Investing in virtual assets carries significant risks, and understanding these risks is essential before engaging with any digital asset platform. This comprehensive risk disclosure outlines the potential dangers associated with trading, staking, lending, and using advanced financial products such as perpetual futures and options. Whether you're new to digital assets or an experienced trader, this guide will help you make informed decisions.
Nature of Virtual Assets
Virtual assets are not legal tender and are not backed by any government or central authority. Unlike traditional currencies, they operate independently of centralized financial systems. There is no guarantee that a person or entity accepting virtual assets today will continue to do so in the future.
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Value of Virtual Assets and Risk of Loss
Trading virtual assets is highly speculative and involves substantial risk. These assets typically lack intrinsic value or underlying physical backing, meaning their prices are driven largely by market sentiment, demand, and perception rather than fundamental metrics.
Market conditions can shift rapidly due to news events, regulatory developments, or technological changes—leading to extreme volatility. Prices may fluctuate dramatically within minutes, and losses can occur just as quickly. In some cases, a virtual asset may lose all value if interest wanes or development halts.
Orders placed on trading platforms may not execute at desired prices, especially during periods of high volatility. Stop-loss and limit orders do not guarantee protection against losses, as slippage or market gaps can result in execution far from expected levels.
Users should only invest capital they can afford to lose without affecting their standard of living. Trading is unsuitable for individuals with limited resources, low risk tolerance, or minimal investment experience.
Before opening an account, users confirm they understand these risks. OKX provides execution-only services and does not offer financial, tax, or investment advice.
Past Performance Is Not Indicative of Future Results
Historical price data for any virtual asset does not predict future performance. Markets are influenced by unpredictable forces—including speculation, macroeconomic trends, and investor behavior—making past returns unreliable indicators.
Suitability of Services
OKX functions as a technology platform facilitating trade execution and custody of virtual and fiat currencies. It does not assess whether services or specific trades are suitable for individual users.
All information on the platform is for general informational purposes only and should not be interpreted as financial advice or a trading recommendation. Users are solely responsible for evaluating the risks involved in each transaction.
By using OKX, users affirm they have sufficient knowledge, experience, and professional guidance to independently assess the merits and risks of any trade or underlying asset.
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Availability of Virtual Assets
The ability to buy or sell a virtual asset depends on market liquidity and the presence of counterparties. OKX cannot guarantee availability or timing of trades.
Illiquid markets increase the risk of price slippage and difficulty exiting positions at favorable rates. Additionally, blockchain upgrades such as forks can impact asset value and functionality.
A hard fork may create a new virtual asset and split the blockchain permanently. While OKX aims to support users affected by forks, outcomes depend on third-party protocols outside its control. The platform does not own or govern any blockchain networks and assumes no liability for changes in protocol or value resulting from such events.
OKX reserves the right to delist assets according to its published guidelines.
Currency Risk
Trades may be executed in currencies different from the user’s deposit currency. Exchange rate fluctuations can significantly affect gains or losses, adding another layer of risk to cross-currency transactions.
Custody Risk
Fiat currencies are held in segregated client accounts with Zand Bank in compliance with applicable regulations. However, digital assets are not considered "deposits" under law and are not protected like traditional banking products.
Client digital assets may be pooled in omnibus wallets managed by OKX affiliates. In the event of insolvency, pooled assets could be subject to proportional loss if shortfalls occur.
Third-party custodians may hold client funds in jurisdictions with varying legal frameworks. If such a custodian fails, OKX may only have an unsecured claim on behalf of users, potentially resulting in partial or total loss.
Risk of Financial and Cyber Crime
Virtual assets are vulnerable to fraud, scams, phishing attacks, and hacking. Once stolen, recovery is often impossible due to the irreversible nature of blockchain transactions.
Users must safeguard private keys and use secure storage methods. Loss of access—whether through human error or cyberattack—can lead to permanent loss of funds.
Technology Risk
Understanding virtual assets requires technical knowledge of cryptography, distributed ledger technology, and smart contracts. Their complexity introduces operational challenges that may affect service availability.
OKX cannot guarantee uninterrupted access to its platform. Technical failures, cyberattacks, or sudden traffic surges may disrupt services, delay transactions, or lead to loss of assets.
Transactions on blockchains are irreversible. Sending funds to an incorrect address typically results in permanent loss. Similarly, losing a private key means losing control over associated assets forever.
Legal and Regulatory Risk
Users are responsible for complying with all applicable laws, including tax reporting obligations. Some banks may restrict or freeze accounts linked to virtual asset activity due to perceived risk.
Regulatory environments vary globally and are subject to change. Governments may ban or restrict trading activities at any time. OKX may suspend accounts in response to legal requirements.
Margin, Gearing, and Leverage
Leveraged trading allows users to control large positions with relatively small margin deposits. While this amplifies potential profits, it also increases the risk of significant losses—even exceeding initial investment.
Users must maintain minimum margin levels. If market movements deplete equity below required thresholds, additional funds must be deposited immediately. Failure to meet margin calls may result in automatic position liquidation.
OKX may adjust margin requirements at any time based on market volatility, economic news, or regulatory changes.
Staking Risks
Staking involves locking digital assets to support blockchain operations and earn rewards. However:
- Impermanent loss may occur if asset prices change after deposit.
- Assets are illiquid during the staking period.
- Slashing penalties apply for protocol violations.
- Rewards are not guaranteed and depend entirely on the staking protocol.
- Smart contract bugs or network issues may lead to asset loss.
OKX does not endorse staking protocols or guarantee returns.
Perpetual Futures and Options Risks
Perpetual Futures ("Perps")
- High leverage magnifies gains and losses.
- Rapid liquidation can occur in volatile markets.
- Funding rates add holding costs.
- Counterparty risk exists depending on platform security.
Options Products
- Complex instruments requiring deep understanding.
- Time decay erodes value as expiration nears.
- Buyers risk losing the entire premium.
- Low liquidity may hinder entry or exit.
Lending and Borrowing Disclosures
Lending and borrowing services are available only to qualified or institutional clients. Interest payments are denominated in the same virtual asset borrowed or lent.
Borrowers retain withdrawal rights but face liquidation risk if collateral value drops. Lenders lock assets into protocols and lose access during staking periods.
OKX mitigates counterparty risk through over-collateralization and insurance funds when offering lending services.
Flexible Loan Risks
- Collateralized assets are inaccessible until loan repayment.
- Volatile markets increase liquidation risk.
- Interest rates fluctuate hourly and can reach up to 100% APR.
- Early warnings for liquidation are not guaranteed.
- Liquidity depends on user participation in OKX Simple Earn.
Safeguarding Client Assets
OKX prioritizes asset security through:
- Segregated fiat accounts with Zand Bank.
- Isolated virtual asset wallets.
- Advanced technical safeguards aligned with global standards.
- Bankruptcy-remote structures designed to protect client funds even in insolvency scenarios.
While operational measures are robust, final legal determinations rest with courts.
Responsible Senior Management
As of June 9th, 2025, no member of OKX Middle East’s senior management or board has faced criminal charges or convictions in the UAE or any other jurisdiction. The company maintains high ethical standards and transparency in leadership.
Frequently Asked Questions (FAQ)
Q: Are my funds safe on OKX?
A: OKX implements strict segregation of client assets, advanced security protocols, and works with regulated financial institutions. However, no system is immune to risk—especially from cyber threats or market volatility.
Q: Can I lose more than I invest?
A: With leveraged products like perpetual futures, yes—losses can exceed initial deposits if positions move sharply against you.
Q: Does OKX provide investment advice?
A: No. OKX offers an execution-only platform. Users must conduct their own research and seek professional advice when needed.
Q: What happens during a blockchain fork?
A: OKX assesses forks upon discovery and supports eligible users in claiming forked assets, subject to technical feasibility and third-party cooperation.
Q: Can I withdraw my staked assets anytime?
A: Generally no—assets remain locked for the staking duration. Early withdrawal may incur penalties based on the protocol’s rules.
Q: Who regulates OKX Middle East Fintech FZE?
A: The entity operates under regulatory oversight in Dubai and complies with local frameworks including VARA guidelines.
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