Risk Warning Associated With Crypto-Asset Exchange Services

At Due Network, S.L. (“Due”), the security of our clients and their assets is our highest priority. To this end, we have implemented robust risk management procedures. However, the use of our platform may involve risks that are beyond our control, and Due cannot accept liability for them.

Important warning: Due exclusively offers crypto to crypto and crypto to fiat exchange services for the stablecoins USDC, pegged to the US dollar, and EURC, pegged to the euro. While their design seeks to maintain a 1:1 parity with the reference currency — significantly reducing their volatility compared to other crypto-assets — this risk does not disappear entirely. You should carefully consider whether exchanging these assets is appropriate for you, taking into account your financial situation and objectives.

This statement is intended to provide you with a general overview of the main risks associated with the use of our platform, and does not reflect the full range of risks that may exist. It should not be considered financial, investment, tax, or legal advice. It is your responsibility to seek independent professional advice.

Residual value risk in stablecoin exchange

Although USDC and EURC are stablecoins designed to maintain parity with the US dollar and the euro respectively, their value may be affected by exceptional circumstances. In situations of market stress or issuer-related problems, their peg to the reference currency could break temporarily, potentially resulting in losses on exchange.
USDC and EURC are issued in the European Union by Circle Internet Financial Europe SAS, a French company authorised as an Electronic Money Institution (EMI) by the Autorité de Contrôle Prudentiel et de Résolution (ACPR), the French banking regulator, under the MiCA Regulation with effect from 1 July 2024. Their stability depends on the solvency of the issuer and on the sound management of the backing reserves. Changes in the issuer's financial position or in the reserve assets could affect parity with the reference currency. It is essential that you assess whether these types of operations are appropriate given your risk profile, financial objectives, tax situation, and personal circumstances.
The crypto-assets covered by this notice are not protected by client protection mechanisms such as the Deposit Guarantee Scheme or the Investor Compensation Scheme.
Crypto-asset prices are formed in the absence of mechanisms that ensure their correct determination, such as those present in regulated securities markets.
While USDC and EURC generally benefit from high market liquidity, in situations of high demand or market disruption it may be more difficult to execute exchanges at optimal conditions, which could result in differences in the exchange rate applied.

Technology-specific risks

Distributed ledger technology is still at an early stage of maturity, with many of these networks having been recently created.
Transaction recording on distributed ledger technology networks operates through consensus protocols that may be vulnerable to attacks seeking to alter that record. If such attacks were to succeed, there would be no alternative record to support those transactions or the balances associated with public keys, and the total loss of crypto-assets could occur.
The anonymity features that crypto-assets can offer make them a target for cybercriminals, who, upon stealing credentials or private keys, may transfer crypto-assets to addresses that make their recovery difficult or impossible.
Due does not provide a crypto-asset custody service. USDC and EURC assets are transferred directly during the exchange process to the wallet designated by the client. Nevertheless, the client assumes responsibility for the security of their own digital wallet and the passkeys associated with the addresses they use in exchange operations.
The technology underlying crypto-assets, including smart contracts and other decentralised platforms, is still evolving and may present faults or vulnerabilities.
There is a risk that platforms and systems may suffer cyberattacks that result in the irreversible loss of assets or data.
Due uses passkeys as the authentication method. Unlike passwords, the private key associated with your account never leaves your device or is transmitted over the network, which eliminates the risk of credential theft through phishing or interception techniques. However, if a third party gains physical access to your unlocked device, or if you lose your device without having set up a recovery method, you could lose access to your account or expose your assets. It is your responsibility to keep your device protected with biometrics or a strong PIN and to always have an active recovery method in place.
It is the user's responsibility to keep their device protected and not to share it with third parties. The loss or theft of a registered device, or unauthorised physical access to it, could allow a third party to operate on behalf of the account holder.
Impersonation (phishing) and deception (social engineering) attempts are common. If in any doubt about a communication, access your account directly from the official website.
Crypto-assets may be the target of technical attacks affecting their network or operation, which Due has no capacity to prevent.

Risks specific to the crypto environment

In transfers involving external wallets, errors may occur in the automatic recording of operations by network nodes, affecting balance updates.
Although USDC and EURC are issued by an established issuer, there is a theoretical risk that the issuer may cease operations or discontinue one of these assets, which could temporarily affect their availability or parity with the reference currency.
Technical changes known as "forks" may alter the operation or identity of certain crypto-assets.
Groups of users may coordinate buying or selling movements that generate sharp price fluctuations.
Due may operate with counterparties or liquidity providers when executing USDC and EURC exchanges, but has no control over their financial stability. A default by these counterparties may cause delays or cancellations in the execution of operations.
When exchanging USDC and EURC, the exchange rate applied may differ from the market reference rate at the time the operation is requested, particularly during periods of high volatility or low liquidity
USDC and EURC claim to be 100% backed by reserve assets held by their EU issuer, Circle Internet Financial Europe SAS. Due accepts no responsibility for the accuracy or sufficiency of said reserves, as these depend solely on the issuer. Clients may consult the audit reports published by Circle to verify the state of the reserves.
Prices may change rapidly. Operations could be executed at values different from those initially displayed, particularly in volatile or low-liquidity environments.
Crypto-asset exchange operations may have tax implications depending on the client's jurisdiction. Due may be required to report information to tax authorities pursuant to applicable regulations. We recommend consulting a tax adviser before operating.

Legal risks

The acceptance of crypto-assets as a means of exchange is still very limited and there is no legal obligation to accept them.
When the service provider is not located in a European Union country, the resolution of any dispute could be costly and may fall outside the jurisdiction of the Spanish authorities.
Due does not custody crypto-assets or have access to its clients' digital wallets. The exchanged USDC and EURC assets are transferred directly to the wallet address provided by the client, who retains exclusive control over their passkeys at all times. The security and availability of those assets depend solely on the client and on the proper maintenance of their digital wallet and passkeys.
Regulatory or legislative changes, including the ongoing development of MiCA implementing rules, could affect Due's operations or the availability of USDC and EURC, and may even lead to the restriction or temporary suspension of the exchange service.
Due does not provide financial, legal, tax, or accounting advice. The provision of the exchange service does not constitute a personalised recommendation.
The assets offered are not covered by investment guarantee schemes, as they are not considered regulated products under many legal frameworks.
Regulatory Risk (MiCA): The regulatory framework for crypto-assets in Europe, such as the MiCA Regulation, is constantly evolving. Changes in laws, directives, or regulatory policies could affect the viability, price, and liquidity of crypto-assets or limit the availability of certain services.
Crypto-assets Non-Compliant with MiCA: Some crypto-assets available on the market may not fully comply with the requirements of the MiCA Regulation. Trading in such assets could carry greater risk, particularly with regard to transparency, disclosures, and the possibility of future sale.
Stablecoin Risks (MiCA): USDC and EURC, the only crypto-assets exchanged by Due, are electronic money tokens (EMTs) issued in the EU by Circle Internet Financial Europe SAS, authorised as an Electronic Money Institution by the French ACPR since 1 July 2024. However, the maintenance of this authorisation is subject to the issuer’s continued compliance with MiCA obligations. Should Circle Internet Financial Europe SAS lose or have its authorisation suspended, the assets could present a greater risk in terms of redemption and transparency.
Transfer Services Risk (Travel Rule): In the context of the crypto-asset exchange service provided by Due, and in compliance with European anti-money laundering regulations, Due may be required to request information on the origin of funds and the ownership of the digital wallets used. Failure by the client to meet these requirements may result in the blocking, delay, or cancellation of the exchange operation.

This notice is for informational purposes only and does not replace the need for a personal assessment prior to carrying out any exchange operation. We advise acting prudently, staying informed about the characteristics of USDC and EURC, and seeking professional advice when necessary.

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