Risk Disclosure
Risks specific to investing through the Yieldz platform
1. Purpose
This document describes risks specific to investing through the Yieldz platform. It supplements, and does not replace, the risk factors disclosed in any individual offering's own documents, which you should read in full before investing. This document does not describe every possible risk, and the absence of a specific risk from this list does not mean that risk does not exist.
2. You May Lose Your Entire Investment
An investment made through the Platform can lose all of its value. There is no guarantee of any return, and past performance of any offering, organization, or the Platform generally is not a reliable indicator of future results. You should not invest more than you can afford to lose entirely.
3. These Are Private, Illiquid Securities
Offerings made available through the Platform are made under an exemption from SEC registration, most commonly Rule 506(c) of Regulation D. Consistent with the SEC's own investor guidance on private placements:
- There is no public market for these securities, and none is expected to develop. You should be prepared to hold an investment indefinitely.
- An issuer relying on this exemption is not required to provide the disclosure that would accompany a registered public offering, and may provide only limited financial information.
- These offerings remain subject to the antifraud provisions of federal securities law, but are not reviewed or approved by the SEC or any state regulator before being offered.
- Resale is restricted under Rule 144 and by the lockup period described in the offering's own documents and in the Investor Terms and Conditions. Tokenizing a security does not reduce or remove any of these restrictions — there is no exemption from securities law based on the use of blockchain technology.
4. Each Organization Is Its Own Risk
Each offering represents an interest in a different, typically early-stage, organization. An organization's business may fail entirely, may depend heavily on a small number of people, and is not diversified on your behalf by virtue of being listed on the Platform. Investing in more than one offering does not itself constitute diversification unless you have independently assessed the offerings as unrelated risks.
5. Blockchain and Smart Contract Risk
Tokens are issued and transferred using blockchain technology and smart contracts, which carry risks distinct from a traditionally held security:
- A blockchain transaction, once confirmed, cannot be reversed. A transaction sent to the wrong address, or executed as a result of an error, cannot be undone by Yieldz or anyone else.
- Smart contracts may contain errors or vulnerabilities despite testing and review, which could affect the ability to transfer, redeem, or otherwise use a token as intended.
- The underlying blockchain network is operated by parties independent of Yieldz. Network congestion, a change in network rules, or a disruption to the network could delay or prevent a transaction.
6. Custody and Key Loss Risk
Your wallet is self-custodial, described in full in the Custody Model document. Access requires both a key share on your device and a key share held by Yieldz. If you lose access to your device and any recovery materials associated with your account, Yieldz cannot restore access to your wallet, and any assets in it may be permanently unreachable. This is a consequence of how self-custodial wallets work, not a platform limitation Yieldz can waive.
7. Redemption Is Not Guaranteed
Where an organization offers to redeem tokens it has issued, that facility is entirely discretionary, may be limited by the funds the organization has made available, and may be withdrawn at any time. You should not assume that redemption will be available when you want to exit a position, even after the applicable lockup period has ended.
8. Stablecoin and Payment Risk
Purchases and redemptions settle in stablecoin. A stablecoin's value is intended to track a reference asset, typically the U.S. dollar, but that relationship is maintained by the stablecoin's own issuer and is not guaranteed. A stablecoin can lose its peg, and the entity that issues it carries its own risk of failure, separate from and in addition to the risks of any investment made through the Platform.
9. Reliance on Third Parties
Yieldz relies on independent providers to perform identity verification, accreditation verification, document signing, and other functions described in the KYC / KYB Responsibility Matrix. A disruption, error, or discontinuation of service by any of these providers could delay or prevent you from completing a transaction, and is outside Yieldz's direct control.
10. Tax Treatment Is Your Responsibility
Yieldz does not provide tax advice and does not calculate your tax obligations arising from an investment, a redemption, or any other transaction. Determining cost basis, holding period, and gain or loss is your responsibility, using the same on-chain transaction history available for any blockchain-based asset. You should consult your own tax advisor.
11. Platform and Operational Risk
Yieldz is itself an early-stage company. Its continued operation, like that of any company, is not guaranteed. A disruption to Yieldz's own operations could affect your ability to access the Platform, though it would not itself affect your ownership of assets already held in your self-custodial wallet or your rights under an offering's own documents.
12. No Advice, No Suitability Review
Nothing in this document, or elsewhere on the Platform, constitutes investment, legal, or tax advice, or a recommendation that any offering is suitable for you. You are solely responsible for evaluating whether a particular investment is appropriate for your own circumstances, and are encouraged to consult your own professional advisors before investing.
13. Acknowledgment
Before your first investment, you will be asked to confirm that you have read and understood this Risk Disclosure. That acknowledgment is a condition of investing through the Platform, consistent with the Investor Terms and Conditions.