The following is a non-exhaustive disclosure of principal risk factors which are considered to be material by the company in connection with the private placement event and the acquisition holding. Participants should consider these risk factors alongside all other information provided in the White Paper and are advised to consult with their own professional advisers (including their financial, accounting, legal, tax, technical or other advisers and experts) before deciding to obtain Diagon native tokens. In addition, Participants should be aware that the risks described herein may combine and thus intensify one another.
The Company believes that the following risk factors may even affect its own business, as well as the external valuation of Diagon (which external valuation is beyond the scope and purpose of the reason behind the Diagon Platform and the Company’s Business). Most of these risk factors are contingencies that may or may not occur and the Company is not in a position to predict the likelihood of such contingency occurring. By acquiring, holding, and using the Diagon tokens, the Participant expressly acknowledges and assumes the following risks:
General Suitability of token acquisition: The acquisition of Diagon tokens from the Company is only suitable for financially sophisticated persons who are capable of evaluating the merits and risks of such an acquisition, or other persons who have been professionally advised with regard to the token acquisition and who have sufficient financial resources to be able to bear any losses that may arise therefrom (which may be equal to the whole amount spent in connection with the token acquisition). Such an acquisition should not be seen as an investment or a financial asset. The Participant hereby understands that he is responsible for setting up the Wallet with a third-party provider to hold Diagon and he is responsible for implementing reasonable measures for securing the Wallet. Accordingly, loss of requisite private key/s associated with the Wallet holding Diagon will result in loss of such Diagon and any other cryptocurrencies and/or tokens held within.
Moreover, any third party that gains access to such private key/s, including by gaining access to login credentials of the Wallet that the Participant uses, may be able to misappropriate the participant’s Diagon tokens. Any error or malfunction caused by or otherwise related to the Wallet that the Participant chooses to receive and hold the Diagon tokens including the Participant’s own failure to properly maintain or use such wallet or caused as a result of the choice of third party provider for the wallet may also result in the loss of such Diagon tokens. Additionally, the Participant’s failure to follow precisely the procedures set forth in the terms for acquiring and receiving Diagon tokens including but not limited to, the provision of the wrong Wallet address for receiving the Diagon tokens may also result in the loss of such tokens.
Risk of mining attacks as with other decentralized cryptographic tokens based on the Ethereum protocol, (ERC20 tokens): Diagon is susceptible to attacks by miners in the course of validating Diagon transactions on the Ethereum blockchain, including, but not limited, to double-spend attacks, majority mining power attacks, and selfish-mining attacks. Any successful attack presents a risk to the Diagon.io Platform and/or Diagon, including but not limited to, accurate execution and recording of transactions involving Diagon.
Risk of hacking and security weakness: Hackers or other groups or organizations may attempt to interfere with Diagon in a number of ways, including, but not limited to denial of service attacks, Sybil attacks, spoofing, smurfing, malware attacks, or consensus-based attacks, and any such similar events which could have an impact on Diagon, the Diagon.io Platform and the Services the Company may offer from time to time.
Risk of a security weakness in the Smart Contract, Website, and Diagon Source Code or any associates software and/or Infrastructure: There is a risk that the Smart Contract, Website, the Diagon platform, and Diagon may unintentionally include weaknesses or bugs in the source code interfering with the use of or causing the loss of Diagon; the source code of the Website is open and could be updated, amended, altered or modified from time to time. The Company is unable to foresee or guarantee the precise result of an update, amendment, alteration, or modification. As a result, any update, amendment, alteration, or modification could lead to an unexpected or unintended outcome that adversely affects Diagon and/or the Website. As a result, Diagon may be lost. Risk of no Listing or low/no liquidity Diagon is intended to be used solely for the Diagon platform and the Company will not support or otherwise facilitate any secondary trading on an exchange or the secondary market or the external valuation of Diagon, which are all beyond the scope and purpose of the Diagon Platform.
This restricts the contemplated intended use of Diagon only to the platform and could therefore create illiquidity risk with respect to Diagon that the Participant owns. Even though there are currently online services available that enable the exchange of cryptographic tokens with other such tokens or even enable the exchange of cryptographic tokens for fiat money, there are no warranties and/or guarantees that Diagon will be made available for exchange with other cryptographic tokens and/or fiat money, and no guarantees are given whatsoever with regard to the capacity and/or volume of such exchange/s. It shall be explicitly cautioned that such exchange, if any, might be subject to poorly understood regulatory oversight, and the Company does not give any warranties in regard to any exchange services providers. Users including the Participant, if applicable, might be exposed to fraud and failure affecting those exchanges. In any case, it is not the Company’s aim to enable the exchange of Diagon for other cryptographic tokens or for fiat currency and it shall therefore not commit to any endeavors to list Diagon on such exchanges or any secondary markets.
Risks of an eventual unfavorable fluctuation of ETH or Diagon’s value: The Diagon.io Platform is intended to be financially self-sufficient and self-financing after the Private Placement Event and the Company commits to have no specific interest in the market value of Diagon. Nevertheless, if the value of BTC, ETH, and/or Diagon fluctuates, the Company may not be able to fund development to the extent necessary, or may not be able to develop or maintain the Diagon.io Platform in the manner that it intended. In addition to the usual market forces, there are several potential events that could exacerbate the risk of unfavorable fluctuation in the value of ETH or Diagon including another DAO-like attack on the Ethereum network, or significant security incidents or market irregularities at one or more of the major cryptocurrency exchanges.
Risk of Malfunction in the Ethereum Network or any other Blockchain and of Competing Platforms: It is possible that Diagon is interacting with malfunctions in an unfavorable way, including but not limited to one that results in the loss of Diagon or prevents their use on the Diagon.io Platform. It is possible that alternative platforms could be established that utilize the same open-source code and protocol underlying the Diagon.io Platform and attempt to facilitate services that are materially similar to the Diagon.io Platform. The Diagon Platform may compete with these alternatives, which could negatively impact us, including the utility of Diagon for use of the Diagon platform 1.1 01 Considerations 9
Risk of Uninsured Losses Unlike bank accounts or accounts at some other financial institutions: Diagon is uninsured unless the Participant specifically obtains private insurance to insure them. Thus, in the event of loss of Diagon or loss of Diagon’s value, there is no public insurer, such as the Investor Compensation Scheme or private insurance arranged by the Company to offer recourse to the participant. The risk associated with uncertain regulations and enforcement actions The regulatory status of tokens in general, Initial Token, Private Placement Event, and distributed ledger technology is unclear or unsettled in many jurisdictions. It is difficult to predict how or whether regulatory authorities may apply existing regulation with respect to such technology and its applications, including the Diagon.io Platform and the Diagon ecosystem. It is likewise difficult to predict how or whether legislatures or regulatory agencies may implement regulatory actions or changes to law and regulation affecting distributed ledger technology and its applications, including the Diagon Platform and the tokens. Regulatory actions or changes to law and regulation could negatively impact Diagon and the Diagon platform in various ways, including, but not limited to, a determination that the acquisition, holding and use or disposal and transfer of Diagon constitutes a regulated instrument that requires registration or licensing of those instruments or some or all of the parties involved in the acquisition, contribution, sale and delivery thereof. The Company may cease operations or interrupt the Private Placement Event in a jurisdiction in the event that regulatory actions, or changes to law or regulation, make it illegal to operate in such jurisdiction, or commercially undesirable or no longer viable to obtain the necessary regulatory approval/s to operate in such jurisdiction or to provide the Diagon.io Platform.
Risk arising from Taxation: The tax characterization of Diagon is uncertain. The Participant must seek his own tax advice in connection with purchasing Diagon tokens, which may result in adverse tax consequences to him, including withholding taxes, income taxes, and tax reporting requirements.
Risk of insufficient interest in Diagon and the Diagon.io Platform: It is possible that Diagon and the Diagon.io Platform will no longer be used by a large number of individuals, companies, and other entities or that there will be limited interest in the use of Diagon and the Diagon.io Platform. Such a lack of use or interest could negatively impact the development of the Diagon.io Platform and therefore the potential utility of Diagon.
Internet Transmission Risks: There are risks associated with using Diagon including, but not limited to, the failure of hardware, software, and Internet connections, or other technologies on which the Diagon.io Platform or the use of Diagon relies. Such failures may result in disruptions in communication, errors, distortions or delays when using Diagon and the Diagon.io Platform or the Website.
Risk of Dissolution of the Company: It is possible that, due to any number of reasons, including, but not limited to, a decrease in Diagon’s utility, the failure of commercial relationships, or intellectual property ownership challenges, unfavorable market conditions, and added compliance and regulatory obligations, the use of the Diagon.io Platform may no longer be viable to be offered or the Company may need to cease trading and be dissolved and liquidated.
Risk arising from Lack of Governance Rights Since Diagon do not represent or confer any ownership right or stake, share or security or equivalent rights, intellectual property rights or any other form of participation relating to the Company, all decisions involving the Company will be made by Company at their sole discretion, including, but not limited to, decisions to transfer more Diagon tokens for use, to sell or liquidate the Company. These decisions could adversely affect the utility that the Participant holds.
Risks of Regulatory Operations: The Company and by operation of the Diagon.io Platform, are subject to a variety of domestic and/or EU and international laws, regulations, and directives, including those with respect to privacy and data protection, consumer protection, data security, and others. These laws, regulations, and directives, and the interpretation or application of these laws, regulations, and directives, could change. In addition, new laws, regulations, or directives affecting the Company, the Diagon.io Platform, and Diagon could be enacted, which could impact the utility of Diagon and their use on the Diagon.io Platform. Additionally, the Participants are subject to industry-specific laws and regulations or licensing requirements. If any of the Parties fails to comply with any of these licensing requirements or other applicable laws or regulations, or if such laws and regulations or licensing requirements become more stringent or are otherwise expanded, it could adversely impact Diagon and the Diagon.io Platform, including the Diagon’ utility on the Diagon.io Platform.
The Participant hereby accepts the risk that in some countries Diagon might be considered, now or in the future, a Security Token. In this case, the Company gives no representations, warranties, or guarantees that the Utility Tokens are not considered to be Security Tokens in all countries. The Participant hereby accepts to be solely responsible for the legal, financial and any other risks connected to Diagon as a security in his country and to be the only responsible to check if the holding, using and disposal of Diagon is legal in your country. Also, changes in laws, regulations, and directives governing the Company’s operations may adversely affect their business and consequently the Diagon.io Platform. Any change in the Company’s tax status, or in taxation legislation in Malta or elsewhere, could affect the value of its financial holdings, its business, and the Company’s ability to achieve its business objective and continual commitment to the development of the Diagon.io Platform.
Other Inherent Risks: The Participant understands and accepts the inherent risks associated with Diagon, to the extent not covered elsewhere in the Terms, including, but not limited to, risks associated with: (a) money laundering; (b) fraud; (c) exploitation for illegal purposes; and (d) any other unanticipated risks.
Unanticipated Risks: Cryptographic tokens such as Diagon as well as blockchain are new and untested technology.
In addition to the risks included in the Diagon Documents, there are other risks associated with the Participant’s acquisition, holding, and use of Diagon, including some that the Company cannot or may not anticipate. Such risks may further materialize as unanticipated variations or combinations of the risks discussed in the Diagon Documents. The Participant hereby represents and warrants that he will take sole responsibility for any restrictions and risks associated with the holding or use of Diagon. If any of the risks mentioned in the Terms are unacceptable or the Participant is not in the position to understand, the Participant should not acquire, hold or use Diagon.