Risk Disclosure Statement

Last updated January 27th 2025

This Tether Token Risk Disclosure Statement provides you with a summary of certain risks you should consider when deciding whether to purchase, hold or dispose of Tether Tokens or use the Services offered by Tether (each, as defined in the Tether Token Terms of Service. By purchasing, holding and disposing Tether Tokens or using the Services offered by Tether, you acknowledge that you have read and understand this Statement. You should not purchase, hold or dispose of Tether Tokens or use the Services offered by Tether unless you understand the related risks.

This Statement discusses some of the principal risks of Tether Tokens and the Services, but it does not and cannot describe every risk or consideration associated with Tether Tokens and the Services. This Statement utilizes certain terms that are defined in the Terms. Please consult the Terms for further information regarding those terms.

Risks of purchasing, holding and disposing of Tether Tokens and using the Services include, but are not limited to, the following:

1.Market Risk

Secondary Market prices for Tether Tokens can fluctuate and be unpredictable due to a variety of factors outside of Tether’s control. Whether the future market price for a Tether Token will move up or down, or even sustain a market value, is unknowable. There is no assurance that Tether Tokens will maintain their long-term value in the future or that the acceptance of Tether Tokens for payments by mainstream and commercial businesses will continue to grow. A Tether Token may trade at, above or below the unit of Fiat for which such token is redeemable. The market price of Tether Tokens in Secondary Markets could fluctuate in response to conditions in those markets irrespective of the value of the unit of Fiat underlying a Tether Token. The amount of the discount or premium in the market price for Tether Tokens relative to the unit of Fiat for which a Tether Token is redeemable may be affected by the trading activity in Tether Tokens, the ease and costs of redemption, and other factors. Tether cannot control how third parties value Tether Tokens. For purposes of this Statement, the term “Primary Market” refers to users purchasing or selling Tether Tokens directly through the Site and “Secondary Market” refers to any transaction in Tether Tokens other than with users and transactions taking place in the Primary Market.

2.Settlement Risk

Tether may from time to time make Tether Tokens available for purchase subject to minimum purchase and other requirements which are not set forth on the Site. Redemptions of Tether Tokens or exchanges of Tether Tokens for Tether Tokens issued on another protocol may also be subject to requirements imposed by Tether. Tether may amend the Terms at any time, without notice. Transactions and settlement conditions imposed by Tether may not be set forth on the Site at the time of transaction and the period for the settlement of any transaction in Tether Token may depend upon these transaction and settlement conditions. Tether makes no representations or warranties that it will sell or exchange new Tether Tokens on comparable terms or on any terms in the future.

3.Liquidity and Listing Risk

Markets for Digital Tokens can have varying degrees of liquidity. Some markets may be quite liquid while others may be thinner or possibly even illiquid. Thin and illiquid Secondary Markets can experience greater volatility in market prices. Tether Tokens may be issued by Tether on multiple blockchains in its sole discretion. Tether Tokens trading on one blockchain may not be readily exchangeable for Tether Tokens trading on a different blockchain. There is never a guarantee that there will be an active Primary Market or Secondary Market for you to purchase or dispose of Tether Tokens.

4.Risk Related to Reserves

Each Tether Token in circulation is backed by an amount of Reserves equal to the redemption value of the Tether Token. The preparation of transparency disclosures and the valuations of the Reserves may involve uncertainties and judgmental determinations. Independent pricing information about some of the Reserves may not always be available and any assumptions made may include normal trading conditions without a large-scale sale, and valuing certain assets at cost and others at fair value. In some cases, there is limited historical experience upon which to base these estimates and assumptions. Reported information may be adversely affected if assumptions change or if actual circumstances differ from those in the estimates and assumptions. Reserves could be subject to unexpected diminution in value if any of those assumptions prove not to be correct. This may result in delays and other barriers to redemption and sale

5.Risk Related to Redemption of Tether Tokens

Redemption requests must comply with the Terms. The execution of such redemption requests could be subject to postponement or rejection by Tether under certain circumstances. In addition, Tether will reject a redemption request if it is not in proper form or if the fulfillment of the request might be unlawful. Any such postponement or rejection could adversely affect a redeeming holder of Tether Tokens. Tether reserves the right to delay the redemption or withdrawal of Tether Tokens if such delay is necessitated by the illiquidity or unavailability or loss of any Reserves held by Tether to back the Tether Tokens. Redemption is subject to fees and conditions that may make the exercise of your right to redemption impractical or reduce the profit from the exercise of such rights. You should consult your own tax advisors as to the tax consequences of redemption.

6.Risks of Third Parties

Once you send Tether Tokens to an address of a third party, you are subject to a risk that access to, and any claim on, those Tether Tokens may be lost permanently if the Tether Tokens are transferred to an address or wallet that the intended recipient does not control, including as a result of: (i) sending Tether Tokens to an incorrect address; or (ii) the intended recipient no longer holding the private keys to that address. Transferring Tether Tokens to any other person or depositing Tether Tokens with any third party in a custodial relationship has attendant risks. These risks include security breaches, risk of contractual breach, and risk of loss. You should carefully consider the risks of allowing third parties to hold your property for any reason.

7.Risks of Immutable Transactions

Blockchain transactions are immutable. Once a transaction is completed on the blockchain underlying a Tether Token, the transaction is irreversible, and Tether does not have the ability to reverse or recall any transaction. You bear all responsibility for any loss that might be incurred as a result of sending Tether Tokens to an incorrect or unintended blockchain address. None of Tether or its Affiliates have any obligation to track or verify any Tether Token transactions.

8.Conflicts of Interest Risk

From time to time, Tether and its Affiliates may enter into contracts with persons who are related parties. There is a risk that the proximity of the counterparties in related-party transactions may compromise the objectivity and impartiality of decisions relating to the terms of those transactions.

9.Regulatory Risk in Issuance and Transfer

The applicable legal regime and legality of transactions involving Tether Tokens may not be clear and may vary under the laws of different jurisdictions. For example, whether and on what basis a Tether Token may constitute property, an asset, a financial instrument or a right of any kind might vary from one jurisdiction to another. Prospective purchasers or holders of Tether Tokens are responsible for knowing and understanding how the laws apply to them or their property, rights or assets in their jurisdiction.

10.Risks of Regulatory Change and Enforcement Actions

Regulators continue to assess how Digital Tokens, such as Tether Tokens, should be regulated. Any new regulation could potentially affect or impair Tether’s ability to operate and may raise transaction costs, potentially offsetting and/or eliminating many of the key benefits of stablecoins. Changes in the regulatory environment may impact the ability of, or process for, users to acquire and redeem Tether Tokens, and the availability of Secondary Markets. In addition, if Tether fails to comply with changing regulatory regimes, Tether and its Affiliates may be subject to regulatory actions, which may adversely affect Tether and its ability to operate. Tether and its Affiliates have been, are, and may continue to be subject to regulatory and other investigations in various jurisdictions. The outcome of any pending or future regulatory or other investigation could have a materially adverse impact on Tether and its Affiliates and their ability to operate.

11.Commingling and Redemption Risks

Any Tether Tokens transferred to Tether to enable redemptions may be commingled with the Tether Tokens of other users of the Site and with the Tether Tokens of Tether and its Affiliates and service providers. Transferring Tether Tokens to Tether exposes you to risks of loss from, among other things, security breaches from cyber attacks that hack and steal Tether Tokens, electronic or technological failures that impede or prevent access, or recordkeeping errors.

12.Blockchain Network and Protocol Risks

Tether Tokens may be issued by Tether on multiple blockchains in its sole discretion, but Tether does not own or control the blockchain protocols which govern the operation of the Tether Tokens. In general, the underlying protocols are open source and anyone can use, copy, modify, and distribute them. These blockchain networks and protocols may not have the functionality, security, or availability desired by a user of Tether Tokens. Some of the protocols are subject to consensus-based proof of stake validation methods which may allow, by virtue of their governance systems, changes to the associated blockchain or digital ledger, and the operation of the Tether Tokens on such blockchains may be affected accordingly. Protocols are subject to the possibility that miners and users begin using different versions of the protocol, resulting in a fork. Forks of protocols can create security concerns due to reduced network distribution and questions as to protocol operability. These could impact the operation of Tether Tokens on a forked network. In addition, the growth and development of Tether Tokens and their underlying networks and other cryptographic and algorithmic protocols governing the creation, transfer, and usage of Tether Tokens are subject to a variety of factors that are difficult to evaluate, including that Tether maintains and secures crucial administrative cryptographic keys for the operation of Tether Tokens protocols on public blockchains. Breaches in the custody, control and operations associated with these keys could lead to failures in the operation of Tether Tokens. Protocols are subject to the possibility that miners and users begin using different versions of the protocol, resulting in a fork. Forks of protocols can create security concerns due to reduced network distribution and questions as to protocol operability. Where a blockchain or protocol on which Tether Tokens are issued is forked, Tether may elect to suspend Services temporarily or for an extended period of time on little or no notice.

13.Risk of Account or Transfer Freeze

Tether may suspend or terminate your access to the Site or any of the Services, freeze any Tether Tokens held by you, or terminate your Tether Token Wallet, as required by applicable Law or where Tether, in its sole discretion, determines it is prudent to do so or where you have violated, breached, or acted in a manner inconsistent with any provision of these Terms or applicable Law. If Tether Tokens are frozen or destroyed, you will not be able to make transfers of those Tether Tokens to or from your wallet. In the event that you attempt to send Tether Tokens to a sanctioned or suspicious blockchain address, Tether may freeze the Tether Tokens. In certain circumstances, Tether may be required to report suspected illegal activity to applicable law enforcement agencies and you may forfeit any rights associated with your Tether Tokens.

14.No Advice from Tether:

Tether does not provide investment, portfolio management, legal, accounting, tax or other advice, or advice on trading techniques, models, algorithms, or any other schemes. All information provided in connection with your access and use of the Services is for informational purposes only and should not be construed as professional advice. You should not take, or refrain from taking any action based on any information contained on the Site or any other information that we make available at any time. You should not take, or refrain from taking any action based on any information contained on the Site or any other information that we make available at any time. Before you make any financial, legal, or other decisions involving the Services, you should seek independent professional advice from an individual who is licensed and qualified in the area for which such advice would be appropriate.

15.Cyber Security Threats and Operational Challenges

The nature of Digital Tokens may lead to an increased risk of fraud or cyberattack. Tether may experience sophisticated cyberattacks, unexpected surges in activity or other operational or technical difficulties that may cause interruptions in the Services. You are aware of and accept the risk of cyberattacks and operational challenges. You understand that cyberattacks and operational challenges may lead to delays, including delays in the ability to redeem your Tether Tokens. Tether is not responsible for any loss that might arise from any cyberattacks or operational challenges.

16.Transparency

Tether reports information about Tether Tokens and Reserves at tether.to/en/transparency. This information is provided as part of Tether’s continued commitment to transparency, it is not a part of the Terms, and should not be relied upon in a decision to utilize the Services or to hold or transact in Tether Tokens. The information provided is based on the information available to Tether, which may be delayed. In addition, the information is not a representation or warranty to any person except as otherwise agreed in writing by Tether.

17.Litigation Risk

As of the date set forth above in this Statement, Tether and its Affiliates are defendants in ongoing civil litigation proceedings, and may be subject to further litigation (including civil and administrative proceedings). There can be no assurance that Tether will not be added as defendants to further litigation, or that the outcome of any such proceedings will be favourable to Tether and its Affiliates. Any such unfavourable outcome or any other legal proceeding in the future could have a material adverse effect on Tether, its Affiliates and the Reserves.

18.Publicity Risk

Unfavourable media coverage can negatively affect the value of the Tether Tokens on the Secondary Market. Tether, its Affiliates, and Tether Tokens receive a high degree of media and social media coverage around the world. Unfavourable publicity regarding, for example, liquidity, litigation or regulatory activity, the Reserves, privacy practices, terms of service, the use of Tether Tokens for illicit or objectionable ends, has in the past, and could in the future, adversely affect the Secondary Market price of Tether Tokens.