Risk Disclosure Statement

This Risk Disclosure Statement (“Statement”), provides you with information about some of the risks associated with Virtual Assets (VAs), access and use of the Services offered by Fuze. The information presented in this Statement is not comprehensive and you must make your own independent decision and should seek any advice that you consider necessary or desirable (including financial and/or legal advice) from independent advisers before you use any Services offered by Fuze. You use the Services at your own risk. Fuze may amend any portion of this Statement, at any time, without prior consent or notification by posting the revised version of the Statement with an updated revision date. Terms not otherwise defined in this Statement shall bear the same meanings attributed to them in the Terms of Service.

1. A. General Risks

   Virtual Assets (referred to as VA or VAs), more commonly also known as Digital Assets or Cryptocurrency is a digital representation of value that functions as a medium of exchange, a unit of account, or a store of value, but it does not have legal tender status. VA are sometimes exchanged for U.S. dollars or other currencies around the world, but they are not generally backed or supported by any government or central bank. VA's represent a speculative investment and involve a high degree of risk. You should have the financial ability, sophistication/experience and willingness to bear the risks of an investment. Their value is completely derived by market forces of supply and demand, and they are more volatile than traditional currencies. The value of a VA may be derived from the continued willingness of market participants to exchange fiat currency for VA, which may result in the potential for permanent and total loss of value of a particular VA should the market for that VA disappear. The volatility and unpredictability of the price of VA and the risk of marker manipulation relative to fiat currency may result in significant loss over a short period of time. VA trading is extremely risky and You should not deal in VAs unless you understand their nature and the extent of your exposure to risk.

2. B. Regulatory Risk

   The regulatory environment concerning VAs continues to develop. Legislative and regulatory changes or actions at the state, federal, or international level may adversely affect the use, transfer, exchange, and value of VAs or the Services. In addition, the VA markets and exchanges are not regulated with the same controls or customer protections available in other traditional forms of investment such as equity, option, futures, or foreign exchange investments.

   You understand that ultimately it is your responsibility to make sure that you comply with any and all local regulations, directives, restrictions and laws in your place(s) of residence before using our Services. We do not permit the use of our Services by Users from a jurisdiction in which the use of our Services is not permitted (Restricted Jurisdictions). We are not offering or soliciting the use of our Services to any person located in any Restricted Jurisdiction or any other jurisdiction in which the specific use of our Services is prohibited by applicable laws.

3. C. Operational Risk

   Transactions relating to VA's may not be private and may be recorded on public Distributed Ledger Technology. There can be no assurance that use of the Services will provide a positive return or profit, that significant losses will not be incurred, or that your objectives will be achieved. It is possible that you may lose a substantial proportion or all of your capital.

   We strongly request and recommend our clients to conduct extensive research into the legitimacy of each individual VA before investing. The features, functions, characteristics, operation, use and other properties of the specific VA may be complex, technical, or difficult to understand or evaluate. The VA may be vulnerable to attacks on the security, integrity or operation. Some VA transactions will be deemed to be made when recorded on a public ledger, which is not necessarily the date or time that a transaction may have been initiated.

   Any client money account maintained by Fuze may not be sufficient to cover all losses incurred by You. Any insurance maintained by Fuze for the benefit of its clients may not be sufficient to cover all losses incurred by clients. The nature of VA means that any technological difficulties experienced by Fuze may prevent the access of your VA.

4. D. Cyber Risk

   VA's may not always be transferable or transactions in VAs may be irreversible, and, accordingly, losses due to theft, fraudulent or accidental transactions may not be recoverable. The nature of digital currency may lead to an increased risk of fraud or cyber-attack. Any individual VA may change or otherwise cease to operate as expected due to changes made to its underlying technology, changes made using its underlying technology, or changes resulting from an attack. Malicious individuals, groups or organisations may attempt to interfere with the Platform in a variety of ways, including, but not limited to, malware attacks, denial of service attacks, coordinated attacks, account takeovers and submitting fake transactions (including spoofing) which could negatively affect the Services.

   You can take the following measures to protect your keys and/or seed phrases from misuse or unauthorised access:

   • Enable Two-Factor Authentication (2FA): This adds an extra layer of security by requiring a second verification step, such as a unique code sent to their mobile device.
   • Secure Storage of Keys and Seed Phrases: Clients should use offline or hardware wallets designed specifically for storing virtual assets. Additionally, keys should be saved offline and never revealed in plaintext to anyone, ideally keys should be stored in lockers.
   • Backup and Recovery: Keys and seed phrases should be regularly backed up. Clients should store backups in multiple secure locations, preferably encrypted and offline, to protect against physical loss or damage.
   • Monitor Account Activity: Encourage clients to monitor their account activity regularly and report any suspicious transactions or unauthorized access to the VASP immediately.

5. E. Liquidity Risk

   Virtual Assets may be riskier, less liquid, more volatile and more vulnerable to economic, political, market, industry, regulatory and other changes than other traditional asset and investment types. Under certain market conditions, you may find it difficult or impossible to liquidate a VA quickly at a reasonable price or you may be unable to liquidate at all.

6. F. No Insurance on Deposit

   There are no deposit protection schemes that are applicable to the Services and your Account balances are uninsured unless you specifically obtain third party private insurance with respect to them. Your Account balance is at risk of total loss, from, among others things, security breaches (whether in respect of your Account(s) specifically or the Services generally), electronic, technological or systems failures (including book- or record keeping errors), and insolvency or bankruptcy, or equivalent formal proceedings, in respect of the Company. It is your responsibility to ensure that you use the correct address for any deposit, withdrawal, or transfer, and that the address you use is a valid address for the VA that you intend to transfer and that the Company accepts to provide its Services. Any inaccuracy in a specified address, or in the VAs that you attempt to transfer between addresses, may result in total loss of the VAs concerned.

   We hold your assets in designated "client money accounts". These client money accounts are segregated from operational accounts and balances are maintained and reconciled against client liabilities at all times.

Virtual Assets Standards Policy

1. A. Scope

   This policy applies to all operational and supervisory functions within Fuze involved in the management and approval of VAs that Fuze provides Services in relation to. These functions include, but not limited to- Compliance, Risk Management, Legal and Operations. The policy's provisions extend to all employees, contractors, and stakeholders involved in virtual asset activities at Fuze.

2. B. Assessment of Each VA

   • Fuze shall provide its Services only in respect of VAs that have been approved by Fuze as per this Policy.
   • Before the approval of any VA in relation to which Fuze provides Services, Fuze shall undertake a due diligence exercise and assessment of the particular VA (“Assessment”) in accordance with the procedures set-out below.
   • The Assessment shall be in writing and the record for such Assessment shall be maintained for a period of 7 years.

3. C. Evaluation of VAs

   The Assessment of each VA as required under Section 3.2 above shall consider certain parameters including but not limited to:

   • Technology Evaluation: Security and Immutability of the VA and the underlying DLT Protocol - In order to ensure the VAs reliability, resilience, security, and capability to perform its intended functions, Fuze will undertake a comprehensive technology evaluation. This evaluation will include a due diligence of the underlying technical infrastructure, and protocols supporting the VAs. Fuze will assess factors such as system reliability, scalability, data integrity and network security. This assessment will also consider the VAs compatibility with industry standards and best practices.
   • Governance Evaluation - Fuze will conduct an evaluation of the governance structure of the VA to ensure transparency and accountability including mechanisms for addressing conflicts of interest. VASPs will also review the asset's governance policies, procedures, and guidelines to ensure they align with industry best practices and promote good governance principles.
   • Legal and Regulatory Compliance Evaluation - Fuze shall conduct an evaluation of the VAs legal and regulatory treatment and landscape. This evaluation shall encompass a due diligence of the VAs compliance with any applicable laws, regulatory treatment by the Virtual Asset Regulatory Authority, Dubai (VARA) and other appropriate authorities (including those outside of the Emirate of Dubai) and in particular whether the issuance of the VA has received any regulatory approvals from any regulatory authority within or outside the United Arab Emirates and whether a Virtual Asset is prohibited by VARA or any other appropriate authorities both inside or outside the UAE in jurisdictions in which Fuze will provide its services, or equivalent activities, in relation to such Virtual Asset. Fuze shall further evaluate whether the VA has any features which may materially affect Fuze's compliance with applicable laws, Regulations, Rules or Directives, including but not limited to those relating to AML/CFT, sanctions, securities, intellectual property.
   • Risk Management Evaluation - Fuze shall assess the VA's terms and conditions, market capitalisation, fully diluted value liquidity, whether such metrics have trended downwards over time and, if the VA represents rights to any other assets, the enforceability of such rights. It shall assess the VAs design, features and use cases, whether or not intended by the issuer or relevant developers and whether the VA may be susceptible to price manipulation for any reason. Fuze shall also consider the VAs future development [e.g. “roadmap”] as (and if) communicated by the issuer and/or relevant developers of the VA. This will help Fuze to implement relevant mitigations against the risks identified. Fuze shall consider the background of the VA's issuer including, but not limited to, the issuer's relevant experience in the VA sector and whether it has been subject to any investigations or claims in relation to fraud or deceit.

4. D. Policy Review and Update

   This Policy shall be reviewed at least once every Quarter to ensure it achieves its objectives.

Virtual Assets Offered

Asset name	First issued on	Market Cap	Current Circulating Supply	Largest Recent Price Reduction
Bitcoin (BTC)	03 Jan 2009	$584.80B	19,431,437 BTC	Nearly 70%. From $64,400(12th Nov 2021) to $18,948(17 June 2022)
Ethereum (ETH)	30 Jul 2015	$229.51B	120,200,000 ETH	Nearly 79%. From $4664.43(12th Nov 2021) to $993.64(17 June 2022)
Tether (USDT)	06 Oct 2014	$83.39B	-	USDT is pegged to the USD, hence its circulation supply is the same as its market cap. And price changes are more reflective of currency exchange rate changes.
Circle (USDC)	26 Sep 2018	$26.97B	-	USDC is pegged to the USD, hence its circulation supply is the same as its market cap. And price changes are more reflective of currency exchange rate changes.

Cyber Risk

If you share your private keys, you run the risk of losing all your Virtual Assets. Transactions in VAs may be irreversible, and, accordingly, losses due to theft, fraudulent or accidental transactions may not be recoverable and the consequences could be irreversible. The nature of digital currency may lead to an increased risk of fraud or cyber-attack. Any individual VA may change or otherwise cease to operate as expected due to changes made to its underlying technology, changes made using its underlying technology, or changes resulting from an attack. Malicious individuals, groups or organisations may attempt to interfere with the Platform in a variety of ways, including, but not limited to, malware attacks, denial of service attacks, coordinated attacks, account takeovers and submitting fake transactions (including spoofing) which could negatively affect the Services.

You can take the following measures to protect your keys and/or seed phrases from misuse or unauthorised access:

Order Routing Practices

Fuze works with multiple liquidity providers and get the quote for its customers based on several factors including but not limited to price, latency, previous data for fills, tokens, volatility. Fuze has partnerships with Cumberland and FalconX, besides other liquidity providers.

Virtual Asset Pricing

Fuze requests for quotes from liquidity providers. Once it receives quotes, it chooses a liquidity provider to which the order is routed. This automated choice is based on factors like latency, time for expiry of quotes, previous data for fills, tokens, volatility, and more. Fuze charges a markup on the quote received from the liquidity provider.

Whistleblower Policy

Fair Treatment of Client

Fuze's comprehensive internal controls and policies highlight its commitment to trust, integrity, and respect among its employees, customers, and stakeholders. In furtherance of its commitment to uphold fair treatment of all the stakeholders involved, including our customers, Fuze has policies around fair treatment of all stakeholders, including its clients, directors, officers, contractors, and employees (Covered Persons).

Fuze's Ethics and Conduct Policy (&lpos;Policy&rpos;) is a comprehensive document that outlines the guidelines and principles to be followed by all Covered Persons. The policy aims to establish and maintain high standards of ethical conduct in all business dealings and provides guidance on appropriate behavior in various situations.

The Code of Conduct section outlines the following key values that all Covered Persons should abide by:

Complaints

You can contact Fuze via channels like Slack or via designated personnel. Customers can also contact Fuze by emailing support@fuze.finance

Names of all Responsible Individuals

Mo Ali

CEO

Linkedin

Arpit Mehta

COO & CPO

Linkedin