Before trading any crypto assets it is important to understand the risks. This overview summarizes certain risks associated with ADA.
The U.S. The Securities and Exchange Commission (SEC) has expressed an opinion about ADA, including an opinion that ADA itself is a security.See the SEC’sand as well as for more information.
Token Description & Project Background
Cardano is a multi-layered Proof-of-Stake blockchain run by a non-profit foundation made up of scientists from around the world, which includes the University of Edinburgh and the Institute of Technology in Tokyo, Japan.
Using a secure, proof-of-stake algorithm (named Ouroboros), Cardano eliminates the need for an energy-consuming protocol and claims to solve scalability issues.
Cardano has different layers to perform different functions. These include one for software applications (DApps). One for distributed computing, and, finally, one for financial transactions & settlements where Cardano’s currency ‘ADA’ is used to settle transactions.
Caradano was created by Charles Hoskinson in 2017 through his company IOHK. IOHK along with the Cardano Foundation and Emurgo developed the blockchain and act as stewards for its development.
Risks of ADA
Like an investment in other crypto assets, there are some general risks to investing in ADA. These include: (i) volatility risk and liquidity risk, (ii) short history risk, (iii) demand risk, (iv) forking risk, (v) code defects, (vi) regulatory risk, (vii) electronic trading risk, and (viii) cyber security risk. For additional information of these and other general risks associated with crypto assets and Uphold’s platform, please refer to thestatement.
In addition to these general risks, an investment in ADA is subject to the following specific risks:
- The Layer-1 space faces intense competition, with many claiming to solve the same issues of decentralization, scalability, speed, and cost-effectiveness. Any potential success associated with ADA will be heavily reliant on Cardano’s adoption by various enterprises, developers, and projects.
We emphasize that this Crypto Asset Statement is not an exhaustive description or summary of all risks associated with ADA . Investors should conduct their own research and perform their own assessment before trading any crypto asset to determine the appropriate level of risk for their personal circumstances.
The ADA community and IOHK, the Cardano Foundation and Emurgo are not under any legal or regulatory obligation to disclose material information to the public regarding its activities. Holders of ADA have no recourse to IOHK, the Cardano Foundation, Emurgo or Uphold if ADA declines in value for any reason.
Changes to applicable law may adversely affect the use, transfer, exchange, or value of any of your crypto assets, and such changes may be sudden and without notice.
Uphold’s Evaluation Process
Prior to listing ADA on the Uphold Platform, Uphold performed due diligence on ADA and determined that ADA is unlikely to be a security or derivative under relevant securities legislation. Uphold’s analysis including reviewing publicly available information on the following:
- The creation, governance, usage, and design of ADA, including ensuring the source code being open-source, audited and peer reviewed, security, and roadmap for growth in the developer community.
- The supply, demand, maturity, utility, and liquidity of ADA.
- Marketing materials put forward by the ADA social team including, Twitter, Medium blog, LinkedIn posts, Discord and Telegram channels.
- Material technical risks associated with ADA, including any code defects, security breaches and other threats concerning ADA and its supporting blockchain (such as the susceptibility to hacking and impact of forking), or the practices and protocols that apply to them.
- Legal and regulatory risks associated with ADA, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of ADA.
Uphold has prepared this Crypto Asset Statement based on publicly available information. Although Uphold has taken steps to obtain information from apparently reliable sources, information contained in this Crypto Asset Statement may be inaccurate, incomplete or out-of-date. This overview is a starting point for you to perform your own research prior to investing in a crypto asset.
Uphold users should read thestatement for additional discussion of general risks associated with crypto assets made available through the Uphold platform.
Canadian residents, please note that Uphold has filed an application for registration in certain Canadian jurisdictions but has not yet obtained registration. Until such time as Uphold obtains registration, Uphold has agreed to abide by the terms of an undertaking available at the following. Please also review the for additional discussion of general risks associated with the crypto assets made available through Uphold Platform. Please be aware that statutory rights of action for damages or rescission in section 130.1 of the Securities Act (Ontario) and, if applicable, similar statutory rights under securities legislation in the other provinces and territories of Canada do not apply in respect of this Crypto Asset Statement or other disclosures on the Uphold website and statement.
Last updated on June 2, 2023.
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