Legal
Risk Disclosure
This Risk Disclosure Statement ("Statement") provides information on the potential risks associated with virtual assets and the use of the services ("Services") provided by 40 ACRES, S.A. DE C.V., a digital asset service provider registered in El Salvador (DASP Registration No. PSAD-0046) and supervised by the Comisión Nacional de Activos Digitales (CNAD), the Superintendencia del Sistema Financiero (SSF), and the Banco Central de Reserva de El Salvador (BCR), trading under the name Lunar Rails ("Lunar Rails", "We", "Us", "Our"). The Services are provided under the digital asset regulatory framework of El Salvador; protections that may exist under the laws of other jurisdictions do not necessarily apply. Lunar Rails may amend this Statement from time to time as appropriate or as required by applicable law or regulation.
Each of our Services carries distinct risks. This Statement describes the general risks associated with using our Services and does not explain all risks or how they relate to your personal circumstances. The list is not exhaustive and there may be additional risks we have not anticipated. The purpose of this Statement is to highlight material risks involved in dealing in virtual assets and is not a comprehensive analysis of each individual risk.
It is important that you fully understand the risks involved. We encourage all users to read and understand this Statement before trading virtual assets or using our Services. By using our Services, you acknowledge and accept the risks set out in this Statement and any other risks associated with dealing in virtual assets. You are responsible for making an independent assessment of the risks associated with investing in virtual assets and for making investment decisions based on your own assessment, resources, research, and experience. You are solely responsible for determining whether any investment, strategy, or service is suitable for you. Lunar Rails shall not be liable for any loss, claims, or damages (whether direct or indirect) arising from or in connection with any of the risk events described below.
Capitalised terms not defined in this Statement have the meaning given to them in the Lunar Rails Terms of Use / Client Agreement, which should be read in conjunction with this Statement.
Risk Factors
Virtual assets are not legal tender
The majority of virtual assets are not backed by any central government and are not recognised as legal tender. There is no guarantee that vendors or individuals who currently accept virtual assets will continue to do so. The acceptance and value of virtual assets may fluctuate and are subject to market dynamics.
General market risk
The market for virtual assets is relatively new and constantly developing. Virtual asset trading is subject to high market risk and price volatility. Changes in value may be significant and may occur rapidly and without warning. Whether the market for any virtual asset will move up or down, or whether a virtual asset will lose all or substantially all of its value, is unknown. Past performance is not a reliable indicator of future performance. Investment in virtual assets involves significant risk and you may lose a proportion or all of your investment. You should not invest funds that you are not prepared to lose in their entirety.
High price volatility
The value of virtual assets is derived entirely by market forces of supply and demand. The market for virtual assets is generally more volatile than markets for traditional fiat currencies and commodities. Prices can increase or decrease significantly within a single day. Virtual assets are not backed by a central bank or national organisation. In most cases, the price of a virtual asset depends entirely on the value market participants place on it, and any loss of confidence may significantly affect its value.
Irreversible transactions and custody
Due to the decentralised nature of virtual assets, transfers may be irreversible. Losses arising from fraudulent or accidental transactions may not be recoverable. Users of third-party service providers for custody, trading, lending, or staking may not directly control the virtual assets held through such providers. Custodial arrangements for virtual assets carry unique risks and uncertainties not present in arrangements for conventional assets, including significant legal uncertainty regarding how such arrangements would be treated in an insolvency, fraud, loss, or theft scenario.
Delays in transfers
All transactions are subject to screening in line with applicable regulatory standards and legislation. Certain transaction patterns or sizes may be subject to enhanced scrutiny, which could result in delays or rejection of transfer requests. Delays may also be caused by internal compliance and AML procedures, or by third-party systems outside our control. We do not accept responsibility for delays caused by third parties where we have provided prior notification of a potential delay.
Liquidity risk
Markets for virtual assets have varying degrees of liquidity. Liquidity risk exists when particular investments are difficult to purchase or sell, potentially preventing you from exiting positions at an advantageous price or at all. Thin markets can amplify volatility and cause significant delays in executing trades. Illiquidity may stem from market conditions, regulatory interventions, technological challenges, or unanticipated events, and could affect your ability to initiate or close positions.
Liquidity slippage risk
We work to monitor and maintain liquid order books. However, market conditions may create liquidity constraints that cause severe devaluation of an asset or significant price slippage when executing market orders.
Public record of transactions
Given the nature of virtual assets, some transactions may not be private and may be recorded on public, decentralised databases.
Market manipulation and fraud
Manipulative practices in the virtual asset market can distort liquidity or trading activity for a specific asset and affect its pricing. The market is also subject to an increased risk of fraud, including Ponzi schemes, pump-and-dump schemes, and other targeted manipulation. Such schemes may result in the loss of virtual assets or a significant reduction in their value, and you may not benefit from legal protections.
Cyber-attack risk
Virtual assets are frequently targeted by hackers and criminals. This includes attacks on the protocols or technologies on which our Services depend, including distributed denial-of-service attacks, sybil attacks, phishing, social engineering, hacking, malware, double-spending attacks, and spoofing. The nature of virtual assets and distributed ledger technology may increase the risk of such attacks. Attacks may result in the loss of your virtual assets and legal protections may not apply.
Account security risk
Unauthorised access to your account credentials by third parties may result in access to your account and virtual assets. This may occur through carelessness, forgetfulness, or a third party obtaining control of a device you use in connection with your account. It is not possible to eliminate all security risks. You are responsible for keeping your account login details safe and secure, and may be liable for transactions conducted through your account whether or not authorised by you.
Unauthorised access
You must exercise care, due diligence, and responsibility in handling your account credentials. Failure to do so may result in a third party gaining access to your account and personal information. Losses resulting from such access may not benefit from legal protection.
No personal advice
We do not provide personal investment advice in relation to our Services. No communication or information provided by us constitutes investment advice, financial advice, trading advice, or any other form of advice. Any decision to use our Services is made by you. You are solely responsible for determining whether any investment, investment strategy, or related transaction is appropriate for you based on your personal objectives, financial circumstances, and risk tolerance.
Legal and regulatory risk
The legal environment and regulatory status of virtual assets are continuously developing and remain uncertain in many jurisdictions. Changes in laws and regulations by any relevant regulatory authority may materially affect the value, use, transfer, exchange, and accessibility of virtual assets. The classification of virtual assets as property, assets, or rights of any kind may also be unclear or subject to change.
Taxation risk
The tax treatment of virtual assets is uncertain and varies by jurisdiction. You must seek independent tax advice in connection with the acquisition, storage, transfer, and use of virtual assets. Tax consequences may include withholding taxes, transfer taxes, value-added taxes, income taxes, and similar charges. You are responsible for reporting and paying any taxes arising from transactions using our Services. Lunar Rails does not provide tax advice.
Enforcement and regulatory action
We may cease operations in a jurisdiction if regulatory actions or changes to applicable law make it illegal or commercially unviable to operate there. This may result in you losing access to your account or to virtual assets held through our Services.
Third-party custody risk
Holding virtual assets on deposit with any third party in a custodial relationship carries inherent risks, including security breaches, contractual breaches, and risk of loss. You should exercise caution when allowing third parties to hold assets on your behalf.
Recording of transactions on public ledgers
Some virtual asset transactions may be deemed to have occurred at the time they are recorded on a public ledger, which may differ from the time you initiated the transaction. In some circumstances, this may render cancellation ineffective.
Software and protocol risk
Our Services are based on blockchains or other distributed ledgers. Any malfunction, breakdown, or abandonment of an underlying blockchain may have a material adverse effect on our Services. Advances in cryptography or technology could also present risks by undermining the cryptographic or consensus mechanisms that blockchains depend on.
Mining attack risk
Some blockchains are susceptible to mining attacks, including double-spend attacks, majority mining power attacks, selfish-mining attacks, and rare condition attacks. A successful attack may affect the proper execution and sequencing of transactions carried out through our Services.
System and infrastructure risk
We may experience system interruptions or delays due to outages, power loss, telecommunications failure, disasters, cyberattacks, system malfunctions, or other events. We do not guarantee that our Services will be uninterrupted, error-free, or available at any particular time, and Services may be subject to unplanned outages or network congestion.
Third-party outages
We may deliver our Services using third-party providers. While we monitor the performance of these providers, an outage at a partner could affect our service to you in the short term.
Third-party risk
Third parties including payment service providers, liquidity providers, custodians, IT service providers, and banking partners may be involved in delivering our Services. You may be subject to the terms and conditions of these third parties. We shall not be responsible for losses caused by third parties to the extent permitted by applicable law.
Information and connectivity risk
Using an internet-based system carries risks including hardware failure, software failure, internet connectivity issues, and the risk of malicious software. We do not control signal power, routing, or the reliability of your connection. Failure of any of the foregoing may result in transactions not being executed as instructed, or not executed at all. Electronic communications may fail, be delayed, or be unsecured.
Unanticipated risks
The risks described in this Statement are neither comprehensive nor exhaustive. You remain responsible for understanding the technological, economic, and legal nature of virtual assets and for managing your exposure in accordance with your own risk appetite.
Please read this Statement carefully. The risks listed above are indicative and not exhaustive.