GLX is committed to the highest standards of Corporate Governance and Social Responsibility.
Updated on September 1, 2019
Members acknowledge and agree that there are risks associated with purchasing GLX Tokens, holding GLX Tokens, and using GLX Tokens for providing or receiving access and / or services on the GLX Network. By purchasing, holding, and using GLX Tokens, you expressly acknowledge and assume the following risks:
Risk of Losing Access to GLX Due to Loss of Credentials
The Members’ GLX Tokens may be associated with a GLX account. The GLX account can only be accessed with login credentials selected by the Participant. The loss of these credentials may result in the loss of the Members’ GLX Tokens. Best practices dictate that Members safely store credentials in one or more backup locations geographically separated from the working location.
Risk of Losing Access to GLX Tokens Due to Loss of Private Key(s) or Seed / Passphrase
A private key, seed / passphrase or a combination of (“Security Credentials”), is necessary to control GLX Tokens stored in your digital wallet. Accordingly, loss of these requisite Security Credentials associated with your digital wallet storing GLX Tokens will result in loss of such GLX Tokens. Moreover, any third party that gains access to such Security Credentials, including by gaining access to login credentials of a hosted wallet service you use, may be able to misappropriate your GLX Tokens. Any third party that gains access to, or learns of the Members’ login credentials or wallet Security Credentials, may thus be able to dispose of the Members’ GLX Tokens. To minimize this risk, the Participant should guard against unauthorized access to their electronic devices at all times.
You are responsible for implementing reasonable measures for securing the wallet, or other storage mechanism you use to receive and hold GLX Tokens you purchase from us, including any requisite private key(s) or other credentials necessary to access such storage mechanism(s). As explained above, if your private key(s) or other access credentials are lost, you may lose access to your GLX Tokens. We are not responsible for any such losses.
Risks Involving Cloud Storage
As GLX may provide services to individual and institutional clients, including users and developers of applications which involves data storage to some extent, the services are susceptible to a number of risks related to the storage of data in the cloud. While the Company does not have access to the contents of the data stored through the services, the services may involve the storage of large amounts of sensitive and/or proprietary information, which may be compromised in the event of a cyber- attack or other malicious activity. Similarly, the services may be interrupted and files may become temporarily unavailable in the event of such an attack or malicious activity. Because users can use a variety of hardware and software that may interface with the GLX Network, there is the risk that the services may become unavailable or interrupted based on a failure of interoperability or an inability to integrate these third-party systems and devices that the Company does not control with the Company’s services. The risk that the services may face increasing interruptions and the GLX Network may face additional security vulnerabilities could adversely affect the GLX Network and therefore the future utility of any GLX Tokens held by parties.
Risks Associated with the Komodo Platform
Because the GLX Tokens and other associated software are based on the Komodo Platform, any malfunction, breakdown or abandonment of the Komodo Platform may have a material adverse effect on the GLX Tokens. Also, any unintended function, unexpected functioning of or attack on the Komodo Platform may cause the GLX Tokens to malfunction or function in an unexpected or unintended manner. KMD, the native unit of account of the Komodo Platform may itself lose value in ways similar to GLX Tokens, and also other ways. More information about the Komodo Platform is available at http://komodoplatform.com.
Moreover, advances in cryptography, or technical advances such as the development of quantum computing, could present risks to the GLX Tokens and the GLX Network by rendering ineffective the cryptographic consensus mechanism that underpins the Ethereum protocol.
Risk of Mining Attacks
As with other decentralized cryptographic GLX Tokens based on the Ethereum protocol, the GLX Tokens are susceptible to attacks by miners in the course of validating Token transactions on the Ethereum blockchain, including, but not limited, to double-spend attacks, majority mining power attacks, and selfish-mining attacks. Any successful attacks present a risk to the GLX Network and the GLX Tokens, including, but not limited to, accurate execution and recording of transactions involving GLX Tokens.
Risk of Hacking and Security Weaknesses
Hackers or other malicious groups or organizations may attempt to interfere with the GLX Network or the GLX Tokens in a variety of ways, including, but not limited to, treasury vulnerability, malware attacks, denial of service attacks, consensus-based attacks, man in the middle, Sybil attacks, smurfing and spoofing. Furthermore, because the GLX Network is based on open-source software, there is a risk that a third party or a member of the Company team may intentionally or unintentionally introduce weaknesses into the core infrastructure of the GLX Network, which could negatively affect the GLX Network and the GLX Tokens.
Hackers or other groups or organizations may attempt to steal cryptocurrencies and / or fiat currencies from the GLX Token sale, thus potentially impacting the ability of the Company to develop the GLX Platform and operate the GLX Network. To account for this risk, the Company has and will continue to implement comprehensive security precautions to safeguard the contributions obtained from the sale of GLX Tokens.
Multi-factor security measures will be taken to protect cryptocurrencies and / or fiat currencies including physical elements, algorithms, multisignature keys, anti-spear-phishing procedures, splitting of funds, hot/cold wallet partitioning and diversification. Moreover, regular security audits of hot and cold wallets will be conducted by internal and external teams. As acknowledged, there is always a risk that the GLX Team, or other third parties not directly affiliated with the Parties, may intentionally or unintentionally introduce weaknesses or bugs into the core infrastructural elements of the GLX Platform causing the system to lose GLX stored in one or more Members accounts or other accounts or lose sums of other valued GLX Tokens issued on the GLX Platform. The Company has taken steps to build, maintain, and secure the infrastructure of the GLX Platform and will continue to do so after the initial sale. For example, the Company intends to hire external consultants on a periodic basis to assess and audit the security of the GLX Platform and will work with cryptography and security experts to develop and employ best practices to audit the GLX Platform. As acknowledged, advances in code cracking, or technical advances such as the development of quantum computers, could present risks to cryptocurrencies and the GLX Platform, which could result in the theft or loss of GLX stored cryptocurrencies or other valuable assets. To the extent possible, the Company intends to update the protocol underlying the GLX Platform to account for any advances in cryptography and to incorporate additional security measures, but it cannot predict the future of cryptography or the success of any future security updates. As with other cryptocurrencies, the blockchain used for the GLX Platform is susceptible to mining attacks, among others. Any successful attacks present a risk to the Ethereum GLX Platform generally, and the GLX Network specifically, effecting expected proper execution and sequencing of GLX Token transactions, and expected proper execution and sequencing of contract computations, as well as other potential losses identified here as risk factors, in addition to those unidentified or unexpected. The purchase of GLX Tokens carries with it these significant risks. Prior to purchasing GLX Tokens, the Members should carefully consider the risks herein identified, and, to the extent necessary, consult experts of your choosing (cryptographic and cyber security specialists, lawyers, accountants, and/or other professionals) prior to determining whether to purchase GLX Tokens.
Risks Associated with Markets for GLX Tokens
The GLX Tokens are intended to be used solely within the GLX Network. The Company will not support or otherwise facilitate any secondary trading or external valuation of GLX Tokens. This restricts the contemplated avenues for using GLX Tokens to the provision or receipt of services, and could therefore, create illiquidity risk with respect to the GLX Tokens held by any party. Even if secondary trading of GLX Tokens is facilitated by third party exchanges; such exchanges may be relatively new and subject to little or no regulatory oversight, making them more susceptible to fraud or manipulation. Furthermore, to the extent that third parties do ascribe an external exchange value to GLX Tokens (e.g., as denominated in a digital or fiat currency), such value may be extremely volatile and diminish to zero. Thus, since cryptocurrencies are volatile, and the price of most cryptocurrencies as it relates to fiat currency may decrease over a short period of time, significant loss to purchasers of any cryptocurrency, or of tokens similar to the GLX Token may result. Regardless, any cryptocurrency exchanges, or buyers and sellers on the free market, may, and most likely, will, set a price that is different from the initial price set by the Company, the price at which many Members purchased the GLX Tokens during the GLX Token sale.
A system or technical failure, or deficient source code, may negatively impact the ability to exchange cryptocurrencies, or even the specter of such, may affect the price of cryptocurrencies or the price of GLX Tokens. Likewise, a hacking incident or malicious attack may negatively impact the price of cryptocurrencies, generally, or GLX Tokens, specifically.
Risk of an Illiquid Market for the GLX Tokens
There very well may never be a secondary market for GLX Tokens. Currently GLX Tokens are not traded on any exchange. If ever exchanges do develop, they will likely be relatively new and subject to poorly understood regulatory oversight. They may, therefore, be more exposed to fraud and failure than established, regulated exchanges for other products and have a negative impact on GLX Tokens.
Risk of Uninsured Losses
Unlike bank accounts or accounts at some financial institutions, GLX Tokens are uninsured unless you specifically obtain private insurance to insure them. Thus, in the event of loss or loss of utility value, there is no public insurer, such as the Federal Deposit Insurance Corporation (FDIC), or private insurance arranged by the Company, to offer recourse to you.
Risk of an Unfavorable Fluctuation of Ether and Other Currency Value
The Company team intends to use the contributions from selling GLX Tokens to fund the development and maintenance of the GLX Network, as described further throughout GLX sites and informational materials.
The proceeds of the GLX Token sale will be denominated in cryptocurrencies and / or fiat currencies, and may be converted into other cryptocurrencies and / or fiat currencies. If the value of Ether or other currencies fluctuates unfavorably during or after the GLX Token sale, the Company may not be able to fund development, or may not be able to develop or maintain the GLX Network in the manner that it intended.
Risk of Alternative, Unofficial GLX Platform Networks
Following the GLX Token sale and the further refinement and development of the GLX Platform, it is possible that alternative applications could be established, which may use the same or similar source code and protocol underlying the GLX Platform, and attempt to facilitate services that are materially similar to the Services offered on the GLX Network. The GLX Network may thus compete with these alternative networks, which could negatively impact the GLX Network and the GLX Tokens, including its value. Since cryptocurrencies compete with all other cryptocurrencies, such competition may negatively impact the price of any specific cryptocurrency, and in this instance, may negatively impact the price of the GLX Token.
Risk of Insufficient Interest in the Network (GLX Platform) or Distributed Applications
It is possible that the GLX Network will not be used by a large number of individuals, companies, organizations and other entities or that there will be limited public interest in the creation and development of distributed applications in ecosystems such as the GLX Network. Such a lack of use or interest could negatively impact the development of the Network and therefore the potential utility of GLX Tokens, thus negatively impacting negatively impacting GLX Tokens and the GLX Platform.
Risk that the GLX Platform, as Developed, Will Not Meet the Expectations of GLX or the Participant
The GLX Platform is presently under development in Alpha / Beta release and may undergo significant changes before our full release. Any expectations or assumptions regarding the form and functionality of the GLX Platform or the GLX Tokens (including Participant behavior) held by GLX or the Participant may not be met upon full release, for any number of reasons including mistaken assumptions or analysis, a change in the design and implementation plan and execution of the GLX Platform.
Risks Associated with the Development and Maintenance of the Network
The GLX Network is still under development and may undergo significant changes over time. Although the Company intends for the GLXNetwork and GLX Tokens to follow the specifications set forth in the Company Terms and Conditions, and throughout descriptions on the GLX website, business plans, white papers, etc…, and although the Company intends to take commercially reasonable steps toward those ends, the parties acknowledge the Company may have to make changes to the specifications of the GLXNetwork and GLX Tokens for any number of legitimate reasons. This could create the risk that the GLX Tokens or the GLX Network, as further developed and maintained, may not meet all party’s expectations at the time of purchase. Furthermore, despite good faith best efforts to develop and maintain the GLXNetwork, it is still possible that the GLXNetwork will experience malfunctions or otherwise fail to be adequately developed or maintained, which may negatively impact the GLXNetwork and GLX Tokens.
Risk of Malfunction on the GLX Platform
It is possible that the GLX Platform malfunctions in an unfavorable way, including one that results in the loss of GLX Tokens.
Risk of Dissolution of the Company or Network
It is possible that, due to any number of reasons, including, but not limited to, an unfavorable fluctuation in the value of Ether (or other cryptographic and fiat currencies), decrease in the GLX Tokens’ utility, the failure of commercial relationships, or intellectual property ownership challenges, the GLX Network may no longer be viable to operate, and the Company may dissolve.
Risks Arising from Lack of Governance Rights
Because GLX Tokens confer no governance rights with respect to the Company or its corporate affiliates, and only limited governance functionality allowing for input as part of the participation interests of token holders within their community as users of the GLX Network, all decisions involving the GLX Network or the Company will ultimately be made by the Company following input received from the Members, including, but not limited to, decisions to discontinue the GLX Network, to create and sell more GLX Tokens for use in the Network, or to sell or liquidate the Company, all of which critical decisions the Company would intend to consult the Members for input before any such ultimate decisions are made. Nevertheless, such decisions could adversely affect the GLX Network and the GLX Tokens held by the Members.
Risks Arising from Taxation
The tax characterization of GLX Tokens is uncertain. You must seek your own tax advice in connection with purchasing GLX Tokens, which may result in adverse tax consequences to you, including withholding taxes, income taxes and tax reporting requirements.
Risk of Unfavorable Regulatory Action in One or More Jurisdictions
Blockchain technologies have been the subject of scrutiny by various regulatory bodies around the world. The functioning of the GLX Platform and GLX Tokens could be impacted by one or more regulatory inquiries or actions, including the licensing of or restrictions on the use, sale, or possession of digital tokens like GLX Tokens, which could impede, limit or end the development of the GLX Platform.
Risks Associated with Uncertain Regulations and Enforcement Actions
The regulatory status of GLX Tokens generally, and this form of Utility Token, specifically, as well as distributed ledger technology, in all forms, is unclear, evolving, or otherwise unsettled in many jurisdictions. Accordingly, it is difficult to predict how or whether regulatory agencies may apply existing regulation with respect to such technology and its applications, including the GLX Network and the GLX Tokens. It is likewise difficult to predict how or whether legislatures or regulatory agencies may implement changes to law and regulation affecting distributed ledger technology and its applications, including the GLX Network and GLX Tokens. Regulatory actions could negatively impact the GLX Network and the GLX Tokens in various ways, including, for purposes of illustration only, through a determination that GLX Tokens are a regulated financial instrument that require registration or licensing. The Company may cease operations in a jurisdiction in the event that regulatory actions, or changes to law or regulation, make it illegal to operate in such jurisdiction, or commercially undesirable to obtain the necessary regulatory approval(s) to operate in such jurisdiction. In any event, governments may adopt legislation or regulations that may negatively impact the use, transfer, exchange or price of cryptocurrencies, and thereby affect the GLX Network and GLX Tokens.
Cryptographic tokens such as GLX Tokens are a new and untested technology. In addition to the risks included in this catalog of risks, there are other risks associated with purchase, holding and use of GLX Tokens, including those that the Company cannot anticipate. Such risks may further materialize as unanticipated variations or combinations of the risks discussed herein.
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