Quantum Digital Assets
Risk Disclosures

Last Updated: April 19, 2022

Description of Services

QDA Ltd. (“Quantum”) provides a web-based, algorithmic trading service to accounts of individuals (each a “Client,” and collectively, “Clients”). Quantum charges a single monthly fee based on the profits of each Client’s account as reflected in the records of the digital asset exchange account (each, an “Exchange Account”) (i.e. Binance) used in connection with Quantum’s services. The service includes the provision of proprietary algorithmic trading strategies. (the “Service”). The services do not include investment advisory services, trade execution, settlement, clearance, custody, or reporting.

No Financial, Legal, or Tax Advice

None of the information or services made available by Quantum provides comprehensive financial or tax planning or legal advice, and Clients are advised to seek the advice and counsel of the Client’s own tax, financial, and legal advisers. Neither Quantum, nor any of its affiliates, is responsible for establishing or maintaining any Client’s compliance with the requirements of the Internal Revenue Code or determining any Client’s individual tax treatment regarding such account.

General Investment Risks

You are aware of and willing to assume the risks involved with using the Service. You understand that Quantum and its affiliates do not guarantee the future performance of your assets in the Exchange Account or any specific level of performance or the success of any algorithmic trading strategy. Further, you understand that you alone have the ability to control your Exchange Account and you are responsible for the success and overall management of your Exchange Account.

Your use of the Service should be actively monitored and is subject to various market, currency, economic, political and business risks. Your use of the Service will not always result in profitable outcomes and may result in substantial losses or a total loss of the funds in your Exchange Account.

Quantum does not make any guarantee that the investment objectives, expectations or targets described in connection with marketing or describing the Service will be achieved, including without limitation any risk control, risk management, or return objectives, expectations, or targets. Neither Quantum nor any of its affiliates guarantees the success of any given Service.

The Service does not constitute an investment program or investment advice and provides order management for highly speculative assets. Quantum has not undertaken a risk assessment with respect to your suitability to use the Service and does not recommend using the Service unless you are able to tolerate the loss of the entire value of your Exchange Account.

Algorithmic Trading Risks

You acknowledge that by signing up for the Service, you authorize Quantum to link certain trading strategies to your Exchange Account via API. You acknowledge that Quantum does not actively manage your account and the following actions or inaction by you may cause your Exchange Account to experience a substantial or total loss:

• Failure to maintain the minimum net balance required;
• Failure to disconnect the Service in times of drastic market downturns;
• Failure to pay your invoice issued by Quantum within three (3) days of issuance, which will cause Quantum to cease providing the Service without considering the risk of loss to to your Exchange Account; and
• Failure to maintain at least $10,500 USD in an Exchange Account using the Quantum Star service;
• Failure to maintain at least $5,500 USD in an Exchange Account using the Quantum Moon Service;
• Failure to actively monitor and close or open positions in your Exchange Account.

Futures Risks

By subscribing for our Quantum Moon service, you represent that you have read and understood the Ultimate Guide to Trading on Binance Futures. You further represent that you understand trading futures products involves leverage and can result in significant losses to your Exchange Account.

Fees

Quantum charges each Client a monthly fee equal to twenty percent (20%) of the net profits (the “Fee”) earned in each Client’s Exchange Account. The Fee is due and payable on or before the third day of each month following the month in which the Service is provided. If you fail to timely pay your Fee owed for any month, Quantum may cease providing the Service to you immediately and indefinitely.

Quantum in its sole discretion may from time to time offer lower fees through promotions, referrals and other discounts to some accounts that differ from the Fee stated above. Conversely, from time to time, Quantum may in its sole discretion also raise its Fee from time to time. Quantum will provide at least forty-five (45) days’ notice prior to the date on which any Fee increase will take effect.

Quantum is not responsible for any expenses or fees owed to or charged by the provider of the Exchange Account. Quantum is not affiliated with or associated with the provider of the Exchange Account.

External Compensation

Quantum may receive compensation from exchanges when a Client signs up for an Exchange Account using referral links provided by Quantum. Such compensation may take the form of a percentage of trading fees collected from Client by an exchange.

Exchange Account

Clients may deposit and withdraw from their Exchange Account at any time. Quantum cannot deposit or withdraw funds from your Exchange Account.

Market Risks and Risks of Other Risks of Using the Service

The Service includes proprietary trading strategies for trading various cryptocurrencies. The following risks summarize certain risks applicable to the Service, cryptocurrencies, and the cryptocurrency market in general. The risk factors described herein are not comprehensive and other risks may negatively impact your use of the Service.

Cryptocurrency Market Risks. The price of a cryptocurrency may drop in reaction to various events and conditions. This type of risk is caused by external factors independent of a cryptocurrency’s particular underlying circumstances. For example, macroeconomic environment, unpredictable market sentiment, forecasted or unforeseen economic developments, interest rates, regulatory changes, and domestic or foreign political, demographic, or social events. If an Exchange Account has a high allocation in a particular cryptocurrency, it may negatively affect overall performance of the Exchange Account.

Strategy Risk. There is no guarantee that the trading strategies that comprise the Service will be successful. Due to changes in volatility and market patterns, the anticipated profitability of the trading strategies offered through the Service may change from time to time. Quantum may, but is not required to, make changes to the Service and algorithms at any time.

Technology Risk. It is possible that Quantum or the exchange providing the Exchange Account may experience computer equipment failure, loss of internet access, viruses, or other events that may impair access to Quantum’s Service and trading strategies.

Volatility Risk. Cryptocurrency markets are extremely volatile. The trading strategies provided through the Service may perform differently than expected in volatile markets. Although the algorithms comprising the service have been back tested, there is no guarantee the algorithms will continue to perform profitably or as expected.

Liquidity Risk. Cryptocurrency markets can be illiquid and volatile. As a result, the Service may be unable to operate as intended in certain markets or under certain conditions, such as if a cryptocurrency is suspended, illiquid, or experiencing an extreme loss of value.

Third-Party Risk. In addition to the exchanges, Quantum relies on third-parties to deliver the Service, which, if such services fail or are interrupted, will adversely impact Quantum’s ability to deliver the Service and could result in substantial losses or a total loss of the funds in Clients’ Exchange Accounts.

Exchange and Custody Risk. Quantum does not offer trading execution or custody services. Quantum provides trading strategies that me subscribed for using technology provided by third-party exchanges. Quantum’s offering of the Service is not in affiliate with or an endorsement of such exchanges or their practices.

In addition, the cryptocurrency exchanges and other trading venues are relatively new and, in most cases, largely unregulated. They may therefore (i) be more exposed to fraud and failure than regulated exchanges for securities, derivatives, and fiat currencies and (ii) become subject to rules and regulations that prohibit the exchanges from listing the cryptocurrencies held by a Client in the future. Much of the daily trading volume of cryptocurrency is conducted on poorly capitalized, unregulated, unaudited, and unaccountable exchanges located outside of the U.S. that often do not have, or have limited, listing requirements. Such exchanges may engage in unethical practices that could adversely impact cryptocurrency pricing, such as front-running, wash trading, and trading with insufficient funds. To the extent that the cryptocurrency exchanges or are involved in fraud or experience security failures or other operational issues, this could result in a reduction in cryptocurrency market prices and adversely affect a Client’s investment in cryptocurrencies.

Network and Protocol Risk. The protocols on which cryptocurrencies are based are generally open-source software. When a modification is introduced and a substantial majority of users consent to the modification, the change is implemented and the cryptocurrency’s protocol and the network remains uninterrupted. It is possible that these protocols and modifications have undiscovered flaws which could result in the loss of some or all cryptocurrencies held your Exchange Account. There may also be network attacks against these protocols which may result in the loss of some or all cryptocurrencies held by your Exchange Account. Quantum does not guarantee the reliability or security of cryptocurrencies traded using the Service.

Hackers or other malicious groups or organizations may attempt to interfere with cryptocurrencies and networks in a variety of ways, including, but not limited to, malware attacks, denial of service attacks, consensus-based attacks, Sybil attacks, smurfing, and spoofing. Furthermore, because a cryptocurrency network is based on open-source software, there is a risk that a third party or a member of the development team of a particular cryptocurrency may intentionally or unintentionally introduce weaknesses into the core infrastructure of the cryptocurrency network, which could negatively affect the network and the value of the cryptocurrency.

Delisting Risk. The companies and individuals promoting, developing, or providing exchange services for cryptocurrencies may be subject to regulatory action. As such, exchanges may choose or be required to delist a cryptocurrency suddenly and without warning. In the event that the Client owns a cryptocurrency that is delisted, the Client may be unable to close a position in such cryptocurrency indefinitely or without transferring it to a different exchange on which the Service is not provided.

Dissolution of Network or Cryptocurrency Sponsor. It is possible that, due to any number of reasons, including, but not limited to, an unfavorable fluctuation in the value of a cryptocurrency (or other cryptographic and fiat currencies), decrease in a cryptocurrency’s utility, the failure of commercial relationships, the failure of the cryptocurrency sponsor or intellectual property ownership challenges, the cryptocurrency’s network may no longer be viable to operate. The dissolution of a cryptocurrency’s network or a sponsor (if applicable) may suddenly and adversely impact such cryptocurrency’s value.

Instability Risk. Cryptocurrencies are novel and speculative assets, and investments in them entail a high degree of risk. Several factors may affect the price of the cryptocurrencies, including, without limitation: (i) total cryptocurrencies in existence; (ii) global cryptocurrency supply and demand; (iii) expectations with respect to the rate of inflation of fiat currencies; (iv) currency- and cryptocurrency exchange rates; (v) interest rates; (vi) fiat currency withdrawal and deposit policies of the cryptocurrency exchanges; (vii) trade volume and liquidity on cryptocurrency exchanges; (viii) interruptions, suspensions, or terminations of major cryptocurrency exchanges; (ix) cyber theft of cryptocurrency from online cryptocurrency wallet providers, or news of such theft from such providers, or theft from individual cryptocurrency wallets; (x) investment and trading activities of hedge funds and other large cryptocurrency investors; (xi) sovereign monetary policies, trade restrictions, and inflation controls; (xii) regulatory measures that affect the usability of cryptocurrencies as a form of legal tender and/or otherwise restrict or facilitate cryptocurrency purchases, sales, or holdings; (xiii) availability and popularity of businesses that provide cryptocurrency-related services; (xiv) development and maintenance of open-source software protocols for cryptocurrency networks, applications or platforms; (xv) increased competition from other payment services; and (xvi) domestic and foreign political, economic, and financial events and/or uncertainty. If cryptocurrency markets continue to be subject to high volatility, Clients may experience losses based on their investments. Even if Clients are able to hold their cryptocurrencies for long, potentially indefinite periods, their cryptocurrencies may never generate a profit. Additionally, Clients should be aware that there is no assurance that the cryptocurrencies will maintain their long-term value in terms of future purchasing power.

Service Permissibility Risk. There is no guarantee that exchanges will permit the use of API keys or Quantum to provide its service to Clients. If Quantum is prohibited from offering its Service for any reason, Clients and the value of their Exchange Accounts may be adversely impacted.

High-Frequency Trading Risk. The Service implements high-frequency trading strategies, which may result in significant trading fees to the Client beyond those that would be incurred using buy-and hold or other investment strategies. The fees incurred by using the Service may reduce the profitability of the Service.

Regulatory Risks. Regulatory changes may affect the value of cryptocurrencies or Quantum’s ability to offer the Service. Regulation of crypto assets in the U.S. and in foreign jurisdictions is in its early stages of development and is subject to unpredictable changes which may have an adverse impact on the cryptocurrencies traded using the Service, the exchanges on which the Service can be offered, or Quantum’s offering of the Service in general. Such regulatory changes or actions may adversely impact the profitability of the Service or Quantum’s ability to offer the Service.

Cybersecurity Risk. Quantum and its service providers are subject to risks associated with a breach in cybersecurity, including unauthorized access to systems, networks or devices (such as through “hacking” activity); infection from computer viruses or other malicious software code; and attacks that shut down, disable, slow or otherwise disrupt operations, business processes or website access or functionality, may occur. In addition, internal incidents can occur, such as the inadvertent release of confidential information (possibly resulting in the violation of applicable privacy laws). A cybersecurity breach could result in the loss or theft of Client data, the inability to access electronic systems (“denial of services”), loss or theft of proprietary information or corporate data, physical damage to a computer or network system or costs associated with system repairs. Such incidents could cause the Quantum or other service providers to incur regulatory penalties, reputational damage, additional compliance costs or financial loss. Additionally, if Quantum or its service providers are hacked, Clients may be subject to fraud, spoofing, and other cyber tactics to gain control over Clients Exchange Accounts. Clients should be extremely cautious when communicating electronically with Quantum and should never provide Quantum or its affiliate with credentials to its Exchange Account, and such information will never be requested.

THE FOREGOING LIST OF CERTAIN RISKS ASSOCIATED WITH USING THE SERVICE IS NOT A COMPLETE LIST OF THE RISKS INVOLVED IN USING THE SERVICE.