Risk Cryptoasset Products

Product-Specific Risk Summary

Risk summary outlines the key risks associated with various crypto-assets available through TransFi.
Please ensure you understand these risks before investing or engaging with these products. Not all crypto-assets are alike, and specific risks apply to different categories of assets. Investments in crypto-assets are not protected by the Financial Services Compensation Scheme (FSCS), and their value can fluctuate significantly.

Stablecoins

Stablecoins, such as USDT and USDC, are crypto-assets designed to maintain a stable value by pegging to reserve assets like fiat currency. However, they still carry financial risks, including:

• Counterparty Risk: Stablecoins backed by collateral depend on third parties to maintain the collateral. Insolvency or mismanagement of these parties can undermine the stability of the asset.
• Redemption Risk: Redemption processes may fail during periods of high market volatility or operational issues, preventing access to the underlying collateral.
• Collateral Risk: Stablecoins backed by other crypto-assets are subject to volatility in the value of the collateral, potentially affecting stability.
• Foreign Exchange Risk: Stablecoins denominated in foreign currencies (e.g., USD) expose investors to exchange rate fluctuations against their local currency.
• Algorithmic Risk: Stablecoins relying on algorithms to maintain stability (e.g., supply adjustment mechanisms) may fail, leading to instability or total loss of value.