Version 1.1 - Last updated: 20 November 2025
This Risk Disclosure provides clients of Knaken Cryptohandel B.V. (“Knaken”) with a clear and transparent overview of the risks associated with crypto services. This document forms an integral part of Knaken’s Terms and Conditions and applies to all crypto transactions, including buying, selling, converting, depositing, withdrawing and using vault (staking) services.
Trading and holding crypto-assets involves significant risk and may not be suitable for all clients.
Financial Risks
- Market Risk - Crypto-asset prices are highly volatile. You may lose the full value of your holdings in a short time.
- Liquidity Risk - While some major cryptoassets like Bitcoin and Ethereum have high liquidity, others, particularly newer or smaller tokens, may have very low trading volumes. This can make it difficult to sell your assets at a desired price, especially during periods of market stress, and could result in significant losses.
- No Guarantee of Returns - Trading is speculative; past performance does not predict future results.
- Tax Risk - Tax treatment varies by jurisdiction and may change; you are responsible for your obligations.
Security and Operational Risks
- Cybersecurity Risk - Despite safeguards, hacking, phishing, malware, or device compromise can lead to loss or theft.
- Operational and Technology Risk - Software defects, outages, or connectivity failures may impact access, execution, or withdrawals.
- Fraud and Financial Crime Risk - Scams and manipulation occur despite controls and monitoring.
Crypto-Specific and Regulatory Risks
- Regulatory Risk - Laws and supervisory guidance evolve; availability, transferability, or legality of assets or features may change without prior notice.
- Non-notified Whitepaper Risk (very important) - If an asset does not have a MiCAR-notified crypto-asset whitepaper, issuer and disclosure risks are elevated. Rights, obligations, technical features, governance, and performance assumptions may be insufficiently described, outdated, or change without notice. Service availability (listing, deposits, withdrawals, exchange) may be restricted, suspended, or terminated at short notice to comply with law or supervisory expectations.
- Token Design and Technical Risk - Complex or experimental designs can behave unexpectedly; review available documentation before transacting.
- Blockchain and Consensus Risk - Forks, bugs, validator behaviour, or consensus failures can affect usability, value, or availability.
- Collateralization/Reserve Risk - For assets claiming backing or stabilization, reserves may be insufficient, encumbered, or opaque, compromising stability or redeemability.
- Jurisdictional Restrictions - Services may be unavailable or limited in certain countries; ensure compliance with your local laws.
Staking (Vault) Risks
- Reward Variability Risk — Staking rewards depend on blockchain-level performance and may fluctuate. Knaken cannot guarantee the receipt or amount of rewards.
- Fixed-Term Display vs. Actual Rewards — Vaults show a fixed annualized reward percentage for the selected term. This represents the expected return if underlying network conditions remain stable. However, network failures, slashing events or changes by the staking provider may reduce or eliminate actual rewards.
- Illiquidity During the Lock Period — Assets staked for a fixed period cannot be withdrawn early.
- Sub-custody Risk — For some assets, staking may involve transferring assets to a third-party provider. Although Knaken only works with licensed entities (e.g., Kraken), sub-custody introduces additional counterparty and operational risks.
- Restaking Risk — Rewards that are restaked remain your property, but the restaked amount inherits the same lock period and associated risks.
Deposit, Settlement & Withdrawal Risks
- Settlement Timing Risk (new – based on your lawyer’s remark)
When you deposit crypto-assets or convert between crypto and fiat, your transaction may display as “completed” in the Knaken interface before the final blockchain settlement has been processed into the Stichting’s omnibus wallets. Even though settlement may take additional time depending on network conditions:
- Knaken and Stichting always hold sufficient crypto-assets in aggregate in the omnibus wallets to honour withdrawals.
- You can request a withdrawal even while the technical settlement is still being finalized.
This may result in temporary timing differences, but not in insufficient balances for client withdrawals.
Important Notices
- No Advice - Information from Knaken is not investment, legal, tax, or accounting advice; seek professional advice where appropriate.
- Understand the Asset - Review asset information and, where available, the whitepaper or issuer documentation before transacting.
- Updates - We may update this disclosure to reflect changes in law, guidance, market conditions, or our services. The most recent version applies.
