PURCHASER SHOULD CAREFULLY CONSIDER AND EVALUATE EACH OF THE FOLLOWING RISK FACTORS BEFORE DECIDING TO PARTICIPATE IN THE TOKEN CROWDSALE. PROSPECTIVE INVESTORS SHOULD GIVE CAREFUL CONSIDERATION TO THE FOLLOWING RISK FACTORS IN EVALUATING THE MERITS AND SUITABILITY OF AN INVESTMENT.
THE FOLLOWING DOES NOT PURPORT TO BE A COMPREHENSIVE SUMMARY OF ALL OF THE RISKS ASSOCIATED WITH AN INVESTMENT IN THE TOKEN. PROSPECTIVE INVESTORS SHOULD DISCUSS A POTENTIAL INVESTMENT WITH THEIR PROFESSIONAL ADVISORS. NO ONE SHOULD PURCHASE A TOKEN WHO IS NOT PREPARED TO LOSE THE ENTIRETY OF HIS, HER OR ITS INVESTMENT. CAPITALIZED TERMS USED BUT NOT DEFINED HEREIN SHALL HAVE THE MEANING ASCRIBED TO SUCH TERMS IN THE WHITE PAPER. BY PURCHASING, HOLDING AND USING TOKENS, PURCHASER EXPRESSLY ACKNOWLEDGES UNDERSTAND AND ASSUME THE FOLLOWING RISKS:
Hightly speculative investment risk
Cryptocurrencies transactions are highly speculative and highly risky, and present the risk of total loss of the invested capital. Moreover, the fact that there exists a certain opacity in the cryptocurrency market, as well as the fact that regulation to date is very limited if any means that there exists certain risks of manipulation with insider trading.
CryptocurrenciescandcTokens are subject to large price fluctuations in both directions. The amplitude of such fluctuations is difficult to predict.
Risks associated with development of new technology
The Platform will use a new technology. There are no guarantees that such technology will be bug-free or accepted by the marketplace. Thus, even should the 3WM Platform become operational, Tokens may be subject to the risk of theft, loss, malfunction, or reputational risk, any of which can significantly degrade the value of such instrument.
Risk associated with the Ethereum protocol
Tokens and the 3WM Platform are based on the Ethereum protocol, any malfunction, breakdown or abandonment of the Ethereum protocol may have a material adverse effect on the 3WM Platform or Tokens and their value. Moreover, advances in cryptography, or technical advances such as the development of quantum computing, could present risks to the Tokens and the Platform by rendering ineffective the cryptographic consensus mechanism that underpins the Ethereum protocol. Smart contract concepts, the underlying software application and software platform (i.e. the Ethereum blockchain) is still in an early development stage and unproven. There is no warranty or assurance that the process for creating Tokens will be uninterrupted or error-free and there is an inherent risk that the software could contain defects, weaknesses, vulnerabilities, viruses or bugs causing, amongst other things, the complete loss of Tokens.
Risk of dissolution of the company or platform
It is possible that, due to any number of reasons, including, but not limited to, an unfavourable fluctuation in the value of the 3WM token (or other cryptographic and fiat currencies), due to negative adoption of the 3WM Platform, the failure of commercial relationships, or intellectual property ownership challenges, the Platform may no longer be viable to operate and the Company may dissolve.
Any future regulation, whether Swiss or foreign, in the cryptocurrency market can lead to a limitation of the possibility to hold and/or exchange of cryptocurrencies which can have a significant impact on the price and liquidity of cryptocurrencies. The extent and type of the future changes in the regulatory environment as well as the impact of additional regulations are unknown and difficult to predict.
Risks related to market and other uncertain events
Cryptocurrency investments may suffer significant losses in case of disruption of conventional markets or markets of cryptocurrencies in general. Other more or less extraordinary and/or unpredictable events may cause a rupture with historical prices of some cryptocurrencies. Any failure of communications systems and disruption of the decentralized network also present a significant risk.
The purchaser is exposed to a counterparty risk when entering into a transaction with the Company. In particular, if the company is not able to meet its obligations. Moreover, the Company does business with a number of counterparties to source cryptocurrencies, respectively official currencies that are the subject of transactions with the Client. In this context, the Purchaser is exposed to the risks of failure including bankruptcy faced by a counterparty of the Company which may cause the impossibility for the Company to deliver cryptocurrencies and/or official currencies despite payment in advance from the Purchaser, being specified that the Contract between the Purchaser and the Company excludes any liability of the Company in case of the impossibility to deliver cryptocurrencies and/or official currency.
Risk of transactions related to the blockchain
Most cryptocurrencies are based on the technology of the Blockchain. This technology is not adapted to the increasingly high volume of transactions of certain cryptocurrencies. Thus, there is a high risk of delays or blockage in the execution of certain transactions.
Risks related to the private keys and cyber security
Anyone who holds a private key can thus dispose of it at his discretion. In this context, the theft, loss or hacking of private keys means the permanent loss of cryptocurrencies. Therefore, the Purchaser is well advised to (i) keep their private keys in a safe location, off line, and (ii) regularly update the security of his computer systems.
The Company utilizes a substantial amount of electronic information. This includes transaction information and sensitive personal information of the Purchasers. The service providers used by the Company, may also use, store, and transmit such information. The Company intends to implement detailed Cybersecurity policies and procedures and an incident response plan designed to protect such information and prevent data loss and security breaches. However, such measures cannot provide absolute security. Breach of the Company’s information systems may cause information relating to the transactions of the Company and sensitive.
Risk of alternative networks
It is possible that alternative networks could be established in an attempt to facilitate services. 3WM Platform may compete with these alternative networks, which could negatively impact the Platform the Token and its value.
Risk of hard fork and token swap
The 3WM Platform will need to go through substantial development works as part of which it may become the subject of significant conceptual, technical and commercial changes before release. As part of the development, an upgrade to the Token may be required (hard-fork of Token) or swap into a new one and if Purchaser decide not to participate in such event, Purchaser may no longer be able to use Purchaser’s Tokens and any non-upgraded Tokens may lose their functionality in full.
Risk of unsatisfaction of platform development
The 3WM Platform is currently under development and may undergo significant redesign prior to its launch. For a number of reasons, not all buyer expectations concerning the Platform or Token’s function may be met on the launch date, including changes in design, implementation and execution of the Platform. Moreover, the value of the 3WM Token is heavily correlated with the existence of 3WM Platform and network, which has not yet been implemented. In this perspective, 3WM Tokens may lose part or all of their value if the Platform and/or network is never fully developed.
There is no established practice regarding the taxation of gains on cryptocurrencies whether in Switzerland or abroad. Moreover, existing practices may fluctuate. It is the responsibility of the Client to seek relevant tax advice in order to measure the tax impact of contemplated transactions and comply with its tax obligations.
Cryptographic tokens such as 3WM Tokens are based on a young technology. In addition to the risks included in this section, there are other risks associated with Purchaser’s purchase, holding and use of 3WM Tokens, including those that the Company cannot anticipate.