Risk disclosure

PET ROCK DIGITAL ASSET MANAGEMENT (PTY) LTD

Last update 08/09/2022

1. The definitions ascribed to terms in this Risk Disclosure are those defined in the Terms and Conditions listed on the Website from time to time.

1. YOU ACKNOWLEDGE AND AGREE THAT:

1.1. You use the Platform and invest Fiat Currency with Pet Rock of your own volition and at your own risk;
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1.2. Trading in cryptocurrency is regarded as being a high-risk activity

1.3. You have sufficient knowledge of cryptocurrencies to make an investment with Pet Rock, and understand that You are solely responsible for determining the nature, suitability, and appropriateness of the Service for You;

1.4. You have carefully assessed whether your financial situation and risk tolerance is suitable for buying, selling or trading cryptocurrency;

1.5. You have been free to get independent professional advice (including legal, financial and tax advice) about the nature and effect of these terms, trading in cryptocurrency, and the Service, and You have either taken that advice or have chosen not to do so;

1.6. Cryptocurrencies held by Pet Rock are commingled and You have no specific rights to any specific cryptocurrency held by Pet Rock investments (the ‘Funds’);

1.7.  Cryptocurrencies are not recognised as a legal tender, Pet Rock is not a bank or depository institution, and your Pet Rock investment is not a deposit and cryptocurrencies held by the Funds are not insured by any private or governmental insurance and are not covered by any compensation scheme;

1.8. You are aware that, while Pet Rock endeavours to align itself with industry best practices, regulation of cryptocurrencies differs from jurisdiction to jurisdiction. In South Africa, cryptocurrencies are subject to oversight by the Financial Sector Conduct Authority;

1.9. These Terms and your use of any of our Services do not create a fiduciary relationship between us and You; your Pet Rock investment is not a checking or savings account, and it is not covered by insurance against losses, Pet Rock may lend, sell, pledge, hypothecate, assign, invest, use, or otherwise dispose of assets and cryptocurrencies to counterparties or hold cryptocurrencies with counterparties, and we will use our best commercial and operational efforts to prevent losses, You are, however, exposed to the possibility of Pet Rock becoming unable to repay its obligations in part or in full, in which case your investment may be at risk;

1.10. There may be risks in addition to those listed below to investing cryptocurrencies that are not identified in this Risk Disclosure document.

2. COUNTERPARTY RISK

Pet Rock is dependent upon counterparties(including, but not limited to, cryptocurrency custodians, wallet providers and exchange) and businesses that operate outside of Pet Rock’s control that provide services to it. These counterparties are subject to cybersecurity risks, risks of fraud, loss of liquidity, and other operational difficulties which may adversely impact investments;

3. RISK OF UNINSURED LOSS

3.1. Cryptocurrencies are not usually backed by a central bank or a national, supra-national, or quasi-national organization, any hard assets, human capital, or other forms of credit; a cryptocurrency’s value is usually determined by (and fluctuates often, according to) supply and demand factors, the number of merchants that accept it, and the value that various market participants place on it;

3.2. In the event of Pet Rock's insolvency, investor claims to their contribution to the Funds are ranked behind other creditors of Pet Rock and Pet Rock’s assets may be inadequate to satisfy claims by investors;

4. RISKS RELATED TO INVESTMENT STRATEGY & PERSONNEL

4.1. The Funds’ investment strategies may not be successful and no assurance can be made that investors will receive profits on their investments;

4.2. Pet Rock is substantially dependent on the retention of key personnel, Pet Rock cannot guarantee that investments will not be adversely affected by any change in key personnel;

4.3. The Digital Asset market is inherently volatile and market stress is a risk to Fund performance;

4.4. New investment strategies and techniques employed may not be thoroughly tested in the market before being employed and may have operational or theoretical shortcomings which could result in unsuccessful trades and, ultimately, losses to the Funds. In addition, any new investment strategy or technique developed by any Fund may be more speculative than earlier investment strategies and techniques and may involve material and as-yet-unanticipated risks that could increase the risk to an investment in any fund.

5. RISKS RELATED TO MARKET VOLATILITY

5.1. Cryptocurrency markets are volatile and prices can fluctuate significantly, the volatility of the cryptocurrency market may result in total loss of investments;

5.2. Past investment results of Pet Rock (or investments otherwise made by the investment professionals of the Pet Rock) are not necessarily indicative of their future performance;

6. RISKS RELATED TO CYBERSECURITY

As part of its business, Pet Rock and its service providers process, store and transmit large amounts of electronic information, including information relating to the transactions of the investments and personally identifiable information of the investors. The systems used in the transmission of this information are subject to cybersecurity risks and, despite the implementation of reasonable measures to protect its systems, may also be susceptible to compromise. Breach of Pet Rock’s cybersecurity measures may adversely affect investments

7. RISKS RELATED TO VALUATION METHODS

The valuation of any asset or liability involves inherent uncertainty. The value of a Digital Asset determined in accordance with the method of valuation used by the Administrator (appointed by Pet Rock for the daily administration of the Funds) may differ materially from the value that could have been realized in an actual sale or transfer for a variety of reasons, including the timing of the transaction and liquidity in the market. Uncertainties as to the valuation of portfolio positions could have an impact on the net asset value of the Funds if the judgments of the FundManager regarding the appropriate valuation, where applicable, should prove to be incorrect.

8. RISKS RELATED TO REGULATION AND LEGAL CLAIMS

8.1. There is a risk that, with expanding regulation, the Funds may need to adapt to ensure compliance, which may pose a risk to the investment strategies and success of the Funds, the Funds could be adversely impacted if cryptocurrencies fail to expand into retail and commercial markets, especially if hindered by slow or insufficient regulation;

8.2. To the extent that the creation, use or circulation of cryptocurrencies, or a cryptocurrency network generally, violates any foreign or domestic statute or regulation, or government, quasi-government, or private individuals assert intellectual property claims against cryptocurrency network source code or related mathematical algorithms, the Funds could be adversely affected;

8.3. To the extent that any individual, institution, government or other authority asserts a claim of ownership or wrongful possession over the cryptocurrency in the custody of the Funds, the Funds could be adversely affected, regardless of the merit of such legal action, lack of confidence in cryptocurrencies and cryptocurrency networks may adversely affect investments in the Funds;