Risk Disclosure Statement
Main Warning
Read this document carefully before using Cikos for "live" trading. If you do not fully understand any of the described risks, do not operate in live mode. Use "paper trading" mode to familiarize yourself with the platform without real risk.
1. Leverage Risk
Perpetual futures allow trading with leverage (e.g., 2x, 10x, 100x). Leverage amplifies both profits and losses.
- With 10x leverage, a 1% market move against your position produces a 10% loss on margin
- With 100x leverage, a 1% move against you can liquidate the entire position
- Fees and periodic funding rates erode available margin even when the position is idle
Cikos allows configuring leverage limits per position, but final responsibility for the choice rests with the user.
2. Market Volatility
Cryptocurrencies are extremely volatile assets. Price movements of 10-20% in a few hours are frequent, and movements of 50-90% in a single day have occurred historically.
Market events that can cause volatility spikes include:
- Regulatory authority statements (SEC, MiCA, bans in specific jurisdictions)
- Exchange or DeFi protocol hacks
- Central bank monetary policy decisions
- Coordinated movements by large holders ("whales")
- Viral social news or market manipulation
3. Margin Call and Liquidation Risk
When your position's margin falls below the maintenance threshold required by the exchange, the position is automatically liquidated, often at prices worse than the theoretical liquidation level due to slippage.
In extreme market conditions, liquidation may not happen fast enough and your balance can go negative. Some exchanges offer "negative balance protection"; others do not. Always verify the policy of the exchange you use.
4. Liquidity Risk
Not all futures contracts have sufficient liquidity. During market stress periods:
- Bid/ask spreads can widen dramatically
- Limit orders may not execute
- Market orders may suffer significant slippage
- The exchange may impose temporary trading limits or suspensions
5. Counterparty Risk (Exchange)
Your capital is held by third-party exchanges (Binance, Bitget). Cikos does not custody your funds and has no control over their security or solvency.
Risks associated with exchanges include:
- Exchange insolvency (e.g., FTX, 2022)
- Hacks with fund theft
- Fund freezes for regulatory, AML compliance, or investigation reasons
- Unilateral changes to terms of service
- Geographic blocking following license changes
Always evaluate exchange reliability and do not deposit more than you are willing to lose.
6. Technical and Operational Risk
Automated trading depends on complex technical infrastructure. Possible failures include:
- Exchange downtime during high-volatility windows (when you'd need it most)
- Network latency or connection loss
- API errors (rate limits, expired keys, insufficient permissions)
- Bugs in Cikos or third-party systems
- Global kill switch activated by our operators in emergency
Cikos implements kill switches, circuit breakers, and safety mechanisms but cannot guarantee continuous or correct execution in all conditions. See Section 8 of the Terms on limitation of liability.
7. Algorithmic Risk
Signals generated by Cikos are outputs of proprietary algorithms and AI analysis. These algorithms:
- Do not predict the future — they are based on historical patterns and current market conditions
- Can generate false positives, late signals, or be ineffective in market regimes not seen during training
- Can be influenced by imperfect data, market gaps, or unexpected conditions
- May have positive historical performance but do not guarantee future results
Past performance is not indicative of future results.
8. Regulatory Risk
The regulatory framework for cryptocurrencies is rapidly evolving. In the EU, the MiCA regulation (Markets in Crypto-Assets) is progressively being applied; outside the EU, regulations vary drastically.
Possible future impacts:
- Bans or restrictions on specific products (e.g., perpetual futures for retail)
- Stricter KYC/AML obligations
- Tax changes on crypto capital gains
- Territorial restrictions that could prevent service access
It is your responsibility to verify that using the service is allowed in your jurisdiction and to correctly declare trading income.
9. Tax Risk
Cryptocurrency trading proceeds are subject to taxation in most jurisdictions. In Italy, from 2023, capital gains above €2,000 per year are subject to a 26% substitute tax. Additionally, the RW schedule of the tax return must be completed for foreign asset monitoring.
Cikos does not provide tax advice. Consult an accountant to evaluate your specific situation.
10. Psychological Risk
High-leverage futures trading can induce emotional stress, insomnia, compulsivity, and harmful behaviors. Warning signs include:
- Increasing size after a loss to "recover"
- Obsessively checking positions at night
- Investing capital needed for essential expenses
- Hiding losses from family or partner
If you recognize these patterns stop immediately. In Italy you can contact the free addiction helpline 800 558 822 or the national ISS problem gambling service.
Acknowledgment Statement
By using Cikos in live mode, you declare that you have read and understood the risks outlined above, and that you are trading with capital you can afford to lose entirely without compromising your financial situation.
For any questions, write to support@cikos.com.