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Risk Disclosure

Bit Bank AG · Required reading before trading or investing
⚠️ IMPORTANT: Trading digital assets involves substantial risk of loss and is not suitable for every investor. The value of digital assets can fluctuate significantly and you may lose more than your initial investment, particularly when using leverage. Do not trade with funds you cannot afford to lose.

1. Market Risk

Digital asset markets are highly volatile. Prices can decline rapidly and without warning. Historical performance is not indicative of future results. The entire value of your investment may be lost.

2. Leverage Risk

Bit Bank offers futures trading with leverage up to 25x. Leveraged positions amplify both profits and losses. A 4% adverse price movement at 25x leverage will result in 100% loss of your margin (liquidation). You should fully understand margin, maintenance margin, and liquidation mechanics before trading futures.

3. Liquidation Risk

If your account equity falls below the maintenance margin requirement, your position will be automatically liquidated. Liquidation may occur at a price worse than the liquidation price due to market gaps and slippage. A 5% liquidation penalty applies to cover the Insurance Fund.

4. Smart Contract Risk

Our platform operates on smart contracts deployed on the XDC Network. Despite thorough auditing, smart contracts may contain undiscovered vulnerabilities that could result in loss of funds. The Insurance Fund provides partial coverage but is not a guarantee against all losses.

5. Oracle Risk

Synthetic asset prices are determined by external oracle feeds (Chainlink, RedStone). Oracle failures, manipulation, or delays could result in incorrect pricing, unexpected liquidations, or trading losses. In the event of confirmed oracle failure, Bit Bank may pause affected markets.

6. Liquidity Risk

Certain synthetic assets and futures markets may have limited liquidity. This can result in slippage (execution at a price different from expected), wider spreads, and difficulty closing positions. OTC desk services are available for large trades to minimise market impact.

7. Regulatory Risk

The regulatory environment for digital assets is evolving rapidly across jurisdictions. Changes in Swiss law, EU MiCA regulations, or other jurisdictions may affect the availability, legality, or taxation of our services. Bit Bank cannot guarantee that all services will remain available in all jurisdictions.

8. Custody Risk

While Bit Bank employs military-grade security (Thales HSM, MPC key sharding, Mount10 facility), no custody solution eliminates all risk. Potential risks include hardware failures, natural disasters beyond design parameters, and sophisticated cyber attacks. The Insurance Fund provides coverage up to its balance for eligible claims.

9. Precious Metals Risk

xGOLD and xSILVER are synthetic representations of precious metals prices. Physical redemption is subject to availability, verification, and additional fees. Metal prices fluctuate based on global supply and demand.

10. Fixed Income Risk

Tokenised bonds (xBonds) carry credit risk of the underlying issuer, interest rate risk, and liquidity risk in secondary markets. Swiss government bonds carry sovereign credit risk. Corporate bonds carry default risk.

11. Property Risk

Tokenised real estate (xProperty) is subject to property market fluctuations, vacancy risk, regulatory changes, and illiquidity. Rental income is not guaranteed.

12. Lending Risk

Lending and borrowing on the platform carries counterparty risk. Collateral values may decline below liquidation thresholds. Interest rates are variable and may change based on utilisation.

13. Privacy Technology Risk

ZK-SNARK cryptography is relatively new technology. While mathematically proven, implementation risks exist. Zero-knowledge proofs do not protect against user error (e.g., sharing private keys) or targeted regulatory action against privacy-preserving technologies.

14. Tax Obligations

You are solely responsible for determining and fulfilling your tax obligations in your jurisdiction. Bit Bank provides tax reporting tools for Swiss, EU, and UK jurisdictions but does not provide tax advice. Consult a qualified tax professional.

Acknowledgement: By using Bit Bank services, you confirm that you have read and understood this Risk Disclosure, that you are trading with funds you can afford to lose, and that you accept full responsibility for your investment decisions.

Questions about risk? Contact risk@bit-bank.io