1. What services does Zumo Financial Services Ltd (Zumo) provide for its users?
The Zumo App consists of Wallets. Some features may not be available to all users. Subject to your eligibility, you can use the App to:
– View the balance of your Virtual Currency in your Wallets
– Instruct the exchange (or conversion) of your Virtual Currency in your Custodian Wallet from one cryptocurrency to another
– Instruct the exchange or conversion or your Virtual Currency in your Custodian Wallet into and from pounds sterling (GBP) if you hold an e-Money Account
– Check the fluctuating value of your Virtual Currency in your Wallets
– Transfer Virtual Currency between your Wallets
– Transfer Virtual Currency from your Custodian Wallet to another User’s Custodian Wallet
– Accept a transfer of Virtual Currency into your Custodian Wallet from another User’s Custodian Wallet
– Request a transfer of Virtual Currency to your Custodian Wallet from another User’s Custodian Wallet
– Transfer Virtual Currency from your Non-Custodian Wallet to another wallet held outside the Zumo App
– Hold a Debit Card provided by Modulr FS and use this card to spend funds in your e-Money Account.
2. As a Zumo client, what should I be aware of in terms of my rights and obligations?
Your rights and responsibilities when using Zumo are outlined in the Terms & Conditions. Please make sure you read them carefully. Essentially, Zumo offers services for exchanging crypto assets and acts as a custodian for your crypto holdings (with The Zumo Trade wallet).
With the Zumo Trade wallet, Zumo acts as the custodian, but you own the crypto assets within. And with the Zumo Infinite (non-custodial) wallet, you control your funds and can access them using any other non-custodial service provider.
3. Is it possible to lose all the money I invest in crypto assets with Zumo?
Yes, crypto investments come with risks due to their volatile nature. The value of a cryptocurrency is not stable and can decrease to zero.
Remember, you bear all the risk of loss of value in the crypto assets held in your Zumo wallets. All your investment is at risk because the exchange rate of a cryptocurrency is volatile and not guaranteed and you can potentially lose it all.
4. How can I grasp the complexities and risks of crypto investments?
Before investing, familiarise yourself with all the relevant and reliable information about the crypto asset you would like to invest in. And remember, selling your cryptocurrency might incur tax obligations. If you are unsure, consult a financial advisor.
Buying crypto assets expose you to a number of risks, including but not limited to:
* Market Dynamics
Cryptocurrency trading faces considerable market risks and volatility. The value can swing dramatically, often without prior indication. An asset’s previous success doesn’t guarantee future growth. Remember, investments can decrease in value (including going to zero) and you might not recuperate what you invested.
* Liquidity Concerns
Some cryptocurrencies may not be readily convertible to cash due to a lack of liquidity, meaning exiting a position could be challenging, especially during sharp price shifts.
Zumo actively works to reduce the risk of low liquidity by offering cryptocurrencies that have a large and stable supply.
* Service Availability
The availability of services like Zumo is not always guaranteed. Service interruptions, unplanned outages or network issues may hinder your ability to perform various crypto operations when needed.
* Third-party Involvement
Services like Zumo might collaborate with third-party entities, such as banks or payment providers. Your activities could then be governed by these parties’ terms and conditions, and any losses they may cause are not covered by Zumo.
* Security Measures
While Zumo strives for top-tier security, it’s impossible to totally eradicate all security risks. You are responsible for protecting your account details and access to your wallets. Unauthorised or deceitful transactions, once made, might be irrevocable and unrecoverable.
* Inherent Digital Asset Risks
Cryptocurrencies and their foundational technologies come with a number of intrinsic risks, including but not limited to:
– Flaws, hacks, unexpected errors, or unforeseen situations impacting the crypto or its supporting technology.
– Permanent transaction nature, making losses from accidental or deceitful activities non-recoverable.
– Technological evolutions potentially rendering a cryptocurrency obsolete.
– Transactional delays, leading to unexpected settlement dates.
– Potential threats to the cryptocurrency’s underlying protocol or technology, such as Distributed Denial-of-Service (DDoS) attacks, phishing, hacking, misinformation campaigns, malware, smurfing, spoofing, double spending, majority-mining, consensus-based or other mining attacks, forks, and more.
* Continuous Risks Monitoring
Crypto markets operate non-stop, 24 hours a day, 7 days a week. Prices can change dramatically at any moment, including during off-business hours.
* Digital Communication Risks
Relying on electronic means to communicate with platforms like Zumo has its issues. Messages can be lost, delayed, intercepted, or not delivered. Whitelist Zumo emails or regularly check your spam folder for service messages.
* Currency Fluctuation
Exchanging your crypto to a FIAT currency is subject to market exchange rate fluctuations, affecting your profit or loss.
* Regulatory Changes
The legal landscape around cryptocurrencies is evolving. New laws or regulations can significantly affect the value of your investments, and this varies across different regions.
Investing in cryptocurrencies demands caution and a thorough understanding of the associated risks. Always do your due diligence and stay informed.
5. Are crypto assets values highly unpredictable and volatile? How does this affect my investment?
Indeed, crypto asset values can be very volatile. Their value is determined by market demand and can swing up or down anytime and quickly. It is not possible to reliably predict the long-term price of crypto assets, even with AI. To learn more about crypto investing and risk you can consult this guide on the site of the FCA: https://www.fca.org.uk/investsmart
6. How can I reduce the risks associated with holding crypto assets?
Protect your Zumo App login details and your back up phrase (for your Zumo Infinite wallet) just as you would protect access to your regular bank accounts.
7. If Zumo goes bankrupt, what becomes of my crypto holdings?
If they’re in your Zumo Trade (custodial) wallet, it’s recommended you convert them to fiat (£GBP), but be aware you may be unable to recover your crypto assets if they are under the control of an Administrator. If you’re using Zumo Infinite (non-custodial) wallet, you control your funds and can access them using any other non-custodial service provider.
8. Can I cash out my crypto assets anytime I wish?
Yes, provided there are sufficient funds in your account and the exchange service is functioning properly.
9. Which events may prevent you from selling your investment when you want to?
Several events, including technology outages, illiquidity in the market for your particular crypto asset(s) or a cyber-attack, may prevent you from selling your crypto asset(s) when you want.
10. How is Zumo Financial Services regulated?
Zumo is registered (not Authorised and Regulated) with the Financial Conduct Authority as per the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, with subsequent amendments.
With this registration, Zumo can provide crypto asset services to its customers, including managing crypto asset exchanges (buying and selling).
11. Who is responsible for supervising crypto asset businesses in the United Kingdom?
The Financial Conduct Authority is responsible for supervising crypto asset businesses in the United Kingdom.
12. If I suffer a loss via Zumo, will the Financial Services Compensation Scheme cover it?
Crypto asset investments through Zumo don’t come with the protections of the Financial Ombudsman Service (FSCS) or Financial Services Compensation Scheme. Investing in crypto is not the same as putting money in a savings account.
13. How does investing in crypto assets compare to other investments like stocks or ISAs?
Other investment types might fall under different regulatory guidelines. Crypto investments have unique characteristics and risks compared to traditional investments, including carrying more risk of capital loss.
14. What’s a sensible amount of my total assets to invest in high-risk investments, including crypto assets?
It’s generally advised not to allocate more than 10% of your overall assets in high-risk investments. Diversification and spreading your money across different investments makes you less dependent on any one to do well.
Unless you are a high net worth individual (income greater than £100,000 per annum or assets of greater value than £250,000) or certificated sophisticated investor, then we expect you to invest no more than 10% per annum.
Risk Warning & Disclaimers:
The information regarding investment opportunities mentioned on this website are only for informational and promotional reasons and should not be considered as an invitation or encouragement to participate in any investment actions.
