Preamble

This Risk Disclosure Statement (the “Risk Disclosure”) describes the risks associated with the acquisition of Mining Hardware, the use of Hosting Services and the acquisition of Service Packages from Cuverse Limited (“Cuverse”). The Risk Disclosure forms an integral part of the Mining Hardware Hosting Agreement and the Mining Service Agreement (together, the “Service Agreements”).

By accepting the Service Agreements, the Customer confirms that the Customer has reviewed this Risk Disclosure, understands the risks set out herein, and knowingly accepts them. The Customer acknowledges that the acquisition of Mining Hardware or Service Packages constitutes an activity associated with material financial, technological and regulatory risks, and is not suitable for all customers.

This Risk Disclosure is not an exhaustive list of all possible risks. The Customer is responsible for conducting their own due diligence and, where necessary, for obtaining independent advice (legal, financial, tax) prior to entering into the Service Agreements.

§ 1. General Statement on Mining as Economic Activity

(1) No Profit Guarantee. Cuverse does not guarantee or promise any form of profit, income or return on investment from the acquisition of Mining Hardware or Service Packages. The mining of crypto-assets is a high-risk activity and the Customer may lose, in whole or in part, the funds that the Customer has paid.

(2) No Investment Advice. Cuverse does not provide investment advice, financial planning or brokerage services. Any information published by Cuverse (on the website, in marketing materials or in the dashboard) is provided for informational purposes only and does not constitute an investment recommendation, an offer to sell securities or an invitation to invest.

(3) Past Performance. Past mining results, including historical data on profitability, mining difficulty, crypto-asset prices and equipment efficiency, are not a guarantee or indicator of future results.

(4) Sophisticated Activity. The Customer acknowledges that the mining of crypto-assets requires a certain level of technical, financial and regulatory literacy. Cuverse recommends that Customers without experience in this field begin with a small commitment and gradually increase their involvement as experience is acquired.

(5) Long-Term Nature. The Service Agreements are entered into for a term of between 12 and 60 months. The Customer must be prepared to make a long-term commitment and should not invest funds that the Customer may need in the short term.

§ 2. Cryptocurrency Market Risks

(1) Volatility. The crypto-asset markets are highly volatile. The price of Bitcoin and other crypto-assets may fluctuate materially over short periods of time, which directly affects:

• the economic efficiency of mining (Mining Rewards expressed in fiat);
• the ratio between Mining Rewards and electricity costs (Hosting Fees / Service Fees);
• the overall profitability or unprofitability of the Customer’s participation in the Service Agreements.

In periods of significant price decline, mining may become economically unviable, and the Customer may suffer losses exceeding the value of the Mining Rewards.

(2) Liquidity Risk. In periods of market stress, the liquidity of crypto-assets may decrease, making the conversion of Mining Rewards into fiat currency at a fair price more difficult.

(3) Market Manipulation. The crypto-asset markets have historically been subject to manipulation, including wash trading, pump-and-dump schemes and other practices that may distort prices. Cuverse does not control market conditions and is not liable for their consequences for the Customer.

(4) Total Loss Risk. In extreme cases, the value of individual crypto-assets may fall to zero. The Customer must be prepared for the possibility of a total loss of the value of accumulated Mining Rewards.

§ 3. Technical Risks of Mining

(1) Mining Difficulty. The mining difficulty of Bitcoin and other crypto-assets is automatically adjusted as the total network hash rate rises or falls. Mining difficulty has a long-term tendency to increase, which results in a reduction in the volume of crypto-assets mined by the same equipment per unit of time. This reduction is a natural property of the network and is not controlled by Cuverse.

(2) Hardware Obsolescence. Mining Hardware is subject to technological obsolescence. New equipment models with higher efficiency (Hash Rate per Watt) appear regularly, which results in a reduction in the relative competitiveness of existing Mining Hardware. Cuverse does not guarantee that the Mining Hardware acquired by the Customer will retain its economic competitiveness throughout the Term.

(3) Performance Degradation. The performance of Mining Hardware naturally declines over time as a result of component wear, thermal stress and other factors. Cuverse uses reasonable efforts to maintain the equipment but does not guarantee the maintenance of the initial level of performance throughout the Term.

(4) Hash Rate Variance. The actual Hash Rate of an individual unit of Mining Hardware may vary within the manufacturer’s tolerance. The Hash Rate stated on the product page is an average value and does not constitute a guarantee of any specific outcome for an individual device.

(5) Hardware Failure. Mining Hardware may fail as a result of manufacturing defects, extreme operating conditions or other causes. During the warranty period, Cuverse provides for the repair or replacement of defective components in accordance with the terms of the Mining Hardware Hosting Agreement. Following the expiry of the warranty period, repair is carried out at the cost of the Customer. In the case of Service Packages, the obligation to maintain the Hash Rate Capacity rests with Cuverse for the entire Service Period.

(6) Bitcoin Halving. The block reward in the Bitcoin network is reduced approximately every four years as a result of the programmed “halving” event. This results in a reduction of Mining Rewards in BTC at the same Hash Rate. The halving is a fundamental feature of the Bitcoin protocol and is not controlled by Cuverse.

§ 4. Mining Pool Risks

(1) Pool Operator Independence. The Mining Pool to which the Customer’s Mining Hardware is connected is operated by an independent third party (F2Pool, ViaBTC, Antpool or another pool selected by the Customer). Cuverse does not control the operations of the Mining Pool and is not liable for its acts or omissions.

(2) Pool Fees and Payout Methods. The Mining Pool charges its own fees and applies different methods of calculating payouts (FPPS, PPS+, PPLNS and others). These fees are set by the Mining Pool, may be modified without prior notice to Cuverse, and reduce the actual amount of Mining Rewards received by the Customer.

(3) Pool Operational Failures. A Mining Pool may temporarily or permanently cease its operations, suffer technical failures, hack attacks, liquidity issues or other operational risks. In such cases, the Customer’s Mining Rewards for the relevant period may be lost or delayed.

(4) Custom Pool Risks. Where the Customer selects a Custom Pool, the Customer assumes in full all of the risks associated with the operation of the mining pool selected by the Customer, including the risks of incorrect configuration, unavailability of the pool, and loss of Mining Rewards. Cuverse is not liable for the outcomes of the connection to a Custom Pool.

§ 5. Custodial and Wallet Risks

(1) Non-Custodial Flow. Cuverse does not provide services for the custody or administration of crypto-assets within the meaning of Art 3(1)(17) MiCAR. Mining Rewards are transferred directly from the Mining Pool to the Customer Wallet, which is controlled exclusively by the Customer. At no time does Cuverse have access to the Customer’s private keys or control over the Mining Rewards.

(2) Customer Wallet Responsibility. The Customer bears full and sole responsibility for:

• the accuracy of the Customer Wallet address provided at onboarding;
• the security of the private keys to the Customer Wallet;
• the safekeeping of seed phrases, passwords and other means of access to the Customer Wallet;
• the storage of the Mining Rewards received.

Cuverse is not liable for the loss of Mining Rewards as a result of: the Customer’s provision of an incorrect Customer Wallet address; the loss of private keys; a compromise of the Customer Wallet; the Customer’s errors in handling crypto-assets; or any other acts or omissions of the Customer.

(3) No Recovery of Lost Crypto. Lost crypto-assets are not recoverable. The Customer must take all necessary precautions to protect the Customer Wallet, including the use of hardware wallets for large amounts, the secure backup of seed phrases, and the non-disclosure of private keys to third parties.

(4) Service Prepayment Conversion. The Service Prepayment paid by the Customer on account of future Hosting Fees or Service Fees is, where the top-up is made in cryptocurrency, immediately converted into its USD equivalent. The Customer acknowledges that, following such conversion, the Customer is not entitled to require a refund in the original cryptocurrency at the original exchange rate — any refund, where applicable, shall be made in USD or in another currency at Cuverse’s choice in accordance with the Refund Policy.

§ 6. Regulatory and Legal Risks

(1) Evolving Regulation. The regulation of crypto-assets and mining is in active development in all key jurisdictions. Changes in laws may materially affect:

• Cuverse’s right to provide services in particular jurisdictions;
• the Customer’s right to acquire Mining Hardware or Service Packages;
• the Customer’s tax obligations in connection with the receipt of Mining Rewards;
• the overall economic model of mining.

(2) Jurisdiction-Specific Restrictions. In particular jurisdictions, the mining of crypto-assets may be restricted, licensed or prohibited outright. The Customer bears sole responsibility for the determination of the legal regime applicable to the Customer and for compliance with applicable law. The list of jurisdictions in which the Cuverse services are not available is set out in the Acceptable Use Policy.

(3) Sanctions Compliance. Cuverse complies with international sanctions regimes (UN, EU, US, UK). Customers becoming subject to sanctions restrictions after the entry into the Service Agreements may be excluded from service in accordance with the rules set out in the Acceptable Use Policy.

(4) Tax Obligations. The Customer bears sole responsibility for the calculation, declaration and payment of all applicable taxes in connection with the receipt of Mining Rewards and other income relating to the Service Agreements. In most jurisdictions, Mining Rewards are characterised as ordinary income at the time of receipt, at fair market value. Cuverse does not provide tax advice and does not act as a tax agent.

(5) No Securities Classification. Cuverse characterises its products as (a) the acquisition of tangible equipment with related hosting services (the Mining Hardware Hosting Agreement) or (b) the provision of a computing service (the Mining Service Agreement). These products are not securities, investment contracts or other financial instruments within the meaning of applicable securities legislation. Cuverse is not registered as a broker-dealer or investment advisor in any jurisdiction.

§ 7. Operational Risks

(1) Service Availability. Cuverse uses commercially reasonable efforts to ensure the high availability of the Hosting Services and the Service Packages. However, the service may be interrupted as a result of scheduled maintenance, technical failures, electricity supply restrictions, changes in electricity market conditions (in respect of ECO Mode) or other factors.

(2) SLA Limitations. The SLA compensation provided for in the Service Agreements is limited and applies only to MAX Mode. No SLA compensation is provided for ECO Mode. The minimum guaranteed uptime is calculated on a calendar year basis, not over shorter periods.

(3) Data Center Risks. Mining Hardware is located in Data Centers operated by Cuverse or its partners. Data Centers are subject to risks, including power outages, cooling system failures, physical damage, cyberattacks and other risks.

(4) No Insurance. Cuverse does not provide insurance cover for the Customer’s Mining Hardware in Data Centers. The risks of theft, fire, flood, earthquake and other force majeure events fall within force majeure and are not covered by either the Standard Warranty or the Extended Warranty. Customers must take such risks into account and, where necessary, procure insurance cover through third parties.

(5) ECO Mode Discontinuation. Cuverse reserves the right to restrict or suspend ECO Mode where electricity market conditions render that mode economically unviable. In such case, the Customer may be transferred to MAX Mode with prior notice.

§ 8. Force Majeure Risks

Cuverse is not liable for any failure to perform its obligations as a result of circumstances beyond its reasonable control, including natural disasters, acts of war, acts of terrorism, strikes, electricity supply outages, acts of governmental authorities, changes in blockchain protocols (hard forks, soft forks), epidemics, cyberattacks against the blockchain network and other force majeure events. In such cases, the Customer may temporarily or permanently lose access to the services without any entitlement to compensation.

§ 8A. Service Package-Specific Risks

This § 8A discloses additional risks specific to Service Packages (under the Mining Service Agreement). The Customer must assess these risks independently prior to entering into the Mining Service Agreement.

(i) Absence of Property Rights. A Service Package does not grant the Customer any right of ownership, possession, use, disposition or other proprietary right in any specific item of Mining Hardware. Cuverse independently determines which equipment is used for the performance of the Guarantee of Service and is entitled to replace, relocate and consolidate equipment. The Customer has no claim to the transfer of any specific hardware, whether in kind or in value. In the event of cessation of Cuverse’s activities, the Customer does not retain any rights in physical assets.

(ii) Absence of Profitability Guarantee. The Package Price is not refundable in the event of Cancellation initiated by the Customer. Mining Rewards are volatile: their amount is affected by fluctuations in the price of crypto-assets, changes in mining difficulty, halving events, hard forks, the choice of Mining Pool and technical factors. The aggregate Mining Rewards over the Service Period may be materially lower than the Package Price, up to and including the total loss of the amount paid. The performance of mining depends on Cuverse’s technical decisions in respect of equipment maintenance and replacement; the Customer has no possibility of independently controlling or relocating the equipment.

(iii) Regulatory Uncertainty. The legal characterisation of Service Packages in different jurisdictions is the subject of ongoing regulatory analysis. In particular jurisdictions, Service Packages may be characterised as a regulated financial product, which may result in restrictions on sales, the forced termination of the Service Period and other consequences. Cuverse undertakes to inform the Customer of material regulatory changes.

§ 9. Cancellation and Termination Risks

(1) Mining Hardware Hosting Agreement. The Customer is not entitled to terminate the Hosting Services early, save in the cases expressly provided for in the Mining Hardware Hosting Agreement. Requests for mid-term buyback, exchange or shipping (§ 9.4 of that agreement) are considered by Cuverse at its sole discretion and do not constitute an unconditional right of the Customer.

(2) Mining Service Agreement. The Customer is entitled to terminate the Service Package at any time during the Service Period (Cancellation); however:

• the Package Price is wholly non-refundable and is not refunded under any circumstances;
• following Cancellation, the Service Package transitions to the STOPPED state, which is irreversible — reactivation is not possible;
• in order to resume services, the Customer must purchase a new Service Package on the prices and terms then in effect.

(3) End of Term. Upon expiry of the Term (under the Mining Hardware Hosting Agreement) or the Service Period (under the Mining Service Agreement), the services are terminated. Cuverse is not obliged to renew the services automatically. In respect of Mining Hardware, default storage with the applicable storage fees applies pursuant to § 9.7 of the Mining Hardware Hosting Agreement.

§ 10. Acknowledgment

By accepting the Service Agreements, the Customer confirms that the Customer:

• has reviewed this Risk Disclosure Statement in its entirety;
• understands the risks described in this Document;
• knowingly accepts the risks set out herein and confirms that the Customer is prepared to bear them;
• has the necessary financial resources to participate in mining activity and is prepared for the possible loss of the funds paid;
• has, where necessary, obtained independent legal, financial and tax advice;
• is taking the decision to enter into the Service Agreements independently, without any pressure on the part of Cuverse or its affiliates;
• understands that Cuverse does not guarantee or promise any profit from participation in mining activity.