Risk Disclosure

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General Risk Disclosure

ZENIT WORLD LTD - Last Update: May 2024

This General Risk Disclosure (‘Risk Disclosure’) governs how you may use the Zenit World platform (‘Platform’) and its functionalities, including, but not limited to, the website and application and any of its features and content to conduct any activities (‘Services’). This Risk Disclosure applies between Zenit World LTD (‘we’, ‘us’, ‘our’, ‘Zenit’) and you, the person accessing or using the Services (‘User’, ‘you’ or ‘your’). This Risk Disclosure provides you with information about the risks associated with using our Services. Please read this Risk Disclosure carefully to understand your responsibilities and the limitations of our Services.

Zenit World LTD is an entity regulated by the Mwali International Services Authority in Comoros Union, in accordance with the International Business Companies Act 2014 and the Brokerage Act 2013. We are duly authorized by our international brokerage and clearing house license to provide trading services and offer a variety of financial products, including but not limited to Foreign Exchanges (Forex) and virtual assets. These products may involve either ownership of the underlying asset or contracts for differences (‘CFDs’), which provide exposure to currencies, commodities, and indices without direct ownership of the underlying asset. It is important to note that any transactions facilitated by Zenit World LTD concerning stocks, Forex, or virtual assets, offering leverage, permitting entry into a ‘Short’ transaction, and/or involving copy trading, shall be deemed as CFD transactions.

These products entail significant risk and may not be suitable for a large number of Users; therefore, it is incumbent upon individuals to ensure that their chosen trades align with their individual circumstances. It is important to clarify that WE DO NOT OFFER ANY PERSONAL, FINANCIAL, OR INVESTMENT ADVICE, and this Risk Disclosure does not encompass all potential risks or their relevance to your circumstances. We do not assert that the services delineated herein are appropriate for you, nor do we guarantee the reliability, accuracy, or completeness of the information provided herein. The risks delineated in this document are not exhaustive and merely provide a general overview of the risks associated with trading virtual assets and derivatives. It is advisable not to deposit funds that you cannot afford to lose.

Users are advised to conduct their evaluation regarding the suitability of trading, based on their independent due diligence, research, individual experience, financial resources, and objectives. Additionally, it is emphasized that trading derivatives entails certain considerations and a notable degree of risk. Before committing to any specific type of trade, it is essential to fully understand the nature and risks inherent in that particular category. While it is not feasible to enumerate all potential risks, the following risks should be duly noted.

  1. Inherent Risks

By accessing or using our platform, you are voluntarily choosing to engage in sophisticated and risky asset transactions. You are further acknowledging that you are aware of the inherent risks associated with using cryptographic and blockchain-based systems including, but not limited to, risks of financial loss, technology glitches, and hacking. We work hard to provide extensive systems and security measures. Nonetheless, certain issues and risks are unavoidable, and if such issues or problems arise in connection with your use of our platform, including technical difficulties with depositing or trading assets, it may take days, weeks, or months to resolve, and some issues may not be resolved at all.

There is also an inherent risk in dealing with centralized exchanges such as the Zenit platform. When depositing funds into your account, custody passes to Zenit and is no longer fully in your control. This also makes it susceptible as a single point of failure.

2. Systematic Risk

Emerging market currencies are inherently more susceptible to systemic risks. You recognize that this circumstance may result in the potential for your capital to become inaccessible, and you may encounter challenges in exiting your position.

  1. Market Risks

The markets pertaining to virtual assets exhibit notable volatility influenced by various factors, including adoption rates, technological advancements, security considerations, and regulatory developments. Trading virtual assets entails substantial market risks and volatility in prices. Significant and abrupt fluctuations in value may occur, with changes in value transpiring swiftly and unpredictably. It is important to note that past performance does not reliably predict future performance. Therefore, the value of a trade and potential returns can decrease as well as increase, and there is no assurance of recouping the initial amount deposited on a particular trade. Furthermore, the costs and transaction speeds associated with cryptographic and blockchain-based systems are subject to variability and may experience sudden and significant increases at any given time.

  1. Blockchain Risks

Since blockchain is an independent public peer-to-peer network and is not controlled in any way or manner by Zenit, we shall not be responsible for any failure and/or mistake and/or error and/or breach which shall occur in blockchain or in any other networks in which the virtual assets are being issued and/or traded.

You will be bound and subject to any change and/or amendments in the blockchain system and subject to any applicable law that may apply to the blockchain. We make no representation or warranty of any kind, express or implied, statutory or otherwise, regarding the blockchain functionality nor for any breach of security in the blockchain technology.

  1. Virtual Assets Risk

Since virtual assets markets are decentralized and non-regulated, our virtual assets Trading Services are not governed by any specific regulatory framework. This means that there is no central bank that can take corrective measures to protect the value of virtual assets in a crisis, or issue more currency. Therefore, when Zenit Users use our virtual assets Trading Services, they will not benefit from the protections available to regulated centralized financial services. Virtual assets markets are determined by supply and demand, and market sentiment. The virtual assets market is a dynamic arena and its respective prices are often highly unpredictable and volatile. Virtual asset prices are usually not transparent, highly speculative, and susceptible to market manipulation. In the worst-case scenario, the product could be rendered worthless.

It is important to make a distinction between indicative prices which are displayed on charts, and negotiable prices which are displayed on our trading platform. Indicative quotes only indicate where the market is. Since virtual assets markets are decentralized, each market maker may quote slightly different prices. Therefore, any prices displayed on any chart made available by us or by a third party will only reflect “indicative” prices, and not necessarily actual “dealing” prices according to which trades can be executed.

It follows that you should not deal with virtual assets trading unless you have the necessary knowledge and expertise to understand these characteristics, and the financial stability to be able to mitigate your risk exposure. You should be aware that you may sustain a total loss of the funds in your account.

If the market moves against your position, we may ask you to provide a substantial amount of additional margin funds on short notice, to maintain your position. If you do not provide the required funds within the time frame required by us, your position may be liquidated at a loss, and you will be liable for any resulting deficit in your account. Under certain market conditions, you may find it difficult or impossible to liquidate a position. This can occur, for example, when the market reaches a daily price fluctuation limit (“limit move”) if there is insufficient liquidity in the market.

Newly issued virtual assets may carry additional risks you need to consider. Limited liquidity difficulties to trade the asset after you’ve bought it, or even an overvaluation. Zenit cannot control and/or influence these external market factors. Further, virtual assets are not regarded as legal tender in most countries and there is no guarantee that it will be accepted as legal tender.

  1. Operation of Virtual Assets Protocols

Zenit does not own or control the underlying software protocols that govern the operation of virtual assets available for trading on our platform. In general, the underlying protocols are open-source and anyone can use, copy, modify, and distribute them. Zenit makes no guarantee of their functionality, security, or availability. The underlying protocols are subject to sudden changes in operating rules (“Forks”), and such Forks may materially affect the value, function, and/or even the name of the virtual assets Zenit holds for your benefit. In the event of a Fork, Zenit may temporarily suspend the operations (with or without advance notice) and we may (i) configure or reconfigure its systems or (ii) decide not to support (or cease supporting) the Forked protocol entirely. Zenit may, but is not obligated to do so, adjust your account in respect of a Fork, depending on the circumstances of each event attributable to any specific virtual assets that you hold.

  1. Private Key Vulnerabilities

Virtual Assets are managed through distinct private keys connected to digital wallets. While public keys are revealed in transactions, the confidentiality of associated private keys is paramount to prevent unauthorized access. Loss or compromise of a private key without a backup renders access to the corresponding Virtual Assets unattainable, often irreversibly. This risk, exacerbated by diverse technological configurations and access protocols, can result in substantial losses should private keys be misplaced. Zenit has no liability or responsibility for your private keys; it is solely the responsibility of the User to remember their private key and their corresponding passphrase, as Zenit will not be able to help a User recover a lost or misplaced private key.

  1. CFDs

CFD stands for “Contracts For Difference,” meaning you are not buying the underlying asset, but rather purchasing a contract to settle the difference in the initial asking price and the end price of the asset. When trading CFDs, you generally trade on margin, which means you only have to deposit a small percentage of the overall value of your position. This is known as “Leverage”, and even small market movements may have a significant impact, negative or positive, on your trading account.

If the market moves against you, you may sustain a total loss greater than the funds allocated to a specific trade. You are responsible for all losses in your account up to the equity in your account.

Before deciding to trade on margin, you should carefully consider your objectives, level of experience, and risk appetite. CFDs involve greater risk than on-exchange products, as market liquidity cannot be guaranteed and it may be more difficult to liquidate an existing position. The prices and other conditions are set by us in accordance with our obligation to provide the Best Execution as set out in our Best Execution and Order Handling Policy, and to act reasonably, and in accordance with the applicable Terms and Conditions. The characteristics of our CFDs can vary substantially from the actual underlying market or instrument. Full details of all of our CFDs are set out on our website.

CFDs are complex instruments and come with a high risk of losing money rapidly due to the principle of leverage. Between 61%-81% of retail traders lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

CFDs are not suited to the long-term trader. If you hold a CFD open over a long period of time, the associated costs increase (such as overnight fees), and it may be more beneficial for you to buy the underlying asset instead in these circumstances.

  1. Position Monitoring

You should further ensure that you can monitor positions on your account at all times, as you are solely responsible for this. Zenit does not act as a broker, intermediary, agent, or advisor and has no fiduciary relationship or obligation to you in connection with any trades or other decisions or activities undertaken by you on our platform. We are not responsible for monitoring positions on your account, or for notifying you of any changes or fluctuations that occur. This is also the case even if our Services do include notifications for market changes and fluctuations, as technical issues can arise.

  1. Execution

Although Zenit’s trading platform is automated, and we give you the Best Execution available, it is possible that the market price could change between order placement and execution, and therefore we cannot guarantee that the price requested will be the same as the price at which the order is executed.

To limit losses, we highly recommend that you set ‘stop loss’ limits. Using a stop loss or trailing stop loss can limit the amount you may lose if the market moves against you. There are, however, circumstances in which a ‘stop loss’ limit is not fully effective — for example, where there are rapid price movements or market closures.

  1. Third-Party Risk

We may elect to execute any order and/or hold any fiat money and other assets via a third party. Please be aware that when utilizing third-party services such as payment providers, custodians, or banking partners, you may be subject to their respective terms and conditions. In such cases, we cannot be held responsible for any losses that may arise as a result of actions or events involving these third parties. It is important to review and understand the terms and conditions of any third-party services you engage with, as they will govern the relationship and potential liabilities between you and those entities.

Risk of Equity Issuer Bankruptcy: This risk arises from the potential insolvency of a liquidity provider, resulting in a substantial decline in the equity price, either upon insolvency or when the likelihood of insolvency is significant.

Delisting and/or unsupported assets: In the event that any assets subject to your order are delisted and/or trading in such assets is discontinued for any reason (“Delisting Event”), the relevant order will be promptly closed. Should Zenit receive notification that an asset held in your account is anticipated to be delisted, removed, or canceled from any exchanges, and we determine that trading in such assets is no longer feasible, we will endeavor to sell the assets on your behalf, at a time, price, and in a manner determined by us. We cannot be held liable for any losses resulting from Delisting Events, as they are beyond our control. It is advisable to exercise caution by remaining informed about relevant market developments concerning assets.

  1. Copy Trading

Zenit’s platform allows you to copy and mimic other traders’ portfolios. This is purely for informational purposes, and neither Zenit, nor any of our affiliates, or agents, provide financial advice or inducements. In deciding to copy a specific trader and/or follow a particular strategy, you must consider your circumstances, including financial commitments and risk appetite. Utilizing the Copy Trading feature is highly speculative, and does not guarantee gains, and you could sustain significant losses exceeding the amount deposited. The risks associated with Copy Trading include but are not limited to, automated trading execution, whereby the opening and closing of trades will happen in your account without your manual intervention. Zenit does not endorse any particular copy trader’s portfolio and will not advise you either way; it is your sole responsibility to carry out your own research and undertake due diligence, before decisions are made in respect of Copy Trading.

  1. Automated Trades and Online Risks

There are risks associated with the technology you use to connect to our platform including, but not limited to, software and hardware failure, and internet disconnection or connectivity issues. The result of any system failure may be that your order is either not executed according to your instructions, may be delayed, or is not executed at all.

You acknowledge that there are risks associated with utilizing an internet-based trading system including, but not limited to, the failure of hardware, software, connectivity, the risk of malicious software, the risk that third parties may obtain unauthorized access to information and/or assets (including your virtual assets) stored on your behalf, cyber attack, virtual assets network failure (such as blockchain), computer viruses, communication failures, disruptions, errors, distortions or delays you may experience when trading, howsoever caused.

You should also be aware that SMS and email services are vulnerable to spoofing and phishing attacks, and you should use care in reviewing messages purporting to originate from Zenit. Whilst we take precautions to ensure such risks are minimized, we cannot guarantee that our Services will be risk-free, and we will not be responsible for any breaches that may occur.

  1. Fees and Costs

We retain the right to modify our pricing, fees, and charges periodically. We advise You to stay informed about the applicable costs and charges to prevent any avoidable losses. Please be aware of all costs and charges that apply to you in your particular circumstances, as such costs and charges will affect your profitability.

  1. Information

Any opinions, news, research, analyses, charts, blogs, prices, or other trading information contained on our Platform, are provided as general market commentary and do not constitute professional advice. Zenit shall not be responsible for any loss arising from any trading decision based on any recommendation, forecast, or other information provided or procured via our Platform.

  1. Volatility and Performance

The pricing of Virtual Assets often lacks fundamental reasoning, leading to the potential for price volatility and unpredictability in their value relative to fiat currencies. Virtual Assets historically exhibit greater price volatility compared to fiat currencies, with limited or no tangible underlying assets for price reference. This absence of fundamental grounding allows for irrational and exaggerated fluctuations in price, as the valuation process is inherently speculative and uncertain. Past performance does not serve as a reliable indicator of future performance.

  1. Liquidity Risk

This risk manifests as an inability to execute the sale or purchase of a financial instrument at the desired price due to a substantial decrease in demand or supply for said instrument. Specifically, liquidity risk may arise when selling a considerable quantity of financial instruments, potentially resulting in a sharp decline in their value. It is important to recognize that financial instruments categorized as illiquid are prone to experiencing significant price fluctuations when substantial transactions occur.

  1. Currency Risk

The assets may be allocated to instruments denominated in various currencies, thereby exposing Users to currency exchange fluctuations and risk. These risks are heightened in emerging markets and manifest in potential losses stemming from fluctuations in currency valuations relative to one another.

  1. Extended-Hours Trading Risk

There is generally less trading volume during the extended hours’ market. Consequently, price movement can be more volatile and less representative of the broader market sentiment. Traders may experience some of the inherent risks listed below, but this list is by no means exhaustive:

19.1 Lower liquidity: There are typically fewer buyers and sellers during extended hours, which can result in less trading volume and wider bid-ask spreads. This might make it harder to execute trades at desirable prices.

19.2 Higher volatility: Lower liquidity can also lead to greater price volatility, with potentially rapid and significant price movement.

19.3 Increased competition: Extended-hours’ traders may also be competing against professional traders and institutional traders who have access to greater resources, including automated trades in high volume.

19.4 Risk of changing prices: The price of securities traded in extended hours may not reflect the prices either at the end of regular trading hours or at the opening. As a result, you may receive an inferior price when engaging in extended-hours trading than you would during regular trading hours.

19.5 Risk of announcements: Normally, issuers make news announcements that may affect the price of their securities after regular trading hours. Similarly, important financial information is frequently announced outside of regular trading hours. In extended-hours’ trading, these announcements may occur during trading and, if combined with lower liquidity and higher volatility, may cause an exaggerated and unsustainable effect on the price movement of a particular asset.

  1. Financial Crimes and Cyber Attacks

Cybercrime is a significant concern within the digital ecosystem due to its absence of traditional governance. Virtual Assets, being entirely digital in nature, are particularly susceptible to such threats. For instance, the decentralized nature of blockchain technology may increase the risk of cyberattacks. An example of this is a 51% attack, wherein any individual or group controlling more than 50% of the network's mining hash rate can compromise the integrity of the blockchain. Attackers with majority control can disrupt the recording of new blocks, manipulate payment history, and divert funds. Users are vulnerable to various forms of cyberattacks, including malware, fake or hijacked addresses, and other malicious activities associated with holding Virtual Assets. It is essential for users to exercise caution by safeguarding passwords, private keys, verifying addresses and URLs, and exercising diligence before downloading any software.

  1. Tax Risk

The taxation of virtual assets transactions is uncertain. Users are responsible for complying with the tax laws and regulations relevant to their circumstances, which may mandate regulatory filings. In certain jurisdictions profits in virtual assets trading are taxable as capital gains, therefore you are encouraged to seek any independent legal advice and/or professional and personal tax advice. In certain circumstances, Zenit may be required to withhold taxes applicable to your transaction or payments made or deemed made to you to the extent such withholding is required by applicable law.

  1. Regulatory and Legal Risks

Regulatory and legal risks associated with transactions conducted across various jurisdictions may expose you to additional uncertainties. These markets are subject to continuous and substantial regulatory modifications. Anticipating future statutory, administrative, or exchange alterations and their potential impact on outcomes is not possible to any degree of accuracy. It is essential to acknowledge that transfers of ownership of certain assets may be restricted in certain jurisdictions, and trading profits in many foreign countries are subject to currency, tax, export restrictions, and other regulatory constraints. Foreign regulations may not guarantee foreign traders' rights to repatriate profits, dividends, or capital upon liquidation. In emerging markets, governmental supervision and regulation of business, industry practices, stock exchanges, OTC markets, brokers, dealers, and issuers are typically less stringent compared to more established markets. In certain instances, laws and regulations governing financial assets may be nonexistent or subject to inconsistent, and conflicting, interpretation.

By creating a Zenit account and using our Platform, you acknowledge that you have read and understood this Risk Disclosure. You agree to accept all associated risks and take full responsibility for your actions (and omissions) whilst using our Platform. If you do not agree with this Risk Disclosure, please refrain from using our Services.

If you have any questions or concerns about this Risk Disclosure or any aspect of our Services, please contact us at info@zenit.world.

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