Abra Digital Risk Disclosure Statement
Last updated: June 11, 2025
This Risk Disclosure Statement (“Statement”) applies to all clients and potential clients of Abra Digital (“Abra Digital,” “we,” “us,” or “our”). It describes the material risks associated with our services, including over-the-counter (“OTC”) stablecoin trading, proprietary arbitrage, liquidity management, and related value-add offerings. By engaging with our services, you acknowledge that you have read, understood, and accepted the risks described herein in full.
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1. General Risk Warning
1.1. All forms of trading and conversion between assets, especially large-ticket OTC transactions and algorithm-driven arbitrage, carry inherent risks. Past performance is not indicative of future results.
1.2. You should not engage in our services unless you fully understand and can bear the potential losses. Abra Digital does not guarantee profits or the avoidance of losses.
2. Market Risk
2.1. Price Volatility
● Stablecoins (e.g., USDT, USDC) are designed to maintain a $1 peg, but market stress or regulatory action can cause de-pegging and rapid price swings.
● Crypto assets (BTC, ETH, SOL, etc.) can exhibit extreme intraday volatility, impacting the value of currency pairs and arbitrage spreads.
2.2. Liquidity Shocks
● Sudden spikes in buy or sell orders may exhaust available liquidity pools, causing slippage, widening of spreads, or partial fills.
● During periods of market panic or black swan events, liquidity may evaporate, preventing execution at quoted levels.
3. Counterparty & Settlement Risk
3.1. Counterparty Default
● Despite rigorous partner screening, any liquidity provider, exchange intermediary, or banking counterparty may default or suspend operations, exposing you to unfilled trades or losses.
3.2. Settlement Failures
● Off-exchange settlement (T+0 to T+2) relies on banking rails and blockchain confirmations. Network congestion, technical outages, or banking cut-offs can delay or fail settlement.
● Failed settlements can result in stranded positions, margin calls, or financial loss.
4. Credit & Concentration Risk
4.1. Credit Exposure
● Extending or granting credit lines (explicit or implicit) to corporate clients, family offices, or regional partners introduces credit risk if the client or partner cannot fulfill their obligations.
4.2. Concentration Risk
● Concentrating large volumes through a narrow set of corridors (e.g., specific fiat-stablecoin pairs in MENA or Africa) amplifies exposure to regional regulatory or market disruptions.
5. Liquidity Management Risk
5.1. Auto-Top-Up Mechanisms
● Automated replenishment of stablecoin or fiat balances may execute at unfavorable prices during market stress, increasing your average acquisition cost.
5.2. Smart Order Routing
● While splitting orders across P2P, OTC, and exchange APIs generally optimizes fills, sudden router failure or partner API downtime can lead to partial executions or unhedged exposure.
6. Arbitrage Engine Risk
6.1. Model Assumptions
● Proprietary arbitrage algorithms depend on historical spread behaviors and real-time data accuracy. Unexpected shifts in market structure or data feed anomalies may cause the engine to misprice trades.
6.2. Execution Latency
● Sub-second latency is critical for arbitrage. Network delays, API throttling, or infrastructure failures can erode projected gains or convert profitable signals into losses.
7. Operational & Technology Risk
7.1. System Failures
● Any outage in our matching engine, risk-management platform, or client dashboard (due to software bugs, hardware faults, or third-party service downtime) may suspend your access or interrupt trade execution.
7.2. Cybersecurity Threats
● Despite end-to-end encryption (AES-256), multi-factor authentication, and SOC II–grade controls, no system is immune to hacking, phishing, or insider threats. A security breach could result in unauthorized trades, data leaks, or asset theft.
8. Legal & Regulatory Risk
8.1. Jurisdictional Compliance
● Abra Digital operates under multiple regulatory regimes (e.g., FCA in the U.K., FINTRAC in Canada, local CASP licenses). Regulatory changes, licensing delays, or enforcement actions in any jurisdiction may restrict or suspend services.
8.2. Sanctions & AML
● Our screening processes aim to prevent sanctioned-party trading, but evolving sanction lists can inadvertently block or flag legitimate counterparties, causing delays or trade cancellations.
9. Data Privacy & Confidentiality Risk
9.1. Personal Data Handling
● The collection and processing of client KYC/AML data carries the risk of inadvertent disclosure or non-compliance with GDPR, CCPA, or other data-protection laws.
9.2. Operational Secrecy
● Disclosure of our proprietary algorithms or counterparty relationships—whether through cyberattack or negligence—can undermine our competitive edge and your trading outcomes.
10. Geopolitical & Macro Risk
10.1. Regional Instability
● Corridors in Africa, the Middle East, or Central Asia may be affected by political unrest, capital controls, or sudden regulatory bans, disrupting liquidity channels
10.2. Macroeconomic Shocks
● Events such as rapid inflation, currency devaluations, or sovereign debt crises can impact fiat-stablecoin spreads and execution viability.
11. Third-Party & Custody Risk
11.1. Exchange & Wallet Providers
● When routing trades through partner exchanges or custodians, you are exposed to their operational, credit, and security risks.
11.2. Custody Arrangements
● Holding stablecoins or fiat with custodial partners entails counterparty risk; insolvency or mismanagement by a custodian can jeopardize your assets.
12. Force Majeure
12.1. Abra Digital shall not be liable for delays or failures caused by events beyond our reasonable control, including natural disasters, acts of war, pandemics, or government intervention. In such cases, trade execution and settlement may be postponed or canceled.
13. No Investment Advice & Liability Limitation
13.1. No Advisory Relationship
● Our materials and trade executions do not constitute financial advice. Clients are responsible for their own due diligence and decision-making.
13.2. Limitation of Liability
● To the fullest extent permitted by law, Abra Digital’s aggregate liability for all claims shall not exceed the total fees paid by you to Abra Digital in the preceding 12 months.
14. Acknowledgment & Client Suitability
14.1. By using Abra Digital’s services, you confirm that you are a qualified institutional, corporate, or professional client capable of understanding and bearing these risks.
14.2. You agree to notify Abra Digital immediately of any change in your status or ability to assume these risks.
15. Amendments & Contact
15.1. We may revise this Statement at any time. The latest version will always be posted on our website under “General Terms.”
15.2. For questions or to report issues, contact our Compliance Team at compliance@abradigital.com.
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End of Risk Disclosure Statement
