While Virtual Asset (VA) systems provide revolutionary advancements in the delivery of financial services by allowing faster and cheaper mechanisms to transfer funds, VASPs such as Coins.xyz are enjoined to diligently consider the attendant risks associated in the offering and dealing of VAs. Likewise, these risks must be disclosed to all Coins.xyz customers to allow for an informed decision when purchasing or trading VAs.
Listed below are general risks involved when dealing with virtual assets:
1. Price volatility
The value of virtual assets is driven by supply and demand. In other words, if more people are trying to acquire VAs, its value increases. On the other hand, if there are adversities involving VAs, its value decreases. Because of speculations in the VA market, prices are unstable and can change quickly over time. Users trading, investing, and/or accepting VAs bear the risk of loss. There is no legal protection available for VA users in such cases.
Coins.xyz has enabled features that can help ensure customers are properly informed of the VA prices prior to making any purchase or trade. Within the Coins.xyz website, a confirmation screen listing the current buy or sell rate is presented before completing the conversion. Price movements can also be monitored through the Crypto Prices section.
2. Potential for unlawful use
Because of the highly anonymous nature of VA transactions - fraudsters, scammers, and people intending to do unlawful activities (such as money laundering and terrorist financing) find this technology attractive for their own personal gain. It is important that you engage with legitimate Virtual Asset Service Providers that are registered and regulated by government authorities whose practices are hinged on safeguarding the funds of their customers and ensure their products are created and designed with the best interest of their customers in mind.
Customers must exercise extreme care in completing their VA transactions because all transactions are deemed final and irreversible. Be wary of investment opportunities offering quick gains or rewards and ensure that entities you are dealing with are properly registered businesses. For more information on ensuring the safety of your funds, you may browse through our Safety and Security section.
3. Prone to theft or loss
Since virtual assets are available online, it may be subject to hacking or theft, virus infection, and other cyber security threats. VA holders may inadvertently lose their private keys that are used to secure the VA wallet or their login credentials may fall in the hands of malicious actors. VA holders must adopt sound security practices and other safety measures to protect their accounts.
Though Coins.xyz services operate with industry-standard measures such as SSL connections to AES-225 Encryption, account holders still have the ultimate responsibility in keeping their account secure. They must ensure that, at the minimum, they are the only ones using their account (no one else has access to it), enable two-factor authentication (2FA), or make sure the one-time password (OTPs) cannot be accessed by anyone else. You may refer to this article on keeping your Coins.xyz account safe.
4. VA transactions are immediate and irreversible
In case of fraudulent, unauthorized, or erroneous transactions, VA holders will almost find it impossible to reverse the said transactions. VA holders will be unable to file complaints or seek recourse since there is no central authority or issuer that backs or guarantees VAs. With this, VA holders must exercise extreme caution in completing their transactions. Ensure that all details, such as (and not limited to) the wallet address, network, destination tag, and amount are correct before confirming the transaction. Finally, customers must take steps in establishing the recipient’s identity and carry out their own due diligence in making sure you do not fall victim to fraud.
5. VA holdings are not insured
As VAs are not considered as deposits, they may not be insured with a deposit insurance corporation.
It is highly advised that customers deal with registered VASPs that are obligated to follow the regulator’s rules and guidelines that heavily promulgates the protection of the customers.
Contact us through our Chatbot widget, Coins Support Form, or email us at support@coins.xyz should you need further assistance.