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Risk Disclosure Requirements

Definition

Risk disclosure requirements are legal and regulatory mandates obliging entities to inform consumers and investors about the potential risks associated with financial products or services. In the digital asset sector, these requirements compel crypto platforms and issuers to clearly communicate the volatility, security vulnerabilities, and regulatory uncertainties inherent in cryptocurrencies. Comprehensive disclosures assist investors in making informed decisions and protect them from unexpected losses. They are a critical element of investor protection.