use of these advancements may result in theft, loss, disappearance, destruction, devaluation or other compromises of your XREX Account(s) and Funds. Reliance on the internet. Transactions rely heavily on the internet and other technologies. However, the public nature of the internet means that either parts of the internet or the entire internet may be unreliable or unavailable at any given time. Further, interruption, delay, corruption or loss of data, the loss of confidentiality in the transmission of data, or the transmission of malware may occur when transmitting data via the internet and/or other technologies. Unauthorised access. Any information (including any document) transmitted, or communication or transactions made, over the internet or through other electronic media (including electronic devices, services of third party telecommunication service providers such as mobile phones or other handheld trading devices or interactive voice response systems) may be subject to interruption, transmission blackout, delayed transmission due to data volume, internet traffic, market volatility or incorrect data transmission (including incorrect price quotation) or stoppage of price data feed due to the public nature of the internet or other electronic media. Any DPT may be lost forever if it is sent to the wrong address, such as improper address format and erroneous wallet address. Operational issues. Any technological difficulties could prevent your access to your XREX Account or use of the DPTs stored in your XREX Account. For instance, you may be prevented from sending an instruction or initiating a transaction and you may not be able to deposit, withdraw or transfer your DPTs instantaneously. XREX shall not be liable for any losses suffered from any price movements of the DPTs during this period of time. XREX makes no representation, warranty or undertaking of any kind, express or implied, statutory or otherwise, regarding any of its technology or blockchain functionalities. XREX does not guarantee the functionality or security of any DPTs or their underlying technology. You acknowledge and accept the risk of any changes or breach of security to the Services, its underlying technology and to the Funds in your XREX Wallet and/or XREX Account(s). You further acknowledge and accept that XREX does not control Internet signal power, its reception or routing, configuration of your equipment or its reliability, and that XREX shall not be responsible for any communication failures, disruptions, errors, distortions or delays you may experience when using the Services, however caused.
(6) THIRD-PARTY RISKS
There is no guarantee that any person or business who currently accepts DPTs as payment will continue to do so in the future. XREX has no control over, and assumes no liability, for the delivery, quality, safety, legality or any aspect of any DPT that you may receive from or transfer to, any third party.
(7) COMMUNICATION RISKS
There is a risk that you may suffer Losses arising from or in connection with XREX accepting and acting on any instructions over the Site, XREX Pay and/or any other channel, platform or communication service which appears to XREX to be from you and which turns out to have been forged, fraudulent or unauthorised and/or any miscommunication, communication breakdown, forgery, delay, mutilation or duplication in connection with the transmission of any instructions to XREX.
(8) CONFLICTS OF INTEREST RISKS
Actual, potential and/or perceived conflicts of interest may arise while providing the Services to you. For instance, conflicts of interest may arise between our personnel responsible and accountable for safeguarding your DPTs, and those personnel who make investment, trading or other discretionary decisions on your behalf. If such risks are not mitigated, there may be a risk of misuse of your DPTs. To mitigate such risks, XREX has implemented the following measures:
XREX will ensure the segregation of duties to guard against the risk of unauthorised transactions;
XREX will implement controls and clear reporting lines for such personnel responsible for safeguarding your DPTs to a senior manager who is resident in Singapore and is independent from trading and commercial decisions; and
XREX will provide for different personnel to hold the digital keys and no single employee would be able to solely authorise and effect the disposition, transfer or withdrawal of your DPTs.
In determining prospective DPTs which we intend to support on our Site, conflicts of interest may arise if we support DPTs that are issued by us or our related corporations or if we receive incentives to support certain DPTs. Please refer to our Statement on Listing of DPTs for more details on the potential conflicts of interest and the mitigating measures. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, YOU ACKNOWLEDGE THAT, BY ACCESSING AND USING THE SERVICES YOU ARE ENGAGING IN FUNDAMENTALLY RISKY TRANSACTIONS INVOLVING SOPHISTICATED INSTRUMENTS. DPTS ARE HIGHLY VOLATILE INSTRUMENTS AND CAN RAPIDLY AND UNEXPECTEDLY DECREASE IN VALUE. TRANSACTING IN DPTS ALSO REQUIRES A CERTAIN LEVEL OF TECHNICAL KNOWLEDGE AND UNDERSTANDING WITHOUT WHICH USERS MAY LOSE THE VALUE OF, OR ACCESS TO, SOME OR ALL OF THEIR DPTS. BY ACCESSING THE SERVICES YOU AGREE THAT YOU ARE VOLUNTARILY ENGAGING IN INHERENTLY RISKY TRANSACTIONS AND THAT YOU ARE AWARE OF THE RISKS INVOLVED INCLUDING BUT NOT LIMITED TO, RISKS OF FINANCIAL LOSS, LOSS OF ACCESS TO DPTS AND FIAT CURRENCIES DUE TO TECHNICAL ERRORS, SYSTEM DOWNTIME, SOFTWARE FLAWS AND CYBER-HACKS WHICH COMPROMISE THE SECURITY OF OUR SERVICES AND/OR YOUR OWN PERSONAL SYSTEMS.
3. LIMITATION OF LIABILITY
IN NO EVENT WILL THE LIABILITY OF XREX, THEIR RESPECTIVE AFFILIATES, AND THEIR RESPECTIVE SHAREHOLDERS, MEMBERS, DIRECTORS, OFFICERS, EMPLOYEES, ATTORNEYS, AGENTS, REPRESENTATIVES, SUPPLIERS, OR CONTRACTORS ARISING OUT OF OR IN CONNECTION WITH THE SITE, THE SERVICES, THE XREX MATERIALS, ANY PERFORMANCE OR NON-PERFORMANCE OF THE SERVICES, OR ANY OTHER PRODUCT, SERVICE OR OTHER ITEM PROVIDED BY OR ON BEHALF OF XREX, WHETHER UNDER CONTRACT, STATUTE, STRICT LIABILITY OR OTHER THEORY (INCLUDING, FOR AVOIDANCE OF DOUBT, ANY NEGLIGENCE OF XREX) EXCEED THE RELEVANT AMOUNT OF THE FEES PAID BY YOU TO XREX UNDER THIS AGREEMENT IN THE TWELVE-MONTH PERIOD IMMEDIATELY PRECEDING THE EVENT GIVING RISE TO THE CLAIM FOR LIABILITY, OR THE PERIOD OF DURATION OF THIS AGREEMENT BETWEEN YOU AND XREX, WHICHEVER IS SHORTER.
This Limitation of Liability shall apply to the fullest extent permitted by the Applicable Laws. The Limitation of Liability in this Section is subject to any obligations that we have under Applicable Laws, including our obligation to exercise reasonable care and skill in our provision of the Services. Nothing in this Agreement shall limit our liability resulting from our fraud or fraudulent misrepresentation, gross negligence, deliberate misconduct, nor for death or personal injury resulting from our negligence.
4. No Warranties:
All services and products are provided on an “AS IS” and “AS AVAILABLE” basis. To the fullest extent permitted by the Applicable Laws, XREX disclaims any representations and warranties of any kind, whether express, implied, or statutory, including, but not limited to, the warranties of merchantability and fitness for any particular purpose.
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