Specific Risk Factors 

1. Market Risk and Extreme Volatility 

The value of crypto-assets is typically determined by supply and demand in open markets and may experience extreme volatility. Prices can rise or fall dramatically within short periods, including to zero. Past performance of any crypto-asset does not indicate future results. Investments in crypto-assets are only suitable for persons who can bear the loss of the entire invested capital and should not be entered into with the expectation of a stable source of income or guaranteed return. 

2. No Investor Compensation Scheme 

Be aware that crypto-assets are not covered by any deposit guarantee scheme or investor compensation scheme in the European Union or elsewhere. In the event of loss, there is no regulatory mechanism to compensate clients for losses arising from investments in or transactions with crypto-assets. 

3. Regulatory and Legal Risk 

The regulatory and legal framework for crypto-assets is evolving. Statutory or regulatory changes at EU or national level may have material effects on the value, usability or availability of crypto-assets and on the services provided by Validvent. Validvent is committed to operating in compliance with all applicable regulations but cannot guarantee that regulatory changes will not result in the limitation or termination of certain services. In particular, MiCAR and related technical standards are subject to ongoing development by European Securities and Markets Authority (ESMA) and European Banking Authority (EBA). 

4. Advisory Risk – Limitations of Crypto-Asset Advisory Services 

Validvent provides regulated crypto-asset advisory services pursuant to Art. 81 MiCAR. Advisory services are based on the information available at the time of the advice, including on-chain data, market analysis, and tax considerations. No advisory service can guarantee a specific outcome. Recommendations made by Validvent reflect a professional assessment at a given point in time and are subject to change as market conditions, regulatory requirements, or individual circumstances evolve. Clients remain solely responsible for their own investment decisions. 

5. Tax Risk 

The acquisition, holding, exchange, disposal or transfer of crypto-assets may trigger tax consequences under applicable national and international tax law. Tax laws governing crypto-assets are evolving and vary significantly between jurisdictions. Validvent, acting through its licensed tax advisors, provides crypto tax accounting and advisory services but cannot guarantee a specific tax outcome. Clients are advised to monitor changes in applicable tax law on an ongoing basis. Validvent’s licensed tax advisors are available to assist clients with crypto tax compliance as part of Validvent’s Crypto Tax Accounting services. It is the sole responsibility of the client to ensure compliance with all applicable taxobligations. 

6. Self-Custody Risk 

Validvent operates on the principle of self-custody: client assets remain in the client’s own hands using hardware wallets or other personal custody solutions. Validvent does not act as a custodian of client assets. The loss of private keys, seed phrases or access credentials will result in the permanent and irreversible loss of crypto-assets. Validvent cannot recover lost private keys or seed phrases under any circumstances. Clients are solely responsible for the safekeeping of their private keys and access credentials. 

7. Technology and Software Risk 

Blockchain technology, smart contracts, and associated software applications are complex and, in many cases, still in early development stages. There is an inherent risk that the underlying technology may contain weaknesses, vulnerabilities or bugs that could result in the complete loss of crypto-assets. Validvent has no control over the underlying blockchain protocols or third-party software and cannot be held liable for failures, exploits, or vulnerabilities in these systems. 

8. Cybersecurity and Internet Risk 

The use of digital platforms and the internet in connection with crypto-asset services carries inherent cybersecurity risks, including but not limited to phishing attacks, social engineering, malware, hacking, and unauthorised access to accounts and wallets. Clients are advised to use strong, unique passwords, hardware wallets, and multi-factor authentication wherever possible. Validvent will never ask clients for their private keys or seed phrases. 

9. Liquidity Risk 

Not all crypto-assets are liquid. There may be limited options to sell or exchange certain crypto-assets, particularly during periods of market volatility, low trading activity, or regulatory uncertainty. It is possible that a client may not be able to liquidate a position at a desired price or within a desired time frame. Clients should carefully consider their liquidity needs before investing in any crypto-asset. 

10. Counterparty Risk 

Where Validvent engages third-party service providers, exchanges, custodians, or other counterparties in connection with the provision of its services, Validvent has no control over the financial stability or operational continuity of such counterparties. In the event that a counterparty defaults or ceases operations, assets held directly by the client with or through such third parties may be lost in whole or in part. Clients should note that Validvent does not hold client assets and therefore any such loss would arise from the client’s direct relationship with the relevant third party. 

11. Digital Art and NFT Risk 

Validvent provides advisory and consultancy services in connection with digital art and non-fungible tokens (NFTs). The market for digital art and NFTs is highly speculative, illiquid, and subject to rapid changes in sentiment and value. The legal and regulatory framework for NFTs is evolving and uncertain. NFTs may carry intellectual property risks, platform dependency risks, and the risk of loss due to technical failure of the underlying blockchain or platform. Validvent’s advisory services in this area do not constitute a recommendation to purchase any specific digital artwork or NFT. 

12. Concentration and Correlation Risk 

Portfolios concentrated in a small number of crypto-assets, or in assets that are highly correlated, are exposed to greater volatility and risk of loss than diversified portfolios. Clients should be aware that even a diversified crypto portfolio may decline in value simultaneously due to broad market movements, regulatory events, or macroeconomic factors. 

13. Stablecoin and Collateralisation Risk 

Certain crypto-assets purport to maintain a stable value relative to a reference currency or asset (stablecoins). Validvent makes no representation as to the stability or soundness of any stablecoin or collateralised asset. The issuer of a stablecoin bears sole responsibility for its collateralisation and redemption obligations. Stablecoins may lose their peg and decline in value, including to zero, as demonstrated by historical market events.