Before trading any crypto assets it is important to understand the risks. This overview summarizes certain risks associated with VET.
No securities regulatory authority has expressed an opinion about VET, including an opinion that VET itself is not a security and/or derivative.
Token Description & Project Background
VeChain (VET) is the native digital currency for the VeChain blockchain protocol, which is designed to be a smart-contract platform focused on enterprise supply chain management and Internet of Things (IoT) solutions.
Vechain was founded in 2015 by Sunny Lu and Jay Zhang as a private company. In 2017, the VEN token was distributed on the Ethereum blockchain to be later replaced by VET tokens upon the VeChainThor chain.
VET’s blockchain operates with a “proof-of-authority” consensus mechanism, unique from Bitcoin’s Proof-of-Work (PoW) and Ethereum’s Proof-of-Stake (PoS) system.
VET is primarily a governance token on the chain that votes on changes to the protocol.
Risks of VET
Like an investment in other crypto assets, there are some general risks to investing in VET. 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 VET is subject to the following specific risks:
- Any potential success associated with the VET tokens will be somewhat dependent on the extent to which the VeChain Protocol is adopted by enterprises.
- VeChain’s permissioned security framework in which only approved nodes can partake in the transaction validation process has been criticized by many as being inefficient.
- Some contend the VeChain Foundation, which has the ability to control monetary policy and other critical network functions, holds too much power over the protocol.
We emphasize that this Crypto Asset Statement is not an exhaustive description or summary of all risks associated with VET. 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 VET community and VeChain core team are not under any legal or regulatory obligation to disclose material information to the public regarding its activities. Holders of VET have no recourse to VeChain’s core team, developers, or Uphold if VET 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 VET on the Uphold Platform, Uphold performed due diligence on VET and determined that VET 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 VET, 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 VET.
- Marketing materials put forward by the VET social team including, Twitter, Medium blog, LinkedIn posts, Discord and Telegram channels.
- Material technical risks associated with VET, including any code defects, security breaches and other threats concerning VET 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 VET, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of VET.
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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