Digital currencies are new technologies that often work differently to your prior experience. They entail various risks that you should understand. We have highlighted some of those risks below.
Bitcoin and Ethereum transactions are irreversible. If you send Bitcoin or Ether (BTC or ETH) to an incorrect address, or send the wrong amount of BTC or ETH, you cannot get it back. Luno will not be liable for executing a transaction if the instruction relates to an incorrect BTC or ETH address.
Before buying or selling BTC or ETH, you should educate yourself about digital currencies. Buying and selling BTC or ETH entails risks and could result in a complete loss of your funds. Please ensure that you fully understand the risks involved and do not invest money that you cannot afford to lose.
Bitcoin and Ethereum are not backed by any entity. Neither Luno nor anyone else has an obligation to buy back your BTC or ETH in the future. Additionally it is very important to understand the following risks:
- BTC and ETH are not legal tender and are not backed by any government. Accounts and value balances are not subject to any government backed deposit insurance or any other government protections;
- Legislative and regulatory changes or actions at state or international level may adversely affect the use, transfer, exchange, and value of BTC and ETH;
- Transactions in BTC and ETH are generally irreversible, and, accordingly, losses due to fraudulent or accidental transactions may not be recoverable;
- BTC and ETH transactions shall be deemed to be made when recorded on a “blockchain” ledger, which is not necessarily the date or time that you initiate the transaction;
- BTC and ETH are derived from the continued willingness of market participants to exchange local currency for BTC and ETH, which may result in the potential for permanent and total loss of value, should the market for BTC or ETH disappear;
- There is no assurance that a person who accepts BTC or ETH as payment today will continue to do so in the future;
- The volatility and unpredictability of the price of BTC and ETH relative to local currency may result in significant loss, or tax liability, over a short period of time;
- The nature of digital currency may lead to an increased risk of fraud or cyber attack;
- The nature of digital currency means that any technological difficulties experienced by a service provider may prevent access to or use of your BTC or ETH.