bStocks Risk Disclosure
This disclosure must be read together with the DigiFinex Terms of Use, TradFi Product Rules, Trading Rules, Fee Schedule, and the latest prospectus, product terms, and risk documents published by the issuer of bStocks. The risks described below are not exhaustive.
1. Product and Issuer
bStocks are tokenized securities issued by BTECH Holdings Ltd, a special purpose company established in the Abu Dhabi Global Market.
Each bStock is designed to provide economic exposure linked to a specified stock, ETF, or other underlying security. A bStock is not a direct share in the relevant listed company. DigiFinex is not the issuer of bStocks or of the underlying securities.
2. No Direct Share Ownership
Holding bStocks does not generally make you a registered shareholder or direct beneficial owner of the relevant listed company. Unless expressly stated otherwise in the applicable product documents, you normally do not receive:
• Direct voting rights in the underlying company;
• Registration on the company’s shareholder register;
• A direct right to claim dividends or distributions from the company;
• Shareholder meeting notices, corporate communications, or information rights;
• A direct claim against the residual assets of the underlying company upon liquidation.
There may be material differences between bStocks and shares held through a traditional broker, including differences in legal status, shareholder rights, taxation, corporate-action treatment, and investor protection.
3. Market Price and Liquidity Risk
The trading price of a bStock is determined by supply and demand, market-maker quotations, and available liquidity on the relevant trading venue. It is not guaranteed to remain equal to the price of the underlying security.
Price differences may arise from:
• Trading outside the regular hours of the underlying market;
• Insufficient market depth or wider bid-ask spreads;
• Market makers reducing or suspending quotations;
• Delayed prices, exchange rates, or reference data;
• Fees, taxes, withholding taxes, and settlement costs;
• Corporate actions, trading halts, delistings, or market disruption events;
• Token supply and demand, platform restrictions, or blockchain conditions.
During periods of limited liquidity or significant volatility, you may be unable to execute, close, or sell your position at the expected price and may lose your entire investment.
4. Collateral, Issuer, and Custody Risk
The issuer states that bStocks are supported by corresponding securities or other eligible assets, which may be held through brokers, custodians, banks, or other service providers.
Asset backing does not eliminate all risks. You may still be exposed to:
• Insolvency, financial distress, or operational failure of the issuer;
• Default by a broker, custodian, bank, or other counterparty;
• Errors in custody, reconciliation, settlement, or ownership records;
• Freezing, seizure, delayed return, or unavailability of supporting assets;
• Delayed, incomplete, or non-real-time collateral reports;
• Temporary timing differences between outstanding tokens and settled assets.
A special purpose company or asset-segregation structure does not guarantee immediate or full recovery if an insolvency, legal proceeding, regulatory intervention, or major operational event occurs.
5. Corporate Actions and Multiplier Adjustments
Dividends, stock splits, reverse splits, mergers, acquisitions, spin-offs, rights offerings, delistings, liquidations, and other corporate actions may be reflected through adjustments to a multiplier, token balance, reference price, or another mechanism.
Cash dividends may not be paid directly in cash. They may instead be reflected through reinvestment or multiplier adjustments after applicable withholding taxes, fees, and costs have been deducted.
As a result:
• The displayed balance may differ from the raw token amount recorded by the smart contract;
• Different wallets, blockchain explorers, and platforms may display different balances;
• The timing and economic result of a corporate action may differ from direct share ownership;
• Trading, deposits, withdrawals, conversions, or redemptions may be suspended or delayed;
• Rounding, taxes, fees, and operational restrictions may affect the final result.
6. Conversion and Redemption Risk
Certain service providers or issuer documents may provide a mechanism for converting bStocks into the underlying securities or redeeming the tokens. This does not mean that DigiFinex is required to provide or facilitate such services.
Conversion or redemption may be subject to:
• Identity verification and customer due diligence;
• Location and investor-eligibility requirements;
• Minimum or maximum amounts;
• Trading days, settlement cycles, and underlying-market availability;
• Availability of the underlying securities and liquidity;
• Fees, taxes, withholding taxes, and network charges;
• Sanctions, anti-money laundering, and other compliance reviews;
• The operational status of the issuer, broker, or platform.
You may be unable to convert or redeem at the desired time, and the amount received may be lower than expected.
7. Transfer Restrictions and Address Controls
On-chain transferability does not mean that bStocks may legally be transferred to every person or in every jurisdiction.
The issuer, DigiFinex, smart-contract administrator, or relevant service provider may restrict, delay, reject, freeze, or block an address, account, or transaction for legal, sanctions, product-eligibility, or risk-management reasons. Certain addresses may be blacklisted.
After withdrawing bStocks to an external wallet, you may be unable to redeposit, trade, convert, or redeem them. Losses caused by an incorrect address, unsupported network, or incompatible wallet may be irreversible.
8. Technology and Operational Risk
bStocks rely on smart contracts, blockchain networks, wallets, APIs, pricing data, trading venues, and other technology infrastructure.
Risks include:
• Smart-contract vulnerabilities, coding errors, or attacks;
• Network congestion, forks, block-production failures, or transaction reversals;
• Loss of private keys, wallet compromise, or unauthorized approvals;
• Incorrect or delayed market data;
• Platform downtime, matching-engine failures, or database errors;
• Delayed deposits, withdrawals, or settlement;
• Interruption or termination of third-party services.
9. Regulatory, Eligibility, and Tax Risk
bStocks may be classified as securities, tokenized securities, financial instruments, or other regulated products in different jurisdictions.
The products are not available to restricted persons or in restricted jurisdictions. Technical access to a DigiFinex feature does not mean that the activity is lawful in your jurisdiction.
You are responsible for determining whether you are eligible to trade, hold, transfer, or redeem bStocks and for any income tax, capital-gains tax, withholding tax, transaction tax, or other tax liability.
10. No Traditional Deposit or Securities Protection
Unless expressly provided under applicable law or the relevant product documents, bStocks are not bank deposits and generally are not protected by FDIC insurance, SIPC protection, deposit insurance, or other traditional securities-account protection.
11. Role of DigiFinex
DigiFinex provides relevant trading, custody, deposit, withdrawal, or technical services in accordance with its product rules. DigiFinex:
• Is not the issuer of the underlying company shares, bStocks, or the underlying securities;
• Does not control the issuer, broker, custodian, or underlying company;
• Does not guarantee that collateral information is current, complete, or enforceable;
• Does not guarantee liquidity, execution prices, conversion, or redemption;
• May adjust parameters, restrict services, suspend trading, or delist a product for legal, regulatory, risk-management, or operational reasons.
12. Acknowledgment and Acceptance
By trading or holding bStocks, you confirm that:
• You have read and understood the applicable issuer documents and this disclosure;
• You understand that bStocks are not direct shares;
• You may lose your entire investment;
• You have the necessary knowledge, experience, and risk tolerance;
• You satisfy all applicable legal and product-eligibility requirements;
• You accept all risks arising from trading, holding, transferring, and redeeming bStocks.
This document does not constitute investment, legal, or tax advice. You should consult an appropriately qualified independent adviser if you are uncertain whether the product is suitable for you.
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