Last Updated: April 24, 2023
Important Information Regarding Trading Crypto with Paxos
Fierce Technology, Inc. (“Fierce Technology”) is the operator of the Fierce Platform which offers customers the ability to access crypto trading and custody services (the “Crypto Trading Services”) with a crypto account in customer’s name through the Fierce Technology mobile software application (“Fierce App”).
Fierce Technology has selected Paxos Trust Company, LLC, a New York Limited Purpose Trust Company (NMLS #1766787) licensed by the New York Department of Financial Services and specifically licensed to engage in virtual currency services (“Paxos”) as the Crypto Broker/Custodian with which to work, and all Crypto Trading Services are provided by Paxos in accordance with the Paxos Exchange Terms and Conditions (“Paxos T&Cs”).
By requesting trading permissions and custody for crypto through the Fierce App, you are opening a crypto account in your name at Paxos. All crypto trading you do through the Fierce App will be executed in your crypto account with Paxos, and Paxos will be your custodian and counterparty for those trades. This means that the crypto in your crypto account will be carried by Paxos and your ownership of them will be represented on its internal ledger. All other assets, including securities and fiat currency, are carried in your respective DriveWealth and Cross River Bank accounts though the Fierce App. You should carefully consider the risks below before making a decision to utilize the Crypto Trading Services.
Your Agreement with Paxos Governs Your Paxos Crypto Account
Your crypto account is governed by the Paxos T&Cs. You should read the Paxos T&Cs carefully and understand the terms of your relationship with Paxos.
No Investment Advice, Recommendations or Tax Advice
Fierce Technology and Paxos do not provide investment, tax, or trading advice or recommendations. By making the Crypto Trading Services available to you through the Fierce App, neither Fierce Technology nor Paxos makes any assessment, representation, or warranty concerning the appropriateness or suitability of crypto for your financial circumstances. The Paxos Services are “execution only.” Fierce Technology and Paxos will not advise you on any transaction. Neither Fierce Technology nor Paxos will assess whether your transactions are suitable for you or help you avoid losses. You should obtain your own financial, legal, taxation, and other professional advice as to whether crypto is an appropriate investment for you.
Crypto trading can be extremely risky. Crypto prices are highly volatile and can rise or fall dramatically and quickly. If you hold a position in crypto and the value of the asset falls, you will lose money. Crypto trading is generally inappropriate using funds drawn from retirement savings, student loans, mortgages, emergency funds, or that have been set aside for other purposes. You should carefully consider your financial circumstances and your risk tolerance before trading crypto and you should not trade crypto unless you have the financial capability to sustain losses if they occur. You should be aware that you may sustain a total loss of the assets in your crypto account.
The market for crypto can be extremely volatile. The price of crypto may be influenced by, among other things, the performance of the economy as a whole; new or amended government regulation; the changing supply and demand relationships for crypto; governmental, commercial and trade programs and policies; interest rates; technological developments; inflation; national and international political and economic events; statements by internet celebrities; social media sentiment; and the prevailing psychological characteristics of the relevant marketplace.
Under certain market conditions, you may find it difficult or impossible to liquidate a crypto position quickly at a reasonable price. This can occur, for example, when the market for a particular crypto asset suddenly drops, or if trading is halted due to recent news events, unusual trading activity, or changes in the underlying crypto system. Paxos is not obligated to provide quotes for crypto at any time, and neither Paxos nor Fierce Technology guarantees the continuous availability of quotations or trading for crypto on the Fierce App or the Paxos’ platform. Paxos may in its sole discretion cease quoting crypto and/or cease entering new crypto transactions at any time.
Crypto assets are generated and traded according to the digital network protocols established with respect to such crypto assets. Because crypto assets and the associated digital networks (and related instruments) are inherently digital, the risk of hacking, cyber-attacks and other cybersecurity threats are amplified and omnipresent.
Paxos is responsible for the custody and safekeeping of the crypto in your account. There is a risk that the crypto held by Paxos on behalf of you and other customers will be lost, stolen or damaged and that you will bear some or all of the impact of such events. There are many different scenarios that could result in the loss, theft or damage of crypto held by Paxos, including fraudulent, malicious or negligent acts by employees, agents or service providers of Paxos; cyberattacks or other attacks or thefts by third parties; natural disasters such as fires, floods, hurricanes and earthquakes; acts of God; acts of war or terrorism; riots or other civil unrest; and failures of or errors by computer systems or software.
Legal and Regulatory Risk
Crypto exists in uncertain and rapidly developing legal and regulatory landscapes and are subject to evolving government oversight by various federal, state, local and foreign regulators. Legislative and regulation or actions (or lack thereof) at any level of crypto or crypto exchanges, which could include restrictions or bans on crypto ownership or transactions in one or more jurisdictions, may adversely affect the use, transfer, exchange, value or market price of crypto. Moreover, due to the novelty of the asset class and the somewhat patchy regulatory oversight of crypto markets, fraud and market manipulation are not uncommon in such markets.
Crypto Trading Requires Knowledge of Crypto Markets
Trading in crypto requires knowledge of crypto markets. In attempting to profit through crypto trading you must compete with traders worldwide. You should have appropriate knowledge and experience before engaging in any crypto trading. Any individual crypto asset may change or otherwise cease to operate as expected due to changes to its underlying technology or changes resulting from a cyber attack. These changes may include, without limitation, a “fork,” a “rollback,” an “airdrop,” or a “bootstrap.” Such changes may dilute the value of an existing crypto position and/or distribute the value of an existing crypto position to another crypto. Paxos retains the right to support or not support any of these changes. Any crypto may be cancelled, lost or double spent, or otherwise lose all or most of its value, due to forks, rollbacks, attacks, or failures to operate as intended. The nature of crypto means that any technological difficulties experienced by Paxos may prevent the access of your crypto. Any insurance or surety bonds maintained by Paxos for the benefit of its customers may not be sufficient to cover all losses incurred by those customers.
Crypto Holdings are not Covered by FDIC or SPIC
In general, US broker-dealers cannot custody non-securities crypto. Therefore, US brokers seeking to offer their customers the ability to trade crypto must work with another entity (a “Crypto Broker/Custodian”) that is suitably licensed, and with which customers trading crypto maintain separate accounts in their own names. These Crypto Broker/Custodians are not broker-dealers and generally maintain that the cryptocurrencies they offer are not securities. As such, SIPC coverage does not apply to accounts at Crypto Broker/Custodians. Likewise, most Crypto Broker/Custodians are not insured banks, and crypto is not cash, so FDIC coverage does not apply to accounts at Crypto Broker/Custodians.
Crypto Purchases Must Be Fully Funded When Orders Are Submitted
You are responsible for ensuring that there is sufficient cash available in your Available Balance to fully fund your purchase of crypto at the time you submit an order. Orders that are not fully funded will be rejected.
You Will Pay Fees For Trading Crypto
Paxos will charge fees on your crypto trades. Estimated commissions for each trade are displayed on the order entry pages in the Fierce App.
You Are Not Permitted to Short Crypto
Short sales and limit orders of crypto and purchasing crypto on margin are prohibited. The inability to open short crypto positions or place limit orders may negatively impact your ability to protect against trading losses.
The Crypto Available to You Is Limited and Subject to Change
The crypto available for trading in your crypto account is limited. Paxos or Fierce Technology may further limit the available crypto to be traded on the Fierce App at their own discretion and without prior notice to you. A complete list of currently available crypto that may be purchased in your crypto account can be found in the Fierce App.
Risk of Disruption or Interruption of Access to Your Account
Fierce Technology and Paxos rely on computer software, hardware, and telecommunications infrastructure and networking to provide our respective services to you, and without these systems we cannot provide you with access to your account. These computer-based systems and services are inherently vulnerable to disruption, delay or failure, which may cause you to lose access to the Fierce App and/or your crypto account and/or your ability to trade in your crypto account, or may cause Paxos not to be able to provide crypto quotations or trading, or may negatively affect any or all aspects of Paxos’ services. As a result, you may be unable to trade in crypto and may miss an opportunity to purchase crypto before a price increase or sell a crypto before a price increase, which can negatively impact your returns or increase your losses.
Other Risks. Cryptocurrencies are subject to additional risks, including but not limited the following:
(i) cryptocurrencies are not legal tender and not backed by the government;
(ii) once executed, a crypto transaction may be irreversible, and accordingly, losses due to fraudulent or accidental transactions may not be recoverable;
(iii) some crypto transactions shall be deemed to be made when recorded on a public ledger (e.g., a blockchain), which is not necessarily the date or time that the customer initiates the transaction;
(iv) the value of cryptocurrency may be derived from the continued willingness of market participants to exchange fiat currency for cryptocurrency, which may result in the potential for permanent and total loss of value of a particular cryptocurrency should the market for cryptocurrencies collapse;
(v) there is no assurance that a person who accepts a cryptocurrency as a payment today will continue to do so in the future;
(vi) the volatility and unpredictability of the price of cryptocurrency relative to fiat currency may result in significant loss over a short period of time;
(vii) the value of a particular cryptocurrency may fall at any time, if, for example a new, better cryptocurrency is created or software developers make unexpected changes to how the cryptocurrency works;
(viii) as cryptocurrency is a digital currency and therefore intangible, this means that like any other digital system, cryptocurrencies are at risk of fraud, cyber attacks, and being affected by technical problems or difficulties which could result in you losing your cryptocurrencies or delaying or preventing your ability to access or use them; and
(ix) any bond or trust account maintained by Paxos for the benefit of its customers may not be sufficient to cover all losses incurred by its customers.
Other Important Information Covered by Paxos T&Cs
Paxos does not currently offer in-kind withdrawals or transfers for crypto assets in your account, but such functionality may be offered in the future. As such, to effect a withdrawal of crypto assets, or in the event that Fierce Technology discontinues the Platform or your Account is closed or terminated for any other reason, you must liquidate such crypto assets, convert such crypto assets to fiat currency, and withdraw such fiat currency. Neither Fierce Technology nor Paxos will be liable to you for any losses that you may incur as a result of such conversion of crypto assets to fiat currency in connection with the closure of your account. Please see the Paxos T&Cs for more information.