Risk Disclosure
Last updated: January 2026
⚠️ Important Warning
Cryptocurrency trading and investment involve substantial risk of loss and are not suitable for all investors. Before deciding to trade or invest in cryptocurrencies, you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment; therefore, you should not invest money that you cannot afford to lose.
Table of Contents
1. General Risk Statement
This Risk Disclosure Statement provides you with information about some of the risks associated with cryptocurrency trading, exchange services, and related financial activities offered by Kotova. This document does not disclose all the risks and other significant aspects of cryptocurrency trading. You should not engage in cryptocurrency trading unless you understand the nature of the transactions you are entering into and the extent of your exposure to risk.
2. Cryptocurrency Market Risks
2.1 Extreme Price Volatility
Cryptocurrency prices are highly volatile and can fluctuate significantly within short periods. Price movements of 10-20% or more in a single day are not uncommon. This volatility can result in substantial gains but also significant losses. Past performance is not indicative of future results.
2.2 Market Liquidity Risk
Cryptocurrency markets may experience periods of low liquidity, making it difficult to execute trades at desired prices. During market stress, you may not be able to sell your assets quickly or at favorable prices. Some cryptocurrencies may have limited trading volume, increasing liquidity risk.
2.3 Market Manipulation
Cryptocurrency markets are less regulated than traditional financial markets and may be subject to manipulation, including pump-and-dump schemes, wash trading, and spoofing. Such activities can cause artificial price movements and lead to unexpected losses.
3. Technical and Operational Risks
3.1 Technology Failures
Cryptocurrency systems rely on complex technology that may experience failures, bugs, or vulnerabilities. This includes risks related to blockchain networks, smart contracts, wallets, and exchange platforms. Technical failures could result in loss of access to your assets or financial losses.
3.2 Cybersecurity Risks
Cryptocurrency holdings are subject to cybersecurity risks including hacking, phishing, malware, and other cyber attacks. Despite security measures, no system is completely immune to breaches. Lost or stolen cryptocurrencies are generally unrecoverable.
3.3 Private Key Security
The security of your cryptocurrency holdings depends on the safekeeping of your private keys. Loss of private keys results in permanent loss of access to your assets. There is no recovery mechanism for lost private keys.
3.4 Network and Blockchain Risks
Blockchain networks may experience congestion, forks, or protocol changes that could affect your transactions or holdings. Network attacks (such as 51% attacks) could compromise the security of certain cryptocurrencies.
4. Regulatory and Legal Risks
4.1 Changing Regulations
The regulatory landscape for cryptocurrencies is evolving rapidly. Changes in laws or regulations may adversely affect the use, transfer, exchange, or value of cryptocurrencies. Some jurisdictions may restrict or prohibit cryptocurrency activities entirely.
4.2 Tax Implications
Cryptocurrency transactions may be subject to taxation. Tax treatment varies by jurisdiction and is subject to change. You are responsible for determining and fulfilling your tax obligations. We recommend consulting with a qualified tax professional.
4.3 Legal Uncertainty
The legal status of cryptocurrencies and related activities may be unclear or undefined in certain jurisdictions. This uncertainty could affect your rights and the enforceability of transactions.
5. Exchange and Counterparty Risks
5.1 Exchange Platform Risk
While we implement robust security and operational measures, no exchange platform is without risk. Service interruptions, system failures, or unforeseen events could temporarily or permanently affect access to your account or assets.
5.2 Third-Party Risks
Our services may involve third-party providers for certain functions. Failures or defaults by these third parties could affect your transactions or holdings. We carefully vet our partners but cannot guarantee their performance.
6. Specific Service Risks
6.1 Kotova X: Crypto-to-Crypto Exchange
When exchanging cryptocurrency:
- Exchange rates fluctuate continuously and the rate at execution may differ from the quoted rate
- Processing times may vary, and price movements during processing are at your risk
- Blockchain transactions may be subject to delays or failures outside our control
- Minimum and maximum transaction limits apply
- If a counterparty other than KotovaX fails during your transaction, we do not guarantee the safety or recovery of your assets, though Kotova will make efforts to compensate users.
- When KotovaX is set as the counterparty, users enjoy enhanced security, reliability and transactional insurance protection as per the terms of service.
6.2 Kotova Pay: Bill Payments Service
When using our bill payment services:
- Bank transfers are subject to banking system processing times and potential delays
- Incorrect payment details may result in failed or misdirected payments
- Currency conversion rates apply and may change
- Some transactions may be subject to additional verification or compliance checks
6.3 Escrow Services
When using our blind escrow services:
- Escrowed funds are held according to predefined conditions
- Release of funds depends on fulfillment of agreed conditions
- Disputes may arise and resolution processes take time
- We act as a neutral intermediary and cannot guarantee counterparty performance
7. No Investment Advice
Kotova does not provide investment, financial, legal, or tax advice. Any information provided is for general informational purposes only. You should consult with qualified professionals before making any investment or financial decisions. We do not make recommendations regarding the suitability of any cryptocurrency or transaction for you.
8. Limitation of Liability
To the maximum extent permitted by law, Kotova shall not be liable for any losses arising from:
- Market movements or price volatility
- Regulatory changes or government actions
- Technical failures beyond our reasonable control
- Cybersecurity incidents affecting blockchain networks
- Your failure to secure your account credentials or private keys
- Decisions made based on information or services we provide
9. Your Responsibilities
By using our services, you acknowledge and accept that:
- You have read and understood this Risk Disclosure
- You are of legal age and have the capacity to enter into binding agreements
- You understand the risks of cryptocurrency trading and can afford potential losses
- You will conduct your own research before making any transactions
- You are responsible for securing your account and any associated credentials
- You will comply with all applicable laws and regulations
- You will keep your contact information current for important communications
10. Seeking Professional Advice
We strongly recommend that you:
- Consult with a qualified financial advisor before trading cryptocurrencies
- Seek legal advice regarding the regulatory status of cryptocurrencies in your jurisdiction
- Obtain tax advice to understand your tax obligations
- Never invest more than you can afford to lose
- Diversify your investments and not concentrate all assets in cryptocurrencies
11. Updates to This Disclosure
We may update this Risk Disclosure from time to time to reflect changes in our services, market conditions, or regulatory requirements. We encourage you to review this document periodically. Continued use of our services constitutes acceptance of any updates.
12. Contact Us
If you have questions about this Risk Disclosure or our services, please contact us:
Kotova
c/o IP-Management #6540
Ludwig-Erhard-Str. 18
20459 Hamburg, Germany
Email: [Enable JavaScript]
Telegram: @kotova_io