BUMBA Risk Disclosures

Preliminary Notes

You should not trade or invest in Virtual Assets unless you fully understand the highly speculative nature, complexity, and inherent risks of such transactions, as well as your exposure to financial losses. Only individuals with adequate knowledge of the economic, legal, and other risks associated with Virtual Assets—and who are willing to assume them—should engage in trading these assets.

Below, we outline the risks of trading Virtual Assets on the Exchange operated by Rules Holdings BVI Ltd. ("BUMBA" or "the Platform"). Note that additional risks may exist that are not foreseen or identified in this statement. You must carefully evaluate whether your financial situation and risk tolerance are suitable for Virtual Asset trading.

BUMBA does not provide trading recommendations, investment advice, or financial consultancy. This means we will not offer personal recommendations or guidance on the merits of buying, selling, or engaging in any investment transactions, their potential tax implications, or the composition of your account. Consequently, you must rely on your own judgment when deciding to enter or exit a transaction.

The risks described below may result in the loss of Virtual Assets, a decrease or total loss of their value, the inability to access or transfer these assets, the inability to trade them, the loss of financial benefits available to other holders, or other financial losses.

General Risks Associated with Virtual Assets

1. Total Loss

A Virtual Asset may lose its entire value, resulting in the total loss of your investment. Such losses can occur over a very short period.

2. Not Legal Tender & Payment Acceptance

Virtual Assets are not considered legal tender and are not backed by any government. There is no guarantee that a counterparty accepting a Virtual Asset as payment today will continue to do so in the future. Regulatory changes may also prevent a counterparty from accepting Virtual Assets as a means of payment.

3. No Governmental Backing

There is no central bank or equivalent authority that can take corrective measures to protect the value of Virtual Assets during crises. They rely solely on technology and mutual trust, significantly influenced by the economic model developed by their community and developers. Changes in these fundamentals may lead to price collapse.

4. Liquidity

Virtual Asset markets may occasionally become illiquid, meaning there may be a lack of participants willing to trade at any given time. Markets with low liquidity pose a higher risk of losses, as assets may experience high volatility, making it difficult to exit positions except at unfavorable prices.

5. Volatility

Virtual Asset prices can fluctuate drastically—whether in Virtual Asset/fiat pairs or Virtual Asset/Virtual Asset pairs. Sudden and unpredictable price changes can occur at any time, resulting in significant losses.

6. Irrational Market Forces

Virtual Assets may be affected by irrational loss of confidence or market forces (e.g., misleading statements or rumors), leading to a collapse in demand without real justification. Many Virtual Assets lack intrinsic value, relying solely on holder confidence.

7. Complexity

The features, functions, operation, usage, and other properties of a Virtual Asset—as well as the software, networks, protocols, systems, and technologies (including blockchains, where applicable) involved in their issuance, transfer, and transactions—can be complex and difficult to understand or assess.

8. Pricing & Market Valuation

The price of Virtual Assets traded on an exchange is based on market data from that platform and may differ from prices on other exchanges. Prices may fluctuate at any time, causing your investment value to decrease suddenly. Assets may experience extreme price swings or become worthless.

9. Financial Crime Risk

Virtual Assets offer greater anonymity, making them harder to trace than traditional assets. This increases the risk of their use in illicit activities, such as fraud, money laundering, terrorism financing, or dealings with sanctioned entities.

10. Cyberattack Risk

Due to their intangible nature and heavy reliance on technology, Virtual Assets are susceptible to cyberattacks and theft. While BUMBA’s custodian provider has insurance against such risks, assets may be targeted due to the architecture of their networks.

11. Technological Risks

Confidence in a Virtual Asset may collapse due to unexpected changes imposed by developers or regulators, the creation of superior alternatives, or inflationary/deflationary spirals. Technical issues—such as compromised anonymity, asset loss or theft, or transaction impediments—can occur.

12. Irreversible Transactions

Each Virtual Asset has a unique deposit address. If a user mistakenly sends other assets to this address, they will be permanently lost. Similarly, if a withdrawal address is incorrectly entered, the transaction is irreversible.

13. Regulatory Risk

Regulatory changes or actions by authorities such as the FSC or other government bodies may negatively impact the access, use, transfer, exchange, or value of Virtual Assets.

14. Tax Risk

Profits from Virtual Assets are subject to taxation based on the user's country of residence and may impact their tax situation. Users are encouraged to seek financial, tax, or legal advice.

Risks Associated with Trading on the Platform

1. Transaction Execution Risk

BUMBA may conduct additional reviews or monitoring of account registrations or Virtual Asset transactions, which may include requests for extra documentation. This compliance-driven process may delay trading, causing users to miss potential opportunities or expected profits.

2. Internet Trading Risks

Rules Holdings (BVI) Ltd. relies on technology service providers to facilitate platform trading. However, users may be exposed to risks such as hardware/software failures, hacking attempts, or internet connectivity issues, leading to delays, communication errors, or financial losses.

3. Cyberattack Risks

• Phishing Risk on Websites: Attackers may create websites with domain names similar to BUMBA’s and send fraudulent emails or messages to deceive users into entering sensitive information.

• Phishing Risk on Official Accounts: Attackers may impersonate BUMBA employees on social media or chat platforms, tricking users into revealing passwords or sensitive data.

• Remote Hacking Risk: Users may inadvertently download malware, allowing hackers to gain access to their trading accounts and transfer Virtual Assets to unauthorized addresses.

4. Weak Passwords & Brute Force Attacks

Users who set weak passwords may have their accounts compromised by attackers using brute force methods to guess common password combinations.

5. Hard Fork Risk

A "hard fork" results in the creation of a new version of a Virtual Asset from the original. The acceptance of the original asset does not guarantee that BUMBA will automatically support the newly forked asset. In such cases, users may need to withdraw the forked asset to another wallet, and its value may fluctuate significantly during this period.

6. Regulatory Risk (Again)

BUMBA may be subject to regulatory oversight or enforcement actions by the FSC, which could lead to temporary suspension of trading on the platform, impacting users’ ability to access or control their Virtual Assets.

7. Conflict of Interest

Conflicts of interest may arise due to relationships with affiliated entities, investments in listed tokens, or handling of customer funds. BUMBA mitigates these risks through strict governance, asset segregation, prohibition of proprietary trading, internal controls over employee operations, transparent asset listing procedures, and robust cybersecurity measures. Despite these efforts, residual risks remain that may affect platform fairness and effectiveness.