This Risk Disclosure (the "Disclosure") sets out the material risks associated with the use of digital asset payment infrastructure and stablecoin settlement services. This Disclosure is provided by Chainsett SIA ("Chainsett," "we," "us," or "our"), a technology infrastructure and consulting company registered in the Republic of Latvia with its registered office in Riga, Latvia.
This Disclosure is provided for informational purposes and does not constitute financial advice, investment advice, legal advice, tax advice, or any other form of professional advice. You should consult qualified independent professionals before making any decisions relating to the acceptance, processing, or management of digital asset payments.
By engaging with Chainsett or using any of our services, you acknowledge that you have read, understood, and accept the risks described in this Disclosure. If you do not understand or accept these risks, you should not use Chainsett's services.
1. General Risk Warning
Digital assets, including cryptocurrencies and stablecoins, carry inherent risks. The use of digital asset payment infrastructure involves financial, technical, regulatory, and operational risks that may result in partial or total loss of funds. Past performance of any digital asset is not indicative of future performance. You should only accept digital asset payments if you fully understand the risks involved and are prepared to bear potential losses.
2. Price Volatility Risk
2.1 Cryptocurrency Volatility
The value of cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), XRP, Solana (SOL), Cardano (ADA), and other non-stablecoin digital assets can fluctuate significantly and rapidly. Price movements of 10% or more within a single day are not uncommon.
If your business accepts cryptocurrency payments and does not immediately convert them to fiat currency or stablecoins, the value of the received payment may decrease substantially between the time of receipt and the time of conversion. This may result in receiving less fiat currency than the original invoice amount.
2.2 Stablecoin De-Pegging Risk
Stablecoins such as USDC, EURC, and DAI are designed to maintain a stable value relative to a reference currency (e.g., one US dollar or one euro). However, stablecoins are not guaranteed to maintain their peg at all times.
Historical events have demonstrated that stablecoins can temporarily or permanently lose their peg due to market stress, liquidity crises, issuer insolvency, regulatory action, or technical failures. In March 2023, USDC temporarily de-pegged following the collapse of Silicon Valley Bank, falling to approximately $0.87 before recovering. TerraUSD (UST) permanently lost its peg in May 2022, resulting in total loss of value for holders.
While MiCA-regulated stablecoins such as USDC and EURC issued by Circle Internet Financial Europe SAS are subject to reserve requirements and regulatory oversight, this does not eliminate de-pegging risk entirely. No regulatory framework guarantees the value of any stablecoin.
2.3 Exchange Rate Risk
If your business receives payments in digital assets denominated in one currency (e.g., USDC denominated in US dollars) and your operating costs are in another currency (e.g., euros), you are exposed to exchange rate fluctuations between the underlying reference currencies. This risk exists independently of digital asset volatility and is comparable to traditional foreign exchange risk.
3. Technology and Infrastructure Risk
3.1 Blockchain Network Risk
Digital asset transactions are processed on decentralised blockchain networks. These networks are subject to risks including, without limitation:
(a) Network congestion — high transaction volumes may result in delayed confirmation times and increased network fees. During periods of extreme congestion, transactions may remain unconfirmed for hours or days.
(b) Network outages — blockchain networks may experience temporary outages, forks, or degraded performance due to software bugs, consensus failures, or coordinated attacks.
(c) Hard forks and protocol changes — blockchain networks may undergo protocol upgrades or hard forks that result in the creation of new, incompatible versions of the network. Such events may affect the availability, compatibility, or value of digital assets.
(d) 51% attacks — certain blockchain networks are theoretically vulnerable to attacks in which a single entity or coordinated group gains majority control of the network's computing power, potentially enabling double-spending or transaction reversal.
3.2 Smart Contract Risk
Certain digital assets, including ERC-20 tokens such as USDC, EURC, and DAI, are implemented as smart contracts on blockchain platforms. Smart contracts are computer programs that execute automatically when specified conditions are met. Smart contracts may contain bugs, vulnerabilities, or logical errors that could result in the loss, freezing, or misdirection of funds. Smart contract risks cannot be fully eliminated through auditing or testing.
3.3 Irreversibility of Transactions
Blockchain transactions are irreversible once confirmed on the network. Unlike traditional payment methods such as credit cards or bank transfers, there is no chargeback mechanism, dispute resolution process, or central authority that can reverse a confirmed blockchain transaction.
If a digital asset payment is sent to an incorrect address, an incompatible network, or a compromised wallet, the funds may be permanently lost with no possibility of recovery. Chainsett cannot reverse, cancel, or modify any transaction that has been broadcast to a blockchain network.
3.4 Private Key and Wallet Security Risk
Digital assets are secured by private keys — cryptographic credentials that grant control over the assets held at a specific blockchain address. If a private key or seed phrase is lost, stolen, compromised, or destroyed, access to the associated digital assets is permanently lost. There is no password reset mechanism, recovery process, or central authority that can restore access.
Clients using self-custody wallets in connection with Chainsett's services are solely responsible for the security, backup, and management of their own private keys and seed phrases. Chainsett does not hold, store, or have access to any client's private keys or seed phrases.
3.5 Third-Party Service Provider Risk
Chainsett's services rely on the availability, performance, and security of third-party service providers, including but not limited to payment gateways (NOWPayments, Coinbase Commerce, CoinGate), KYT monitoring platforms (Chainalysis, Scorechain, AMLYZE), accounting platforms (Koinly, CoinTracker), and identity verification providers (Veriff, Sumsub).
These third-party providers may experience service interruptions, data breaches, security incidents, policy changes, pricing changes, or discontinuation of service. Any such event may affect the availability, functionality, or cost of Chainsett's services. Chainsett does not guarantee the uninterrupted operation of any third-party service and is not liable for any loss or damage arising from third-party service failures.
In March 2026, Coinbase Commerce discontinued service for non-US and non-Singapore merchants, affecting approximately 8,000 businesses. Similar discontinuations by any current or future service provider cannot be ruled out.
4. Regulatory and Legal Risk
4.1 Evolving Regulatory Landscape
The regulation of digital assets, cryptocurrencies, stablecoins, and related services is evolving rapidly across all jurisdictions worldwide. Laws and regulations that are currently in effect may be amended, replaced, or repealed. New laws and regulations may be introduced at any time.
Regulatory changes may affect the legality, availability, functionality, or cost of digital asset payment acceptance in your jurisdiction. In certain circumstances, regulatory changes may render specific digital assets, payment methods, or business activities illegal or subject to new licensing requirements.
4.2 MiCA and EU Regulation
Regulation (EU) 2023/1114 (the Markets in Crypto-Assets Regulation, "MiCA") came into full enforcement on July 1, 2026. MiCA imposes authorisation requirements on crypto-asset service providers ("CASPs"), issuance requirements on stablecoin issuers, and various compliance obligations on entities operating within the EU digital asset ecosystem.
While Chainsett itself is not a CASP and is not subject to MiCA authorisation requirements (as set out in our Compliance Infrastructure and Regulatory Disclosure), your business may be subject to MiCA or other regulatory requirements depending on:
(a) the nature and scope of your business activities;
(b) the jurisdiction(s) in which you operate;
(c) the types of digital assets you accept;
(d) the volume and nature of your digital asset transactions;
(e) the regulatory classification of your business under applicable law.
Chainsett does not provide legal or regulatory advice. You should consult qualified legal counsel to determine your own regulatory obligations.
4.3 Tax Treatment Uncertainty
The tax treatment of digital asset transactions varies by jurisdiction and is subject to change. In many jurisdictions, the receipt of digital asset payments may give rise to taxable events, including income tax, capital gains tax, value-added tax (VAT), and other taxes.
The classification of digital assets for tax purposes — whether as property, currency, commodity, financial instrument, or otherwise — differs across jurisdictions and may change over time. Tax authorities in certain jurisdictions have issued guidance that conflicts with guidance issued in other jurisdictions, creating uncertainty for businesses operating across borders.
Chainsett's accounting integration services are designed to assist clients in maintaining accurate records of digital asset transactions. However, these services do not constitute tax advice, and the reports and data generated through integrated accounting platforms may not be sufficient or appropriate for all tax reporting purposes in all jurisdictions.
4.4 Sanctions and Compliance Risk
Digital asset transactions may inadvertently involve counterparties, wallet addresses, or jurisdictions that are subject to economic or trade sanctions. While Chainsett's KYT monitoring infrastructure includes sanctions screening capabilities, no screening system is infallible.
False negatives (failure to identify a sanctioned counterparty) and false positives (incorrect identification of a legitimate counterparty as sanctioned) may occur. Clients are solely responsible for their own sanctions compliance and for making their own determinations regarding the permissibility of any transaction.
Engaging in transactions with sanctioned persons, entities, or jurisdictions may result in severe penalties, including criminal prosecution, regardless of whether the sanctions violation was intentional.
4.5 Licensing Risk
Depending on the nature and scope of your business activities, accepting digital asset payments may require you to obtain licences, registrations, or regulatory approvals in your jurisdiction of operation. Operating without required licences may constitute a criminal offence in certain jurisdictions.
Chainsett does not verify whether its clients hold all required licences and does not warrant that the use of Chainsett's services will satisfy any licensing requirements. Clients are solely responsible for determining and obtaining all required licences before accepting digital asset payments.
5. Operational Risk
5.1 Human Error
The handling of digital assets involves complex processes including wallet address entry, network selection, transaction amount specification, and gas fee management. Errors in any of these processes — such as sending assets to an incorrect address, selecting an incompatible network, or specifying an incorrect amount — may result in the permanent and irrecoverable loss of funds.
5.2 Counterparty Risk
Businesses accepting digital asset payments are exposed to counterparty risk from their own customers and from the third-party service providers involved in the payment flow. This includes the risk that a customer sends payment from a wallet associated with illicit activity, creating compliance exposure for the receiving business.
5.3 Liquidity Risk
Certain digital assets may have limited trading volume or market depth. If your business needs to convert a digital asset to fiat currency and the market for that asset is illiquid, you may not be able to convert at the expected price, or conversion may not be possible at all within a reasonable timeframe.
5.4 Operational Continuity Risk
Chainsett is an early-stage company. While we are committed to providing reliable and continuous service, there is no guarantee that Chainsett will continue to operate indefinitely. In the event that Chainsett ceases operations, clients would need to manage their own payment infrastructure, KYT monitoring, and accounting integrations directly or through alternative providers.
Clients do not lose access to their digital assets in such a scenario, as all wallets are self-custody and controlled exclusively by the client. However, the configuration, monitoring, and reporting services provided by Chainsett would need to be replaced.
6. Cybersecurity Risk
6.1 Hacking and Theft
Digital assets are a high-value target for cybercriminals. Wallets, exchanges, payment gateways, and other digital asset infrastructure are subject to hacking, phishing, social engineering, malware, and other cyberattacks. No security system is immune to attack.
6.2 Phishing and Social Engineering
Cybercriminals may attempt to impersonate Chainsett, its employees, or its service providers in order to obtain private keys, seed phrases, login credentials, or other sensitive information. Chainsett will never request your private keys, seed phrases, or wallet passwords. Any communication requesting such information should be treated as fraudulent.
6.3 Data Breach Risk
Despite the implementation of industry-standard security measures, there is a risk that personal data, business data, or transaction data held by Chainsett or its third-party service providers may be compromised in a data breach. In the event of a data breach affecting personal data, Chainsett will comply with its notification obligations under GDPR and applicable law.
7. No Deposit Protection
Digital assets held in self-custody wallets or processed through digital asset payment gateways are not protected by any deposit guarantee scheme, investor compensation scheme, or government-backed insurance programme. This includes, without limitation:
(a) The EU Deposit Guarantee Scheme (Directive 2014/49/EU);
(b) The UK Financial Services Compensation Scheme (FSCS);
(c) The US Federal Deposit Insurance Corporation (FDIC);
(d) Any equivalent national deposit protection scheme in any jurisdiction.
If digital assets are lost, stolen, or become inaccessible for any reason, there is no government or institutional guarantee of recovery or compensation.
8. No Guarantee of Returns or Savings
While Chainsett's marketing materials may reference potential cost savings compared to traditional cross-border payment methods, these figures are illustrative and based on general industry comparisons. Actual savings depend on numerous factors including:
(a) The client's specific transaction volumes, patterns, and corridors;
(b) Network fees at the time of each transaction;
(c) Exchange rates and conversion costs;
(d) The pricing terms of the specific third-party providers used;
(e) The client's existing payment infrastructure and associated costs.
Chainsett does not guarantee any specific cost savings, revenue increase, or financial outcome from the use of its services. All financial projections, estimates, and comparisons provided by Chainsett are for informational purposes only.
9. Acknowledgement of Risks
By using Chainsett's services, you acknowledge and accept that:
(a) You have read, understood, and considered all of the risks described in this Disclosure;
(b) You accept that the risks described herein are not exhaustive and that additional risks may exist that are not currently foreseeable;
(c) You have independently assessed the suitability of digital asset payment acceptance for your business, taking into account your specific circumstances, risk tolerance, and regulatory obligations;
(d) You have obtained, or have had the opportunity to obtain, independent legal, financial, and tax advice regarding the acceptance and management of digital asset payments;
(e) You accept full responsibility for any losses, damages, costs, or liabilities arising from your use of Chainsett's services or your acceptance and management of digital asset payments;
(f) Chainsett shall not be liable for any loss or damage arising from any of the risks described in this Disclosure or any other risk associated with digital asset payment infrastructure.
10. Changes to This Disclosure
Chainsett reserves the right to amend, update, or replace this Risk Disclosure at any time. Any material changes will be published on our website with a revised "Last Updated" date and, where practicable, communicated to affected clients.
Continued use of Chainsett's services following the publication of an updated Disclosure constitutes acknowledgement and acceptance of the updated risks. If you do not accept the updated risks, you must discontinue your use of Chainsett's services.
11. Contact
For questions regarding this Risk Disclosure, please contact:
Chainsett SIA Riga, Latvia Email: info@chainsett.com Website: chainsett.com