Risk Disclosure

1. Purpose of This Disclosure

Vega Crypto Strategies ("Vega," "we," "us," or "our") provides cryptocurrency market analysis tools, predictions, and risk management analytics. This Risk Disclosure Statement is designed to inform you of the risks associated with:

• Trading and investing in cryptocurrencies
• Relying on algorithmic predictions and models
• Using leverage and derivatives in crypto markets
• Market volatility and systemic risks unique to digital assets

You acknowledge that you have read, understood, and accepted these risks by using our Services.

2. Not Financial Advice

3. Cryptocurrency Market Risks

3.1 Extreme Volatility

Cryptocurrency markets are among the most volatile financial markets in existence:

• Price swings of 20-50% in a single day are not uncommon
• Historical examples: Bitcoin crashed -83% (2017-2018), -77% (2021-2022)
• Altcoins regularly experience -90% or greater drawdowns
• Flash crashes can occur due to low liquidity, causing instant liquidations
• Volatility can spike suddenly without warning during market stress

3.2 24/7 Markets

Unlike traditional stock markets, cryptocurrency markets never close. Significant price movements can occur at any time, including weekends and holidays when you may not be actively monitoring your positions. There are no circuit breakers or trading halts to prevent extreme moves.

3.3 Liquidity Risk

Liquidity can evaporate during market stress:

• Bid-ask spreads can widen dramatically during crashes
• You may be unable to exit positions at desired prices
• Slippage can be extreme for large orders or illiquid tokens
• Exchange outages during high volatility can prevent order execution

3.4 Regulatory Risk

Cryptocurrency regulation is evolving and uncertain:

• Governments may ban, restrict, or heavily regulate cryptocurrencies
• Tax treatment can change retroactively
• Exchanges may be shut down or sanctioned
• Certain tokens may be classified as securities, triggering delisting
• Your jurisdiction may prohibit certain trading activities

3.5 Technology and Security Risks

Cryptocurrencies are subject to unique technical risks:

• Exchange hacks: Exchanges have been hacked, resulting in total loss of customer funds (Mt. Gox, QuadrigaCX, FTX)
• Smart contract bugs: Vulnerabilities can result in loss of funds (The DAO, Poly Network)
• 51% attacks: Smaller blockchains are vulnerable to consensus attacks
• Private key loss: If you lose your keys, your funds are permanently lost
• Hard forks: Network splits can create uncertainty and value loss

3.6 Counterparty and Exchange Risk

Trading on centralized exchanges exposes you to counterparty risk:

• Exchanges can become insolvent (FTX, Celsius, BlockFi, Voyager)
• Funds held on exchanges are not insured by FDIC or SIPC
• Exchanges may freeze withdrawals during market stress
• Custodial risk: "Not your keys, not your coins"

4. Risks Related to Vega's Predictions and Models

4.1 Past Performance Is Not Indicative of Future Results

Even with walk-forward validation (testing on unseen data), there is no guarantee that:

• Future market conditions will resemble historical patterns
• Regime detection will continue to be accurate
• Models will adapt quickly enough to new market dynamics
• Information Coefficient (IC) and accuracy rates will persist

4.2 Model Limitations

All predictive models have inherent limitations:

• Black swan events: Models cannot predict unprecedented, extreme events (e.g., COVID-19 crash, Terra/LUNA collapse)
• Data limitations: Models are trained on historical data and may not capture regime shifts or new market dynamics
• Overfitting risk: Despite validation, models may capture noise rather than signal
• Feature staleness: Market microstructure changes can render features less predictive
• Regime misclassification: Our regime detector may incorrectly classify market conditions

4.3 Prediction Accuracy Variability

Our models show different accuracy across time horizons and market conditions:

• Time horizons (7d, 30d, 90d): All subject to error and uncertainty
• Crisis conditions: Higher SHORT accuracy (79.5%) but LONG predictions are poor (42.6%)
• Regime-dependent performance: Models work better in some regimes than others

Even our best-performing models are wrong 20-40% of the time. You must manage risk accordingly.

4.4 Signal Delays and Latency

Predictions and regime classifications are updated periodically (not continuously). By the time you receive a signal or regime change alert, market conditions may have already changed. Network latency, exchange delays, and execution slippage can reduce or eliminate theoretical prediction edge.

4.5 No Guarantee of Profitability

Using Vega's predictions does not guarantee profitable trading. Even if predictions are directionally accurate, factors like:

• Poor entry/exit timing
• Excessive position sizing
• High trading fees and slippage
• Emotional decision-making
• Ignoring risk management guidelines

...can result in losses even with accurate predictions.

5. Risks of Leverage and Derivatives

5.1 Liquidation Risk

When using leverage:

• Your position can be automatically liquidated if the market moves against you
• Flash crashes can trigger liquidations even if the price recovers immediately
• You may lose your entire margin balance in seconds during extreme volatility
• Cascading liquidations can cause self-reinforcing price spirals

5.2 Funding Rates

Perpetual swap contracts charge funding rates (positive or negative) every 8 hours. During periods of extreme market bias, funding rates can erode your position value significantly, even if the price doesn't move.

5.3 Leverage Amplifies Losses

Examples of leverage risk:

• 10x leverage: A -10% price move liquidates your position (100% loss)
• 20x leverage: A -5% price move liquidates your position (100% loss)
• 50x leverage: A -2% price move liquidates your position (100% loss)

Vega does NOT recommend using high leverage. Our Value-at-Risk (VaR) calculations assume reasonable position sizing, not maximum leverage.

6. Risk Management is Your Responsibility

While Vega provides risk management tools (Value-at-Risk, position sizing recommendations, stop-loss suggestions), you are solely responsible for managing your risk.

6.1 Position Sizing

Our position sizing recommendations are guidelines, not guarantees:

• Kelly criterion calculations assume normal distributions (crypto returns are fat-tailed)
• VaR estimates can underestimate tail risk during black swan events
• You must adjust position sizes based on your personal risk tolerance and financial situation

6.2 Diversification

Cryptocurrency assets are highly correlated. Diversifying across multiple cryptocurrencies does not eliminate systemic risk. During market-wide crashes (e.g., March 2020, May 2021, November 2022), nearly all crypto assets decline simultaneously.

6.3 Stop-Losses Are Not Guaranteed

Stop-loss orders can fail during extreme volatility due to:

• Price gaps (your stop may execute far below your set level)
• Exchange outages preventing order execution
• Insufficient liquidity to fill your order at any price

7. Emotional and Psychological Risks

Trading cryptocurrency can be emotionally taxing:

• FOMO (Fear of Missing Out): Can lead to chasing pumps and buying at tops
• Panic selling: Can lock in losses during temporary dips
• Overconfidence after wins: Can lead to excessive risk-taking
• Revenge trading after losses: Can compound losses through emotional decisions
• Addiction: 24/7 markets and high volatility can become psychologically addictive

If trading is causing significant stress, anxiety, or interfering with your daily life, stop trading and seek professional help.

8. Suitability and Eligibility

8.1 Who Should NOT Trade Cryptocurrencies

Cryptocurrency trading is NOT suitable for:

• Individuals who cannot afford to lose their entire investment
• Those using borrowed money or funds needed for living expenses
• Investors with low risk tolerance or aversion to volatility
• Those without sufficient understanding of blockchain technology and crypto markets
• Individuals prohibited by law from trading cryptocurrencies in their jurisdiction

8.2 Only Risk What You Can Afford to Lose

9. No Guarantees or Warranties

Vega Crypto Strategies makes NO guarantees or warranties regarding:

• The accuracy, completeness, or timeliness of predictions
• The profitability of trading based on our signals
• The continued operation or availability of the Services
• The absence of errors, bugs, or technical malfunctions
• Protection from losses or achievement of gains

THE SERVICES ARE PROVIDED "AS IS" WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED.

10. Your Acknowledgment

By using Vega Crypto Strategies, you acknowledge and agree that:

• You have read and understood this entire Risk Disclosure Statement
• You understand that cryptocurrency trading carries substantial risk of loss
• You are using the Services for informational and educational purposes only
• You will make all trading decisions independently and at your own risk
• You will not hold Vega liable for any losses incurred through trading
• You have consulted with a qualified financial advisor (or chosen not to)
• You are legally permitted to trade cryptocurrencies in your jurisdiction
• You can afford to lose your entire investment without financial hardship

11. Seek Professional Advice

12. Questions or Concerns

If you have questions about this Risk Disclosure Statement or the risks associated with using Vega Crypto Strategies, please contact us: