Risk Disclosure

Investing in private companies is risky. An Issuer may fail to execute its business plan, run out of cash or be liquidated, in which case shareholders are usually the last to be repaid and may recover nothing. Investments made through Coin District are not covered by any deposit or investor compensation scheme.

Securities of unlisted companies are not traded on a regulated stock exchange. The Coin District secondary market allows investors to trade among themselves, but there is no guarantee that a buyer will be available, at the time you want or at the price you expect. Some Offerings also include lock-up periods during which Tokens cannot be sold. Tokens bought on the Launchpad can only be sold once the asset is listed on the secondary market; until then they cannot be sold.

Companies often raise money in several rounds. Each new issue of shares reduces your percentage of ownership, and later investors may obtain preferential rights (liquidation preference, anti-dilution, board seats) that rank ahead of yours.

The price of an Offering is set by the Issuer and is not the result of a market. Private companies publish less information than listed companies, and financial projections are, by nature, uncertain. Read each Issuer’s key information document and prospectus before investing.

Target returns and dividend policies displayed on the Platform are objectives, not promises. Growing companies usually reinvest their profits, and distributions may be reduced or suspended at any time.

Tokenization changes how your securities are recorded, not the underlying risk of the company. It adds technology-specific risks:

• Smart contract risk — a flaw in the code could disrupt transfers or corporate actions, despite audits;
• Key management — if you use an external wallet and lose your private keys, access to your Tokens may be lost;
• Network risk — congestion, outages or changes to the underlying blockchain may delay transactions;
• Regulatory risk — changes in the law may affect how Tokens can be held, traded or taxed.

Offer prices on the secondary market are set by individual sellers, can vary widely when few offers are listed, and may differ significantly from the Issuer’s last valuation. Because the market is peer-to-peer, the supply of each Token is limited to the offers listed by other holders: you may be unable to buy the quantity you want, and your own offer may never find a buyer.

Deposit rates are variable and not guaranteed. Stablecoins may lose their peg to the currency they track. When you borrow, your collateral is monitored through a health factor: if its value falls and the health factor drops below 1, your collateral may be partially or fully liquidated without prior notice. Only currencies such as USDC or ETH earn interest; project tokens earn none. Tokens deposited as collateral back borrowing up to 50% of their value and can be withdrawn only once no loan depends on them.

When you invest through a tokenized fund or a syndicate, you depend on the skills of the manager or syndicate lead. Management fees and carried interest reduce your net return, and redemption may be restricted or suspended. A lead’s past track record does not predict future performance.

CDNT is a utility and governance token. It does not give any right to the capital or profits of Coin District, has no guaranteed value and may be highly volatile or have no market at all. Rules for earning CDNT are set out on the Academy and Referral Program pages and in the CDNT Airdrop Terms.

Spreading your investments across several companies, sectors and time periods reduces — but does not eliminate — the risk of loss. We recommend that private company investments represent only a limited share of your total savings. The Academy module on risk and diversification explains how to build a balanced approach.

Tax treatment depends on your personal situation and may change. Coin District does not provide tax advice; consult a qualified advisor if needed.