Before trading any crypto assets it is important to understand the risks. This overview summarizes certain risks associated with UMA.
No securities regulatory authority has expressed an opinion about UMA, including an opinion that UMA itself is not a security and/or derivative.
Token Description & Project Background
Universal Market Access (UMA) is an Ethereum-based protocol that empowers individuals to access and create tokenized financial derivatives through self-executing agreements. By utilizing UMA, users can conveniently gain exposure to the price movements of various financial assets. They have the flexibility to go long or short on a wide range of financial instruments and cryptocurrencies that might otherwise be challenging to access on centralized exchanges or over-the-counter markets.
One notable achievement of the project was the launch of ETHBTC synthetic token, which tracks the price ratio between Ethereum and Bitcoin. This innovative solution allows users to profit from the relative performance of the two cryptocurrencies. If the price of BTC rises faster or falls slower than ETH, the value of the token will increase accordingly. Conversely, if the opposite scenario occurs, the token value will be affected in a similar manner.
UMA is the platform’s governance token. Token holders are able to vote on protocol parameters and influence the direction and development of the protocol. It was founded by Hart Lambur and Allison Lu, who had previously worked together at Goldman Sach. Lu serves as Vice President and Lambur worked as a government bond trader.
Risks of UMA
Like an investment in other crypto assets, there are some general risks to investing in UMA. 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 UMA is subject to the following specific risks:
- UMA operates using smart contracts, which have an association with vulnerabilities and security breaches. Despite undergoing successful audits by well-regarded third-party entities, it is essential to acknowledge the existence of inherent risks. Furthermore, the project’s future trajectory hinges on the decisions made by a global community of UMA token holders.
We emphasize that this Crypto Asset Statement is not an exhaustive description or summary of all risks associated with UMA. 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 UMA community and the aforementioned founders are not under any legal or regulatory obligation to disclose material information to the public regarding its activities. Holders of UMA have no recourse to UMA community, or Uphold if UMA 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 UMA on the Uphold Platform, Uphold performed due diligence on UMA and determined that UMA 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 UMA, including ensuring the source code is open-source, audited and peer reviewed, security, and roadmap for growth in the developer community.
- The supply, demand, maturity, utility, and liquidity of UMA.
- Any marketing materials put forward by the UMA social team including on, Twitter, Medium blog, LinkedIn posts, Discord and Telegram channels.
- Material technical risks associated with UMA, including any code defects, security breaches and other threats concerning UMA 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 UMA, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of UMA.
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 21, 2023.
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