Risk disclosure statement
This MKX risk disclosure statement sets out what can go wrong when you buy, hold, sell or send a virtual asset through MKX: the price can fall to nothing, a transfer cannot be reversed, MKX relies on outside providers, and no deposit protection mechanism covers your assets or your dirhams.
Risk warning Virtual Assets may lose their value in full or in part, and are subject to extreme volatility. The owner and/or investor in the Virtual Asset can lose all the money or other value they invest, and does not benefit from any form of financial protection.
Four risks in one screen
Last updated
- Price
- Can fall in full or in part, within hours
- Transfers
- Cannot be reversed once confirmed
- Custody
- Hosted wallet that relies on outside providers
- Protection
- No deposit protection mechanism
Not investment, legal or tax advice.
1. Summary in plain words
The VARA Marketing Regulations (Part I.C.3) require two statements wherever a virtual asset is marketed in the UAE or to people there. They read:
Virtual Assets may lose their value in full or in part, and are subject to extreme volatility.
The owner and/or investor in the Virtual Asset can lose all the money or other value they invest, and does not benefit from any form of financial protection.
MKX's own published statement says the same in fewer words: "Virtual Assets may lose their value in part or in full." The MKX terms add: "Clients' Virtual Assets and Fiat Assets are not covered by any deposit protection mechanism from MKX."
In plain words: use only money you can afford to lose.
2. Price and liquidity risk
The price of a virtual asset can move sharply within hours, and nothing sets a floor under it. An asset may also not be liquid: at times you may be unable to sell it quickly, or only at a price well away from the last one you saw.
The price shown before an order is not a promise. The note on MKX's converter reads: "This price is indicative and not a quotation as crypto prices fluctuate with market conditions." The final price and the fees appear on the trade execution screen. The charges are listed with the fees MKX charges.
3. Transfer and network risk
A transfer of a virtual asset is final once the network confirms it, even if it was sent in error or as a result of fraud. An asset sent to a wrong address, or on a network the receiving wallet does not support, can be lost for good. USDT alone is listed on five networks in the MKX Fee Schedule, so check the network as well as the address.
The MKX terms say that "Advanced Protocols", such as metacoins, colored coins, side chains and forked protocols, are not supported. A network can also slow down or stop, which delays deposits and withdrawals.
4. Custody and counterparty risk
The MKX wallet is a hosted wallet: the assets are held for you, and you rely on MKX and on the firms it uses. The terms name the "Wallet Custody Services Provider: Fireblocks", and MKX states that it "partners with Binance as its primary external liquidity provider". A failure, an outage or a dispute at any of these firms could delay your access to assets or change the price you receive.
Dirhams are held "in a designated safekeeping account with a regulated financial institution licensed in the UAE", which the terms do not name. Hacking, theft and the takeover of an account remain possible however an account is protected. What is published about storage is on the page about how MKX holds client assets.
Three checks before you send
The asset, the network and the address. If one is wrong, the transfer cannot be recalled.
5. Stablecoin risk
USDT and USDC are designed to track one US dollar. That is a target, not a certainty: either token can trade above or below a dollar, and its value rests on the issuer and the issuer's reserves. Tether, for example, says on its transparency page: "All Tether tokens are pegged at 1-to-1 with a matching fiat currency and are backed 100% by Tether's Reserves." That is the issuer's own statement, not an assurance from MKX. A stablecoin also carries every transfer and custody risk described above.
6. Fraud, legal and tax risk
Virtual assets attract fraud. Scams, impersonation, market manipulation and theft all occur, and money sent to a fraudster is rarely recovered.
Rules can change. MKX holds one licence, reference VL/25/04/001, for Broker-Dealer Services, and a change in the law or in the regulator's rules could alter or end a service. The record is on the page of licences and regulatory disclosures, and a guide explains what a VARA licence does and does not cover.
Tax on a gain depends on your own circumstances and on where you are resident. Nothing on this site is investment, legal or tax advice. Your account is governed by the terms and conditions of the MKX account, and wider background is in the MKX Learn hub.
About this page
A prototype summary. The binding text is the Risk Disclosure Statement that MKX publishes on mkx.ae. Where the two differ, the published statement applies.
See how client assets and dirhams are held
The security page sets out what MKX publishes about custody and client money, and what it does not.