Before trading any crypto assets it is important to understand the risks. This overview summarizes certain risks associated with FXS.
No securities regulatory authority has expressed an opinion about FXS, including an opinion that FXS itself is not a security and/or derivative.
Token Description & Project Background
Frax Finance provides decentralized stablecoins and infrastructure for stablecoins. The Frax Share Token (FXS) serves as the governance of the protocol. FXS holders have the ability to vote on and manage protocol parameters such as adjusting collateral in liquidity pools and protocol fees.
Sam Kazemian, an American software developer, conceived the concept of a fractional-algorithmic stablecoin in 2019 and founded Frax Finance. He graduated from the University of California, Los Angeles (UCLA) in 2016 and was a member of the UCLA Powerlifting team. The founding team also included engineers Travis Moore and Jason Huan.
FXS was not publicly sold, but in 2020, 12% of the token was distributed via private sale exclusively to accredited investors.
Risks of FXS
Like an investment in other crypto assets, there are some general risks to investing in FXS. 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 FXS is subject to the following specific risks:
- FXS 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 FXS token holders.
We emphasize that this Crypto Asset Statement is not an exhaustive description or summary of all risks associated with FXS. 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 FXS community and aforementioned founders are not under any legal or regulatory obligation to disclose material information to the public regarding its activities. Holders of FXS have no recourse to FXS community, founders, or Uphold if FXS 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 FXS on the Uphold Platform, Uphold performed due diligence on FXS and determined that FXS 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 FXS, 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 FXS.
- Any marketing materials put forward by the FXS social team including on, Twitter, Medium blog, LinkedIn posts, Discord and Telegram channels.
- Material technical risks associated with FXS, including any code defects, security breaches and other threats concerning FXS 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 FXS, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of FXS.
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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