Part of the Crestox Legal Framework. By creating an account or participating in any capacity — as a Collector, Artist, Curator, or Owner — you agree to be bound by this document together with the other documents that make up the Crestox legal framework (Terms of Use, Risk Disclosure, Privacy Policy, Artist Agreement, and Secondary Marketplace Terms).
Effective Date: [Date]
Last Updated: [Date]
2.1 Purpose of This Document
This Risk Disclosure is provided to ensure that you fully understand the nature and extent of the risks associated with participating on the Crestox platform before you commit any funds or make any decisions.
Participation in Crestox involves financial risk. You may lose some or all of the value of your investment. You should not participate unless you understand these risks and are prepared to accept them.
This document does not constitute financial, investment, tax, or legal advice. Nothing in this document should be construed as a recommendation to purchase or sell any Fractal or to participate in the Platform in any capacity. You are solely responsible for your own decisions and should seek independent professional advice before participating.
2.2 Nature of Fractals
Fractals are units representing proportional ownership participation in an Artwork or Artwork portfolio listed on the Crestox platform. They are not shares, securities, bonds, or any other regulated financial instrument unless explicitly classified as such under applicable law in your jurisdiction.
You should understand the following before purchasing Fractals:
- Fractals represent a participation interest only. They do not confer voting rights, control over the underlying Artwork, the right to physical possession of the Artwork, or any intellectual property rights.
- The value of Fractals is not fixed. It may increase or decrease over time based on market conditions, collector demand, and the perceived cultural or financial value of the underlying Artwork.
- Fractals are not guaranteed investments. There is no assurance of capital preservation or return.
- Crestox does not guarantee that any Fractal will retain any value at any point in time.
2.3 Liquidity Risk
There is no guarantee that a secondary market will exist for any Fractal you purchase, or that you will be able to sell your Fractals at any time or at any particular price.
You should be aware of the following:
- The availability of buyers on the Secondary Marketplace depends entirely on market demand, which may be limited or non-existent for certain Artworks or at certain times.
- Listing your Fractals on the Secondary Marketplace does not guarantee that they will be sold.
- Fractals should be considered illiquid assets. You should not participate using funds that you may need to access in the short term.
- Crestox does not operate as a market maker and has no obligation to purchase Fractals from Collectors.
2.4 Pricing Risk
The price of Fractals is subject to change and is influenced by factors outside Crestox's control.
You should understand that:
- Past performance of any Fractal, Artwork, or Artwork category is not indicative of future performance.
- Fractal prices may decline significantly and may not recover.
- The value attributed to an Artwork at the time of listing is an estimate based on available information and market conditions at that time. It is not a guarantee of actual or future value.
- Prices on the Secondary Marketplace are set by individual Collectors and may bear no relation to the original purchase price or the assessed value of the underlying Artwork.
2.5 Market Risk
Art market conditions change, and these changes may materially affect the value of your Fractals.
Relevant factors include:
- Shifts in collector demand for particular Artists, styles, or movements.
- Changes in the broader art market, including economic conditions that affect discretionary spending.
- Fluctuations in cultural trends that affect the perceived relevance or desirability of an Artwork.
- The entry of competing platforms or investment vehicles that affect demand for Fractals specifically.
2.6 Artwork Risk
The value of individual Artworks — and therefore the Fractals associated with them — is subject to risks specific to the Artwork and its creator.
These include:
- Artist Reputation Risk. The reputation of an Artist may change over time due to personal, professional, or public circumstances, affecting the perceived and market value of their Artworks.
- Authenticity Risk. Notwithstanding Crestox's verification processes, there remains a risk that questions about the authenticity, provenance, or attribution of an Artwork may arise after listing. Such questions may significantly affect value.
- Physical Condition Risk. Artworks are physical objects subject to deterioration, damage, loss, or destruction. While Crestox takes steps to ensure appropriate custodial arrangements are in place where applicable, physical damage to an Artwork may affect the value of associated Fractals.
- Cultural Relevance Risk. The cultural significance of an Artwork may change over time, affecting collector interest and value.
2.7 Technology Risk
The Platform depends on technology and digital infrastructure that is subject to failure, disruption, and attack.
You should be aware that:
- Platform outages, technical failures, or system errors may temporarily or permanently prevent you from accessing your Account, viewing your Portfolio, or completing transactions.
- Cybersecurity incidents, including hacking, phishing, or data breaches, may result in loss of data or funds. While Crestox maintains security measures, no system is entirely immune to attack.
- Software errors or bugs may result in incorrect pricing, failed transactions, or other unintended outcomes.
- Crestox does not guarantee continuous, uninterrupted access to the Platform and will not be liable for losses resulting from technological failures beyond its reasonable control.
2.8 Regulatory Risk
The legal and regulatory environment applicable to art investment platforms, fractional ownership, and digital assets is evolving.
You should be aware that:
- Laws and regulations applicable to fractional ownership of Artworks may change in ways that affect your rights, the operation of the Platform, or the availability of certain features in your jurisdiction.
- Crestox may be required to suspend, restrict, or modify its services in response to regulatory changes or legal requirements.
- The tax treatment of Fractal purchases, sales, and gains may change and may differ across jurisdictions. Crestox does not provide tax advice. You are solely responsible for determining and meeting your own tax obligations.
- In some jurisdictions, Fractals may be classified as regulated financial instruments, which may affect how they can be offered, transferred, or traded. You are responsible for determining whether participation is lawful in your jurisdiction.
2.9 No Investment Advice
Crestox does not provide investment advice, financial advice, legal advice, or tax advice of any kind.
- Nothing on the Platform — including Artwork grades, pricing information, portfolio performance data, or editorial content — constitutes a recommendation to buy, hold, or sell any Fractal.
- All participation decisions are yours alone. Crestox does not assess the suitability of any Fractal for any individual User.
- You should obtain independent professional financial, legal, and tax advice before making any participation decision.
2.10 User Acknowledgment
By proceeding to register for or use the Platform, you confirm that:
- You have read this Risk Disclosure in full.
- You understand the nature of Fractals and the risks associated with their purchase.
- You accept that the value of Fractals may decrease and that you may lose some or all of the funds you commit.
- You acknowledge that Crestox does not guarantee liquidity, returns, or Artwork appreciation.
- You accept that participation is at your own risk and that you are making an independent decision.
- You understand that this document does not constitute investment advice and that you are not relying on Crestox for any financial, legal, or tax guidance.
Related Documents
This document is part of the Crestox Legal Framework. For the complete framework, also see: