1. General Risk Warning

Trading in digital assets, cryptocurrencies, and related financial instruments involves significant risk and may not be suitable for all investors. Snow Exchange (Company ID: 3-102-937380), operating in Costa Rica, is required to provide this risk disclosure to inform you of the potential risks involved in digital asset trading.

YOU COULD LOSE ALL OF YOUR INVESTED CAPITAL. Never invest more than you can afford to lose.

2. Market Risk

Digital asset markets are characterized by:

• Extreme Volatility: Prices can fluctuate dramatically within short periods
• 24/7 Trading: Markets operate continuously, leading to rapid price changes
• Limited Liquidity: Some assets may have limited trading volume
• Market Manipulation: Potential for coordinated efforts to influence prices
• No Circuit Breakers: Unlike traditional markets, there are no automatic trading halts

3. Technology Risk

Digital assets and blockchain technology involve inherent risks:

• Smart Contract Bugs: Programming errors can result in permanent loss of funds
• Network Congestion: High transaction volume may delay or prevent transactions
• Fork Risk: Blockchain splits can affect asset value and accessibility
• Private Key Loss: Lost private keys result in permanent loss of access to assets
• Cyber Attacks: Hacking attempts on exchanges, wallets, or individual accounts
• Technical Failures: Platform outages during critical market movements

4. Regulatory Risk

The regulatory environment for digital assets is evolving and uncertain:

• Changing Regulations: New laws may restrict or prohibit digital asset trading
• Jurisdictional Differences: Regulations vary significantly between countries
• Tax Implications: Complex and changing tax treatment of digital assets
• Compliance Costs: Regulatory compliance may increase trading costs
• Government Actions: Potential bans or restrictions on digital assets

5. Liquidity Risk

Digital asset markets may experience liquidity challenges:

• Limited Market Depth: Large orders may significantly impact prices
• Slippage: Executed prices may differ from expected prices
• Market Closures: Extreme volatility may lead to temporary trading suspensions
• Withdrawal Delays: High demand may cause delays in asset withdrawals

6. Counterparty Risk

Risks associated with using Snow Exchange's services:

• Platform Risk: Technical issues or business closure may affect access to funds
• Custodial Risk: Assets held on the platform are subject to exchange security
• Credit Risk: Risk of default by the exchange or its partners
• Operational Risk: Errors in trade execution or settlement

7. Leverage and Margin Trading Risks

If applicable to your trading activities:

• Amplified Losses: Leverage magnifies both profits and losses
• Margin Calls: You may be required to deposit additional funds
• Forced Liquidation: Positions may be automatically closed at a loss
• Interest Costs: Borrowing costs can erode profits

8. DeFi and Smart Contract Risks

When interacting with decentralized finance protocols:

• Smart Contract Vulnerabilities: Code exploits can result in total loss
• Impermanent Loss: Providing liquidity may result in losses compared to holding
• Protocol Risk: Changes to protocol parameters may affect returns
• Governance Risk: Token holder decisions may negatively impact your interests

9. Psychological and Emotional Risks

Trading can have psychological impacts:

• FOMO (Fear of Missing Out): May lead to impulsive trading decisions
• Stress and Anxiety: Market volatility can cause emotional distress
• Addiction Risk: Trading can become compulsive for some individuals
• Sleep and Health: 24/7 markets may disrupt normal life patterns

10. Specific Risks for Costa Rican Users

Additional considerations for users in Costa Rica:

• Currency Risk: Exchange rate fluctuations between CRC and digital assets
• Local Banking: Potential restrictions on cryptocurrency-related banking
• Tax Obligations: Compliance with Costa Rican tax laws on digital assets
• Internet Connectivity: Connection issues may prevent timely trading

11. Risk Mitigation Recommendations

To minimize risks, consider the following:

• Only invest amounts you can afford to lose completely
• Diversify your portfolio across different asset classes
• Use strong security practices, including two-factor authentication
• Keep the majority of your assets in secure, offline storage
• Stay informed about market developments and regulatory changes
• Consider dollar-cost averaging instead of lump-sum investments
• Set stop-loss orders to limit potential losses
• Seek professional financial advice if needed

12. No Investment Advice

Snow Exchange does not provide investment advice. All trading decisions are your responsibility. We strongly recommend that you:

• Conduct your own research before making investment decisions
• Understand the technology and fundamentals of assets you trade
• Consult with qualified financial advisors
• Consider your personal financial situation and risk tolerance