Digital assets, also referred to as cryptocurrency, are a digital representation of value that function as a medium of exchange, a unit of account, or a store of value. Cryptocurrencies are not legal tender, are not backed by the government or a central bank and generally have no underlying assets, revenue stream, or other source of value tied to fiat currency or other assets. Their value is derived from market dynamics and has historically been more volatile relative to fiat currency and other assets. The unpredictability of the price of cryptocurrency relative to fiat currency may result in significant loss over a short period of time. The value of cryptocurrency may be derived from the continued willingness of market participants to exchange fiat currency for cryptocurrency, which may result in the potential for permanent and total loss of value of a particular cryptocurrency should the market for that cryptocurrency disappear. In certain cases, it may be difficult or impossible to liquidate a position quickly at a reasonable price due to various market factors, including illiquidity or actions by trading facilities.
Legislative and regulatory changes or actions at national or international level may adversely affect the use, transfer, exchange, and value of cryptocurrencies. Several agencies have also published advisory documents surrounding the risks of virtual currency. For more information see, the Financial Conduct Authority, European Banking Authority, CFPB’s Consumer Advisory, the CFTC’s Customer Advisory, the SEC’s Investor Alerts and FINRA’s Investor Alerts.
Some cryptocurrency transactions shall be deemed to be made when recorded on a public ledger, which is not necessarily the date or time that the customer initiates the transaction. Cryptocurrency ownership is often determined by a decentralized public ledger that associates an amount of cryptocurrency with a unique address defined by a public cryptographic key. A private cryptographic key is required to transfer cryptocurrency from one address to another. Anyone with access to the private key associated with the address can transfer the associated cryptocurrency. Cryptocurrency transfers generally cannot be cancelled or reversed and the identity of the holder of the private key associated with any address can be difficult, if not impossible, to ascertain. The nature of cryptocurrency may lead to an increased risk of fraud or cyber attack. If you are using cryptocurrency held on the Uphold platform to purchase goods or services, we have no visibility into the sellers and cannot control delivery, quality, safety, or legality. Losses due to fraudulent or accidental transactions may not be recoverable. If you have a dispute with sellers or buyers, you agree to deal directly with them and hold Uphold blameless in all disputes. The nature of cryptocurrency means that any technological difficulties experienced by Uphold may prevent the access or use of a user’s cryptocurrency.
