Risk Disclosure

IMPORTANT — PLEASE READ THIS STATEMENT CAREFULLY BEFORE USING ANY FINIK SERVICE.

This Risk Disclosure Statement is provided by FinikPay Inc. ("Finik", "we", "us") to all prospective and existing clients. It describes the principal risks associated with using our platform and services. It is not exhaustive — there may be other risks specific to your personal circumstances that are not listed here.

Nothing in this statement constitutes financial, investment, legal, or tax advice. By accepting our Terms of Service, you confirm that you have read this statement, that you understand the risks described, and that you accept those risks as a condition of using our services.

You should not use our services with funds you cannot afford to lose.

1. Crypto Asset Risks

1.1 Price Volatility

1.1.1 Crypto assets are highly volatile. Their market value can increase or decrease dramatically over very short periods — sometimes within hours or minutes. There is no guarantee that the value of any crypto asset will remain stable or increase over time.

1.1.2 Historical price performance of any crypto asset is not a reliable indicator of future performance. Past gains do not guarantee future returns.

1.1.3 Volatility may be amplified by factors including limited market liquidity, speculative trading, large individual transactions, regulatory announcements, macroeconomic events, and changes in market sentiment.

1.2 No Intrinsic Value Guarantee

1.2.1 Unlike traditional currencies issued by governments, most crypto assets are not backed by any government, central bank, physical commodity, or legal tender. Their value is derived entirely from market supply and demand. There is no authority that guarantees their value or that will compensate you for losses.

1.2.2 Certain crypto assets may decline in value to zero. You could lose your entire investment.

1.3 Liquidity Risk

1.3.1 The market for certain crypto assets may be illiquid, particularly for less widely traded assets. This means you may not be able to buy or sell an asset at a time or price of your choosing. Illiquidity can cause prices to move sharply when large transactions occur.

1.3.2 During periods of high market stress, liquidity may deteriorate rapidly even for assets that are ordinarily liquid.

2. Stablecoin Risks

2.1 Peg Risk

2.1.1 Stablecoins — including USDT (Tether), which is used to fund the Finik Card Program — are designed to maintain a stable value relative to a reference asset, typically the US dollar. However, this peg is not guaranteed by any government or regulatory authority and can break under adverse conditions.

2.1.2 Circumstances that may cause a stablecoin to lose its peg include: insufficient or misrepresented reserves held by the issuer; a loss of market confidence in the issuer; regulatory action against the issuer; a market crisis or liquidity event; or a technical failure.

2.1.3 If USDT loses its peg to the US dollar, the value of your Card Allocation and any USDT balance you hold could fall materially and rapidly. Finik has no control over the issuance, reserves, or redemption of USDT and is not responsible for any de-peg event.

2.2 Issuer Risk

2.2.1 Stablecoins are issued by private entities, not governments. The financial health, regulatory compliance, and operational integrity of those issuers directly affects the value and redeemability of their stablecoins. If the issuer of a stablecoin becomes insolvent or is unable to honour redemptions, the stablecoin could become worthless.

3. Technology and Blockchain Risks

3.1 Irreversibility of Transactions

3.1.1 Transactions broadcast to a public blockchain are generally irreversible once they are confirmed by the network. This is a fundamental characteristic of blockchain technology — it cannot be overridden by Finik or by any other party.

3.1.2 If you send crypto assets to an incorrect wallet address, use the wrong blockchain network, or send an unsupported asset to a deposit address, your assets may be permanently and irrecoverably lost. We cannot reverse or cancel correctly executed blockchain transactions, regardless of the circumstances.

3.1.3 You are solely responsible for verifying the accuracy of every wallet address, network selection, and transaction instruction before you submit it. Always double-check before confirming.

3.2 Network Risk

3.2.1 Public blockchain networks are operated by decentralised networks of independent participants. Finik has no control over these networks. Risks associated with blockchain infrastructure include:

• Network congestion — during periods of high demand, transaction processing may be delayed and network fees may increase significantly;
• Blockchain forks — a hard or soft fork of a blockchain may result in two competing chains. It may be unclear which chain has legal or market legitimacy, and Finik may not support the resulting asset on the minority chain;
• Protocol upgrades — changes to a blockchain's protocol may alter how assets function, affect compatibility with existing wallets or tools, or introduce unforeseen vulnerabilities;
• 51% attacks — if a malicious actor gains control of a majority of a network's hashing power, they may be able to manipulate transaction ordering or double-spend assets; and
• Smart contract risks — assets that rely on smart contracts (including certain stablecoins and tokens) are subject to the risk of bugs, logic errors, or exploits in those contracts.

3.3 Private Key Risk

3.3.1 Control over crypto assets ultimately depends on possession of the private key associated with a wallet address. Your crypto assets are held by our digital asset custodian, who manages the private keys on your behalf. If the custodian's key management systems were compromised — through a cyberattack, internal fraud, or technical failure — your assets could be at risk.

3.3.2 For assets held in external wallets that you control, you are solely responsible for the security of your private keys and seed phrases. If these are lost, stolen, or compromised, there is no recovery mechanism.

3.4 Platform and Technology Risk

3.4.1 Our platform depends on software, hardware, network infrastructure, and the services of third-party providers. Technology systems can experience outages, bugs, vulnerabilities, and unexpected failures. During a platform outage or technical incident, you may temporarily be unable to access your account, view your balance, or execute transactions.

3.4.2 We take reasonable steps to maintain platform availability and security, but we cannot guarantee uninterrupted or error-free service.

4. Custody and Counterparty Risks

4.1 Custody Risk

4.1.1 Your crypto assets are held at the custody infrastructure level by a third-party digital asset custodian engaged by Finik. Finik does not hold the private keys to your assets. While we select and monitor our custodian carefully, no custody arrangement is risk-free.

4.1.2 Risks associated with third-party custody include: a cybersecurity incident at the custodian; internal fraud or misconduct by custodian personnel; technical failure in the custodian's systems; regulatory action against the custodian; and insolvency of the custodian.

4.1.3 Your crypto assets are not held in a segregated account in your name at the custodian. They are held in an omnibus arrangement on Finik's behalf, and your entitlement is recorded in Finik's internal ledger. In the event of the custodian's insolvency, you may not be able to recover the full value of your assets and may rank as an unsecured creditor.

4.1.4 Client assets are held separately from Finik's own operating capital and are not used to fund Finik's operations. Finik maintains client crypto balances on a 1:1 basis: the total of all client entitlements recorded on Finik's internal ledger is backed by an equivalent amount of the same assets held at the custodian, and the ledger is reconciled against custodian balances on a continuous basis.

4.1.5 Segregation operates at two different levels, and the difference matters. At the company level, client assets are segregated from Finik's own assets, as described in 4.1.4. At the client level, assets are not segregated: they are held at the custodian in an omnibus arrangement on Finik's behalf rather than in an individual account in your name, as described in 4.1.3. Your entitlement is established by Finik's internal ledger, not by a separate account held for you at the custodian.

4.1.6 At least 85% of client funds are held in cold storage, in wallets whose private keys are not connected to the internet. Movements of client funds require multi-signature authorisation, so no single individual can move client assets. These controls reduce, but do not eliminate, the custody risks described in 4.1.2.

4.2 No Deposit Insurance

4.2.1 Finik is not a bank or credit union. Your crypto assets and any funds associated with your Finik account are not insured or protected by:

• the Canada Deposit Insurance Corporation (CDIC);
• any provincial deposit insurance plan in Canada;
• the Canadian Investor Protection Fund (CIPF);
• the Financial Services Compensation Scheme (UK);
• any national deposit guarantee scheme in the European Economic Area;
• any other deposit-insurance, investor-compensation, or asset-protection scheme in any jurisdiction.

4.2.2 If Finik becomes insolvent, you may lose some or all of the assets held in your account and may rank as an unsecured creditor in any insolvency proceedings.

4.3 Card Program — BIN Sponsor Risk

4.3.1 The Finik Card Program is operated in partnership with a third-party BIN Sponsor (card issuer). If the BIN Sponsor were to cease operations, lose its Visa membership, or terminate its arrangement with Finik, the Card Program could be temporarily suspended or discontinued. Finik would notify affected cardholders and describe the arrangements for continuation or wind-down, but there may be a period during which the card is unavailable.

4.4 Concentration Risk

4.4.1 Finik's services depend on a small number of critical third-party providers — including our custodian, card BIN sponsor, identity verification provider, on-chain analytics provider, and Travel Rule provider. The failure or disruption of any one of these providers could materially affect the availability of one or more services.

5. Compliance and Regulatory Risks

5.1 Account Restrictions and Compliance Actions

5.1.1 Finik operates in a heavily regulated environment and is subject to anti-money laundering (AML), counter-terrorist financing (CTF), and sanctions obligations under Canadian law. As a result:

• transactions may be delayed, declined, reversed, or blocked by Finik's compliance systems without prior notice;
• your account may be suspended or closed if we are required to do so by law, by a regulatory direction, or if we determine that continued provision of services would be inconsistent with our regulatory obligations;
• assets in your account may be frozen if they are identified as connected to a sanctioned person or entity, and may only be released as permitted by law; and
• Finik may be legally prohibited from informing you of the reason for a compliance action, including whether a suspicious transaction report has been filed in relation to your account.

5.2 Travel Rule

5.2.1 Virtual currency transfers of CAD 1,000 or more are subject to the Travel Rule under Canadian law. Finik must collect and share sender and receiver information with the receiving platform for qualifying transfers. If the receiving platform cannot or will not accept this data, Finik may be unable to complete the transfer. This may prevent you from transferring assets to certain external wallets or platforms.

5.3 Regulatory Change

5.3.1 The regulation of crypto assets is evolving rapidly in Canada and internationally. Future regulatory changes — including new licensing requirements, asset classification decisions, reporting obligations, or outright prohibitions on certain activities — could restrict, materially change, or eliminate services that Finik currently offers.

5.3.2 Finik's own regulatory status could be affected by future decisions by FINTRAC, the Bank of Canada, or other authorities. Any change to Finik's registration or licence status could affect its ability to provide some or all services.

5.3.3 Changes in the regulatory treatment of specific crypto assets — for example, a determination that a particular asset constitutes a security — could affect Finik's ability to support that asset on the platform.

5.4 Sanctions Risk

5.4.1 Finik screens all clients and transactions against applicable sanctions lists. If you, a counterparty, or assets associated with your account are identified as connected to a sanctioned person or jurisdiction, Finik will freeze the relevant assets and report to the appropriate authorities. This may result in the permanent loss of access to those assets.

5.4.2 You are responsible for ensuring that you do not transact with sanctioned persons or jurisdictions. Inadvertently receiving funds from a sanctioned source could result in your account being suspended pending investigation.

6. Tax Risks

6.1 Your Tax Obligations

6.1.1 The tax treatment of crypto assets varies by jurisdiction and is subject to change. In Canada, the Canada Revenue Agency (CRA) generally treats crypto assets as a commodity, and dispositions — including selling, swapping, spending on the Finik card, or exchanging one crypto asset for another — are typically taxable events that may give rise to capital gains or business income.

6.1.2 Holding crypto assets, receiving crypto as income, and other activities may also have tax implications depending on your circumstances.

6.1.3 You are solely responsible for determining your tax obligations, filing all required tax returns, and paying all applicable taxes arising from your use of Finik's services. Finik does not provide tax advice. We strongly recommend that you consult a qualified tax adviser before using our services, and on a regular basis as your activity changes.

6.1.4 Finik may issue transaction records or information slips as required by applicable law, but the absence of a Finik-issued document does not relieve you of your own tax reporting obligations.

7. Security Risks

7.1 Account Security

7.1.1 Your account is protected by your login credentials and multi-factor authentication. If your credentials are compromised — through phishing, social engineering, malware, or other means — an unauthorised person could access your account and transfer or spend your assets. Blockchain transactions are generally irreversible, so assets transferred out of your account without your authorisation may not be recoverable.

7.1.2 You are responsible for keeping your login credentials, authentication codes, and recovery information secure and confidential. You must not share them with anyone, including Finik staff. Finik will never ask for your password.

7.1.3 Common risks include: phishing emails or websites designed to look like Finik communications; SIM-swapping attacks targeting your mobile number; malware on your devices that captures keystrokes or authentication codes; and social engineering attacks where someone impersonates Finik staff to obtain your credentials.

7.1.4 Always verify that you are accessing the genuine Finik platform at https://finik.ai before entering your credentials. If you suspect your account has been compromised, contact us immediately at support@finik.ai and freeze your account through the app.

7.2 External Wallet Security

7.2.1 When withdrawing assets to an external wallet, you are responsible for the security of that wallet. If your external wallet is compromised, Finik has no ability to assist in recovering assets that have been transferred out of our platform.

8. OTC Desk Risks

8.1 Pricing Risk

8.1.1 OTC trades are privately negotiated. The price you receive may differ from prices quoted on public exchanges at the same time. OTC pricing reflects factors including market impact of the trade size, counterparty availability, and prevailing liquidity conditions. You may not obtain the best available market price.

8.2 Binding Commitment

8.2.1 Once you accept a Quote from the OTC Desk, the trade is a binding commitment. You cannot cancel it unilaterally. If you accept a Quote but do not have sufficient assets in your Wallet to settle, Finik may close out the trade at market rates and recover from you any resulting loss, together with reasonable costs.

8.3 Settlement Risk

8.3.1 OTC trades are settled on the same Business Day in normal circumstances. Settlement may be delayed by counterparty processes, network conditions, or compliance review. During a settlement delay, the market price of the assets may move against you.

9. Card Program Risks

9.1 USDT De-Peg Risk

9.1.1 Your Card Allocation is funded in USDT. If USDT loses its peg to the US dollar, the USD value of your Card Allocation will fall accordingly. See Section 2 of this statement for a full description of stablecoin risks.

9.2 Card Availability

9.2.1 The Card Program depends on our BIN Sponsor and the Visa card network. Disruptions to either — including outages, rule changes, or the termination of our arrangement with the BIN Sponsor — could render your card temporarily unavailable or permanently discontinued. During any such disruption, your Card Allocation remains recorded in Finik's internal ledger and will be returned to your Wallet.

9.3 Currency Conversion

9.3.1 When you make a card transaction in a currency other than USD, Visa converts the transaction amount to USD using its own exchange rates. These rates include a conversion margin and may not reflect the mid-market rate. The applicable rate is shown in your transaction record after each transaction.

9.4 Merchant Disputes

9.4.1 Card transaction disputes are resolved in accordance with Visa network rules. Finik has no discretion to override the outcome of a chargeback determination made under those rules. The dispute process may take several weeks to complete.

10. Crypto Exchange & Swap Risks

10.1 Execution and Pricing

10.1.1 When you buy, sell, or swap one asset for another, the price is determined at the time of execution and may differ from the price displayed when you initiated the order. Prices move continuously and can change between the moment a quote is shown and the moment a transaction is executed.

10.1.2 Swap and exchange prices include a spread and any applicable fees, so the effective rate you receive may be less favourable than the mid-market rate.

10.2 Quote Expiry and Slippage

10.2.1 Where a quoted rate is offered, it is valid only for a limited period. If you do not accept it within that period, the quote expires and a new rate applies.

10.2.2 In volatile or illiquid market conditions, the executed price may differ materially from the indicated price (slippage). For large orders, market impact may further worsen the price obtained.

10.3 Failed or Rejected Transactions

10.3.1 A swap or exchange may fail, be delayed, or be rejected due to insufficient balance, price movement, liquidity conditions, compliance review, or technical issues. Where a transaction does not complete, assets are returned to your Wallet, but the rate available on any retry may differ.

11. Payment Services Risks

11.1 Crypto Payments and Transfers

11.1.1 Crypto payments and transfers are subject to the blockchain risks described in Section 3, including irreversibility. You are solely responsible for the accuracy of recipient details; a payment sent to an incorrect address or network may be permanently lost.

11.1.2 Payments and transfers may be delayed, declined, or blocked as a result of network conditions, Travel Rule requirements (Section 5.2), or compliance checks.

11.2 Fiat Payments and Money Services

11.2.1 Fiat money services are provided by Finik Money Services Inc. Fiat payments depend on third-party banking and payment-rail providers; their availability, cut-off times, and processing delays are outside Finik's control, and a payment may be delayed, returned, or rejected by an intermediary or beneficiary institution.

11.2.2 Conversion between fiat and crypto, or between currencies, is performed at the applicable rate at the time of processing and includes a margin; the rate you receive may differ from the mid-market rate.

11.3 Incorrect or Disputed Payments

11.3.1 You are responsible for ensuring payment details are correct. Finik may be unable to recover funds sent to an incorrect or fraudulent recipient. Where a payment is unauthorised or disputed, recovery depends on the rules of the relevant network or institution and cannot be guaranteed.

12. Earn Risks

12.1 No Guaranteed Return

12.1.1 Any yield, reward, or return offered through an Earn product is variable and is not guaranteed. Rates may change at any time, and you may receive less than expected or nothing at all.

12.1.2 Earn products are not deposits. They are not savings accounts and are not protected by any deposit-insurance or investor-protection scheme (see Section 4.2).

12.2 Risk to Principal

12.2.1 Funds allocated to an Earn product are exposed to market, counterparty, and protocol risks and may lose value. You could lose some or all of the assets you allocate, including your principal.

12.3 Counterparty and Protocol Risk

12.3.1 Where returns are generated through lending, staking, or deployment to third parties or protocols, you are exposed to the risk that a counterparty defaults, becomes insolvent, or fails to return assets, and to the risk of bugs, exploits, or failures in any smart contract or protocol involved.

12.3.2 Where assets are staked, they may be subject to network rules including bonding or unbonding periods and penalties (such as slashing) that can reduce the amount returned.

12.4 Lock-Up and Liquidity

12.4.1 Some Earn products require assets to be locked for a fixed or minimum period. During that period you may be unable to withdraw, transfer, or sell those assets, and you may be unable to react to market movements.

13. Invest Risks

13.1 Market Risk

13.1.1 The value of investments accessed through the platform can fall as well as rise, and you may get back less than you invested. Past performance is not a reliable indicator of future results.

13.2 Nature of the Exposure

13.2.1 Investment exposure obtained through the platform may be provided by means of derivative, synthetic, tokenised, or intermediated instruments rather than direct legal ownership of the underlying asset. The features, rights, and risks of the instrument may differ from holding the underlying asset directly.

13.3 No Investor Protection

13.3.1 Investments made through the platform are not covered by the Canadian Investor Protection Fund or any equivalent investor-compensation scheme (see Section 4.2). In the event of Finik's or a counterparty's insolvency, you may not recover the full value of your investment.

13.4 Regulatory and Suitability Risk

13.4.1 Investment products and tokenised securities are subject to evolving securities and financial-markets regulation. Changes in regulatory treatment could restrict, suspend, or alter the availability of these products. Investments may not be suitable for all clients; you should consider your objectives, experience, and risk tolerance and seek independent advice where appropriate.

14. AI Tools Risks

14.1 Informational Purpose Only

14.1.1 Finik's AI-powered features (including Navigator, Analyst, and News Feed) are provided for general information and convenience only. They do not constitute investment, financial, legal, or tax advice and must not be relied upon as such.

14.2 Accuracy and Limitations

14.2.1 AI-generated outputs may be inaccurate, incomplete, out of date, or misleading, and may produce errors or fabricated information. Outputs may not reflect current market conditions or your individual circumstances.

14.2.2 You are responsible for independently verifying any information before acting on it. Any decision you make remains your own, and Finik is not responsible for losses arising from reliance on AI-generated outputs.

14.3 Third-Party Inputs

14.3.1 AI features may rely on third-party data sources and models. Finik does not control and cannot guarantee the accuracy, availability, or continuity of those sources, and the features may be changed, suspended, or withdrawn at any time.

15. General Risks

15.1 No Advice

15.1.1 Finik does not provide investment, financial, legal, or tax advice. Nothing on the platform — including price data, asset descriptions, or transaction history — constitutes a recommendation to buy, sell, or hold any crypto asset. You make all decisions about your transactions independently and at your own risk.

15.2 Suitability

15.2.1 Crypto assets may not be suitable for all clients. Before using our services, you should carefully consider whether crypto assets are appropriate for your financial situation, investment objectives, risk tolerance, and level of experience. If you are in any doubt, you should seek independent financial advice.

15.3 This Statement Is Not Exhaustive

15.3.1 The risks described in this statement are the principal risks associated with our services as of the effective date. They are not exhaustive. New risks may emerge as technology, markets, and regulation evolve. You are responsible for staying informed about the risks relevant to your activity on the platform.

16. Acknowledgement

By accepting Finik's Terms of Service and activating any service, you confirm that:

• you have read and understood this Risk Disclosure Statement in full;
• you understand the nature and risks of crypto assets and the services described;
• you accept those risks as a condition of using the services;
• you are using the services with funds you can afford to lose; and
• you have obtained any independent professional advice you consider necessary before proceeding.