Banxa is a financial technology platform. Banxa is not a bank / authorized deposit taking institution
Banxa is a financial technology platform. Banxa is not a bank / authorized deposit taking institution
To ensure that any financial promotions of cryptoassets are ‘fair, clear and not misleading and in accordance with the FCA Rules, Banxa will provide its customers with a due diligence summary of any cryptoasset that are promoted to UK customers.
The due diligence summary will inform customers of the risks associated with the cryptoasset(s).
The due diligence summary is not intended to be a substitute for any legal, tax or financial advice and you should obtain your own independent legal, tax, financial or other advice before deciding whether the purchase and/or sale of the cryptoasset is suitable to your unique circumstances. The tokens listed below are offered in the UK:
Over the years, Tether Limited’s transparency has been questioned due to the lack of regular and comprehensive audits of its reserve holdings. The company’s limited disclosure of its financial practices and reserve holdings has led to suspicions about the actual backing of USDT tokens and contributed to uncertainty within the crypto community. Without proper auditing, investors have limited visibility into the backing of USDT. If Tether Limited were to face financial difficulties, insolvency or have banking difficulties, there may be a liquidity risk associated with a lack of funds to redeem USDT tokens, potentially causing a loss in value for holders.
The stablecoin market has been subject to increased regulatory attention globally. Regulatory agencies are apprehensive that stablecoins such as USDT could affect financial stability and might be exploited for illegal purposes like money laundering and fraud. The simplicity of their use and ability to transcend borders contribute to these concerns. Regulatory actions could impact the operations and value of USDT.
While USDT is designed to maintain price stability, there could still be price fluctuations, especially if the underlying reserves are not as stable as expected or if market sentiment changes.
Like any blockchain-based asset, USDT could be vulnerable to technical risks, including hacks, smart contract vulnerabilities, and software bugs that could compromise the security and integrity of the stablecoin. These issues could lead to financial losses or a loss of confidence in USDT.
USDT faces competition from other stablecoins. A shift in preference towards alternative stablecoins could affect the demand for USDT.
Regulatory actions against Tether Limited could impact the issuance and operation of USDT.
The due diligence summary is not intended to be a substitute for any legal, tax or financial advice and you should obtain your own independent legal, tax, financial or other advice before deciding whether the purchase and/or sale of the cryptoasset is suitable to your unique circumstances.
Cryptoasset are known for their high price volatility. The value of ETH can fluctuate significantly in a short period depending the adoption or use cases of ETH and market sentiments regarding ETH, which could result in substantial gains or losses for investors.
The regulatory environment for cryptoassets is still evolving in many jurisdictions and can impact the price of ETH. If governments and regulatory bodies around the world start cracking down on cryptoassets and introducing stringent regulations, it could lead to a reduction in demand. Conversely, if governments and regulatory bodies start to embrace cryptoassets and blockchain technology, it could lead to increased adoption and demand for ETH.
Ethereum, like any complex software platform, can experience technical vulnerabilities, bugs, and security breaches. These issues could lead to financial losses or a loss of confidence in the platform and impact the value of ETH.
Ethereum faces competition from other blockchain platforms and cryptoassets that offer similar or improved features. The emergence of more advanced technologies could challenge Ethereum’s position and therefore the value of ETH.
Ethereum’s success relies on its adoption and usage within the broader cryptoasset and decentralised application ecosystem. If Ethereum fails to gain traction or loses popularity, it could impact the value of ETH.
Ethereum has experienced network congestion during periods of high demand, leading to increased transaction fees and slower processing times. The platform’s scalability challenges could affect user experience and consequently reduce demand for ETH.
Ethereum has undergone several hard forks in its history to implement protocol upgrades or address security issues. A hard fork is a significant change to the protocol or rules of a blockchain network that results in the creation of a new branch or version of the blockchain. This new branch is incompatible with the existing version, leading to a divergence in the blockchain’s history and functionality. A hard fork occurs when developers, miners, or participants in a blockchain network decide to make substantial changes to the rules governing the network’s operation. These forks can lead to chain splits and uncertainties about the future direction of the network, resulting in loss of confidence in the platform. As such, the value of ETH may be impacted.
Many projects and tokens are built on the Ethereum platform. The success or failure of these projects can impact Ethereum’s reputation and value.
The due diligence summary is not intended to be a substitute for any legal, tax or financial advice and you should obtain your own independent legal, tax, financial or other advice before deciding whether the purchase and/or sale of the cryptoasset is suitable to your unique circumstances.
Like all cryptoassets, BCH is known for its price volatility. Its value can fluctuate significantly over short periods, which can lead to substantial gains or losses for investors.
The regulatory environment for cryptoassets is still evolving, and changes in regulations can impact the use and value of BCH. Governments around the world are taking various approaches to cryptoasset regulation, which can create uncertainty.
The success of BCH depends on its adoption as a means of payment and store of value. If it fails to gain widespread acceptance, its value could be negatively affected.
While cryptoassets are generally considered secure due to blockchain technology, there is always a risk of security breaches, hacks, and vulnerabilities in the network or wallets. Changes or upgrades to the BCH protocol can also introduce technical risks, leading to forks or other issues and resulting in value of BCH. Further, the security of the BCH network relies on miners. If a single miner or group of miners gains a majority of the network’s hash rate, they could potentially manipulate the network.
BCH faces competition from other cryptoassets, including Bitcoin (BTC) and other Bitcoin forks. The cryptoasset market is highly competitive, and BCH must compete for users and use cases.
BCH may not have the same level of liquidity as larger cryptoassets like Bitcoin (BTC), which can make it more challenging to buy or sell large amounts without affecting the market price.
Cryptoasset markets are influenced by sentiment, news, and social media. Positive or negative sentiment can lead to rapid price movements.
While BCH was created to address scalability issues associated with Bitcoin, it still faces challenges in handling a high volume of transactions efficiently.
The due diligence summary is not intended to be a substitute for any legal, tax or financial advice and you should obtain your own independent legal, tax, financial or other advice before deciding whether the purchase and/or sale of the cryptoasset is suitable to your unique circumstances.
Bitcoin’s value can change rapidly, leading to significant price fluctuations. This volatility can result in substantial gains or losses for investors.
Bitcoin (BTC) operates in a regulatory grey area in many countries. Governments and regulatory bodies around the world continue to develop and assess appropriate approaches, legislative and regulatory frameworks to manage and mitigate the risks of cryptoassets, including BTC.
While the blockchain technology underlying Bitcoin is secure, vulnerabilities can emerge in specific implementations, posing risks to the network’s integrity and impacting the value of BTC. Additionally, bitcoin transactions are irreversible, making it a target for hacking and cyberattacks. Investors may lose their BTC permanently if their wallets are compromised since there is no central authority to help recover lost BTC.
The emergence of new cryptoassets and blockchain projects could divert attention and investment away from Bitcoin, reducing the value of BTC.
The due diligence summary is not intended to be a substitute for any legal, tax or financial advice and you should obtain your own independent legal, tax, financial or other advice before deciding whether the purchase and/or sale of the cryptoasset is suitable to your unique circumstances.
Like all cryptoassets, the value of BNB can be highly volatile. Its price can experience significant fluctuations in a short period, which could lead to potential gains or losses.
The regulatory environment for cryptoassets is still evolving. Changes in regulations or government actions could impact the use and value of BNB.
BNB’s value is closely tied to its adoption and usage within the Binance ecosystem. If Binance faces challenges or loses popularity, it could affect the demand for BNB.
The cryptoasset space is competitive, with many other projects vying for attention and market share. If a new project or technology gains more traction, it could affect BNB’s value.
Binance can experience technical vulnerabilities, bugs, and security breaches, which could impact the BNB’s functionality and value.
BNB’s value is closely linked to Binance’s success. Any negative developments related to Binance could have a direct impact on BNB’s value. Please note that regulators globally have flagged concerns about Binance on several occasions, and in particular UK consumers may wish to consult the FCA’s Consumer Warning here.
Unlike Bitcoin and Ethereum, the supply of BNB is not predetermined and Binance can control its supply. Binance has made adjustments to its tokenomics in the past. Changes in the way BNB is used or distributed could affect its value.
Cryptoasset markets can be susceptible to manipulation and pump-and-dump schemes, affecting the token’s price.
BNB’s liquidity, or how easily it can be bought or sold, could impact your ability to enter or exit the market quickly at a desired price.
The due diligence summary is not intended to be a substitute for any legal, tax or financial advice and you should obtain your own independent legal, tax, financial or other advice before deciding whether the purchase and/or sale of the cryptoasset is suitable to your unique circumstances.
The cryptoasset market, including POL, is known for its extreme price volatility. Prices can experience rapid and unpredictable fluctuations based on market perceptions, which could lead to significant gains or losses for investors.
The regulatory environment for cryptoassets is evolving, and changes in regulations could impact the legality and usage of POL. Regulatory actions could affect the value and availability of the token. Additionally, the lack of regulation in the cryptoasset space can expose investors to risks such as fraudulent projects, scams, and market manipulation.
POL’s technology, like any blockchain project, is subject to technical vulnerabilities, bugs, and cyber attacks. A security breach or a flaw in the code could compromise the network and affect the value of the token.
POL’s network relies on validators and participants to maintain its operations. If a significant number of validators go offline or the network experiences congestion, it could impact the performance and reliability of the platform.
The blockchain and cryptoasset space is competitive, with many projects offering similar solutions. POL faces competition from other scaling solutions, and if it fails to gain adoption, it could impact its value.
The success of POL depends on the ongoing development and adoption of its technology. Delays, changes in the project’s direction, or failure to meet milestones could impact the token’s value.
Cryptoasset markets can be susceptible to manipulation and pump-and-dump schemes, affecting the token’s price.
Liquidity refers to how easily an asset can be bought or sold without causing significant price changes. If POL has low liquidity, investors may face challenges when trying to buy or sell large amounts of the token.
The due diligence summary is not intended to be a substitute for any legal, tax or financial advice and you should obtain your own independent legal, tax, financial or other advice before deciding whether the purchase and/or sale of the cryptoasset is suitable to your unique circumstances.
Like all cryptoassets, XRP’s value can be highly volatile, leading to potential significant gains but also substantial losses for investors.
Changes in regulations or unfavorable legal decisions could impact the value and use of XRP. In addition, Ripple Labs has faced legal action from the U.S. SEC and was held to have breached securities regulations for initial sales of XRP, which could lead to potential fines or restrictions on XRP. This legal uncertainty can affect its market performance.
While XRP has partnerships with financial institutions, broader adoption is needed for sustained value. If adoption stalls, it could impact the token’s demand. Further, rapid changes in technology and advancements in the blockchain space could potentially render XRP’s use case less relevant over time.
XRP faces competition from other cryptoassets and blockchain projects offering similar cross-border payment solutions. Increased competition could affect its adoption and value.
Technical vulnerabilities or flaws in the XRP protocol could be exploited by malicious actors, leading to security breaches and loss of funds.
XRP’s value is closely tied to the success and actions of Ripple Labs, which may impact the token’s performance if the company faces challenges or changes its strategies.
Cryptoasset markets can be susceptible to manipulation and pump-and-dump schemes, affecting the token’s price.
While XRP is listed on various exchanges, liquidity can vary, making it difficult to buy or sell large amounts without impacting the price.
The due diligence summary is not intended to be a substitute for any legal, tax or financial advice and you should obtain your own independent legal, tax, financial or other advice before deciding whether the purchase and/or sale of the cryptoasset is suitable to your unique circumstances.
USDC’s value is backed by USD-denominated assets held by regulated financial institutions. If these institutions face financial difficulties or mismanagement, it could impact the stability of USDC and the ability to redeem it for USD.
Stablecoins like USDC are subject to regulatory scrutiny, and changes in regulations could impact their operation, value, and use. Regulatory changes may require the stablecoin issuer to modify its practices or even halt operations.
While USDC is designed to maintain price stability, there could still be price fluctuations, especially if the underlying reserves are not as stable as expected or if market sentiment changes.
USDC operates on several blockchains, which can be subject to technical vulnerabilities and attacks. Smart contract bugs or blockchain vulnerabilities could lead to loss of funds or instability in the stablecoin.
USDC faces competition from other stablecoins and digital currencies. Shifts in popularity or adoption of alternative stablecoins could impact the demand for USDC.
As Coinbase is one of the founding entities behind USDC, any regulatory actions or issues affecting Coinbase could indirectly impact USDC.
Although USDC aims to maintain a 1:1 peg with USD, market demand and liquidity can affect the ability to exchange USDC for USD at the expected value, especially during times of market stress.
The due diligence summary is not intended to be a substitute for any legal, tax or financial advice and you should obtain your own independent legal, tax, financial or other advice before deciding whether the purchase and/or sale of the cryptoasset is suitable to your unique circumstances.
Like all cryptoassets, Litecoin’s price can be extremely volatile, leading to significant gains or losses in a short period. Sudden price fluctuations can impact the value of an investor’s holdings.
The regulatory environment for cryptoassets is evolving and can impact their legality, use, and trading. Changes in regulations could affect the value and usability of Litecoin.
Litecoin competes with a plethora of other cryptoassets, including Bitcoin, Ethereum, and various altcoins. If another cryptoasset gains more traction or offers better features, it could lead to a decrease in demand for Litecoin.
Technological vulnerabilities, bugs, or hacks could compromise the security and functionality of the Litecoin network. Such incidents could lead to a loss of investor funds and a loss of confidence in the cryptoasset.
The success of Litecoin depends on its adoption for real-world use cases. If it fails to find meaningful applications, its value could be limited.
The direction and development of Litecoin depend on the decisions made by its development team and leadership. Any disputes or lack of development progress could impact the cryptoasset’s future prospects.
The value of Litecoin is influenced by market sentiment, media coverage, and public perception. Negative news or sentiment can lead to sudden drops in value.
During periods of high demand, the Litecoin network may experience congestion, leading to slower transaction processing times and higher fees.
In times of high market volatility or during market crashes, there could be liquidity issues that make it difficult to buy or sell Litecoin at desired prices.
The due diligence summary is not intended to be a substitute for any legal, tax or financial advice and you should obtain your own independent legal, tax, financial or other advice before deciding whether the purchase and/or sale of the cryptoasset is suitable to your unique circumstances.
Bitcoin’s value can change rapidly, leading to significant price fluctuations. This volatility can result in substantial gains or losses for investors.
Regulatory changes or uncertainties could impact the operation and legality of WBTC, potentially leading to restrictions, shutdowns, or legal issues.
WBTC requires custodians to hold and secure the underlying Bitcoin assets. If custodians experience security breaches or mismanagement, investors could lose their funds.
Users must trust the custodians and merchants involved in the minting and burning processes. If these parties fail to perform their roles or act maliciously, it could lead to losses for investors.
The value of WBTC can be influenced by market dynamics, including supply and demand, changes in the value of Bitcoin, and general market sentiment.
WBTC relies on cooperation between various blockchain networks and projects. If any of these components experience technical issues or incompatibilities, it could disrupt WBTC’s operation.
As WBTC operates at the intersection of different technologies (Bitcoin and Ethereum), technical challenges and updates in either blockchain could affect its functionality. In addition, WBTC relies on smart contracts to function. Any vulnerabilities or flaws in these contracts could lead to security breaches, hacks, or loss of funds.
The availability and liquidity of WBTC could fluctuate, affecting the ability to trade or redeem tokens for Bitcoin.
The due diligence summary is not intended to be a substitute for any legal, tax or financial advice and you should obtain your own independent legal, tax, financial or other advice before deciding whether the purchase and/or sale of the cryptoasset is suitable to your unique circumstances.
Cryptoassets including WAXP, are known for their high price volatility. The value of WAXP can experience significant fluctuations over short periods, which can lead to potential gains but also substantial losses for investors.
The regulatory landscape for cryptoassets is still evolving, and changes in regulations can impact the use and trading of WAXP. Regulatory developments could affect the value and legality of the token.
The success of WAXP relies on its adoption within the e-commerce and NFT markets. If the platform’s adoption doesn’t meet expectations, it could impact the demand and value of WAXP tokens.
The blockchain and cryptoasset space is highly competitive. WAXP competes with other platforms offering similar services and solutions. If a competitor gains more traction or offers better features, it could impact the demand for WAXP.
Like any blockchain technology, vulnerabilities and security breaches are possible. Smart contract bugs, hacking, and other technical issues could result in the loss of tokens or damage to the network.
The economic model of WAXP, including staking, voting, and rewards, can impact the token’s value. Changes to the tokenomics, such as inflation rates or reward distribution, could affect investor returns.
The security and efficiency of the WAX network are critical for its success. Technical glitches, network congestion, or other operational issues could affect the user experience and investor confidence.
The value of WAXP can be influenced by market sentiment and speculative trading. Positive or negative news, trends, or rumors can lead to rapid price changes.
Low trading volume and liquidity can make it challenging to buy or sell WAXP tokens without significantly impacting the market price.
The due diligence summary is not intended to be a substitute for any legal, tax or financial advice and you should obtain your own independent legal, tax, financial or other advice before deciding whether the purchase and/or sale of the cryptoasset is suitable to your unique circumstances.
Cryptoassets are known for their price volatility. The value of XLM can fluctuate significantly in a short period, leading to potential gains or losses for investors.
The regulatory environment for cryptoassets is still evolving. Changes in regulations or government policies could impact the use and value of XLM. Legal uncertainties can also affect its adoption and trading. Further, the decentralized nature of cryptoassets can also lead to a lack of consumer protections and recourse in case of disputes.
The success of XLM depends on its adoption and use cases. If the Stellar network and its technology don’t gain widespread adoption or face competition from other platforms, it could affect the value of XLM.
There are many other blockchain platforms and cryptoassets with similar goals and features. Competition within the industry could impact the growth and value of XLM.
Blockchain technology, including that of Stellar, is relatively new and can have technical vulnerabilities. Security breaches, software bugs, or hacking attacks could pose risks to the network and the value of XLM.
Cryptoasset prices can be influenced by investor sentiment, market trends, and social media activity. This can lead to sudden price changes based on perceptions rather than underlying fundamentals.
The success of XLM relies on continuous development and improvements to the Stellar network. Delays or failures in implementing upgrades could affect the value of XLM.
Cryptoasset markets can have periods of low liquidity, which may lead to difficulty in buying or selling XLM at desired prices.
The due diligence summary is not intended to be a substitute for any legal, tax or financial advice and you should obtain your own independent legal, tax, financial or other advice before deciding whether the purchase and/or sale of the cryptoasset is suitable to your unique circumstances.
Solana has faced criticism for a relatively high degree of centralisation, as a limited number of validators hold significant influence over the network’s operations.
The Solana network has experienced multiple outages due to high demand, raising concerns about its ability to handle peak loads without compromising performance or accessibility.
Solana competes with several high-speed blockchains, and shifts in user preference or technological advancement could affect Solana’s growth.
As a blockchain facilitating DeFi and other decentralized applications, Solana could be subject to regulatory scrutiny, which may impact its operations or value.
Given Solana’s unique Proof of History (PoH) mechanism and high-speed transaction handling, vulnerabilities or bugs in the protocol could expose users to risks, including potential financial loss.
The due diligence summary is not intended to be a substitute for any legal, tax or financial advice and you should obtain your own independent legal, tax, financial or other advice before deciding whether the purchase and/or sale of the cryptoasset is suitable to your unique circumstances.
Avalanche’s multi-chain architecture adds complexity, which could lead to operational or security challenges as the platform grows.
Although designed for high throughput, Avalanche may experience congestion as network use scales, potentially impacting transaction speed and costs.
As a blockchain supporting DeFi, Avalanche could face regulatory actions or scrutiny that may impact its ecosystem.
Avalanche competes with other high-speed blockchain platforms, and user preferences or technological advancements could influence its adoption.
Like other blockchains, Avalanche could be susceptible to technical risks such as bugs or vulnerabilities in its complex protocol, which may pose risks to AVAX holders.
The due diligence summary is not intended to be a substitute for any legal, tax or financial advice and you should obtain your own independent legal, tax, financial or other advice before deciding whether the purchase and/or sale of the cryptoasset is suitable to your unique circumstances.
Dogecoin has no supply cap, which can affect its long-term value and lead to concerns about inflation over time.
Dogecoin’s value is highly influenced by social media and public sentiment, making it more volatile and susceptible to speculative bubbles.
As a widely recognised but unconventional asset, Dogecoin could be impacted by regulatory actions targeting cryptocurrency in general.
Dogecoin’s older Proof of Work (PoW) based model may expose it to risks, such as high energy consumption and lower scalability, compared to newer blockchain models.
Development activity on Dogecoin has been intermittent, which may limit future innovation or responses to security vulnerabilities, posing potential risks to long-term users.
The due diligence summary is not intended to be a substitute for any legal, tax or financial advice and you should obtain your own independent legal, tax, financial or other advice before deciding whether the purchase and/or sale of the cryptoasset is suitable to your unique circumstances.