Risk Disclosure Statement

Risk Disclosure Statement

The risk of loss in trading commodity futures contracts can be substantial. You should, therefore, carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should be aware of the following points:

(1)You may sustain a total loss of the funds that you deposit with your broker to establish or maintain a position in the commodity futures market, and you may incur losses beyond these amounts. If the market moves against your position, you may be called upon by your broker to deposit a substantial amount of additional margin funds, on short notice, in order to maintain your position. If you do not provide the required funds within the time required by your broker, your position may be liquidated at a loss, and you will be liable for any resulting deficit in your account.

(2)The funds you deposit with a futures commission merchant for trading futures positions are not protected by insurance in the event of the bankruptcy or insolvency of the futures commission merchant, or in the event your funds are misappropriated.

(3)The funds you deposit with a futures commission merchant for trading futures positions are not protected by the Securities Investor Protection Corporation even if the futures commission merchant is registered with the Securities and Exchange Commission as a broker or dealer.

(4)The funds you deposit with a futures commission merchant are generally not guaranteed or insured by a derivatives clearing organization in the event of the bankruptcy or insolvency of the futures commission merchant, or if the futures commission merchant is otherwise unable to refund your funds. Certain derivatives clearing organizations, however, may have programs that provide limited insurance to customers. You should inquire of your futures commission merchant whether your funds will be insured by a derivatives clearing organization and you should understand the benefits and limitations of such insurance programs.

(5)The funds you deposit with a futures commission merchant are not held by the futures commission merchant in a separate account for your individual benefit. Futures commission merchants commingle the funds received from customers in one or more accounts and you may be exposed to losses incurred by other customers if the futures commission merchant does not have sufficient capital to cover such other customers' trading losses.

(6)The funds you deposit with a futures commission merchant may be invested by the futures commission merchant in certain types of financial instruments that have been approved by the Commission for the purpose of such investments. Permitted investments are listed in Commission Regulation 1.25 (17 CFR 1.25) and include: U.S. government securities; municipal securities; certain money market funds; certain foreign sovereign debt; and U.S. Treasury exchange-traded funds. The futures commission merchant may retain the interest and other earnings realized from its investment of customer funds. You should be familiar with the types of financial instruments that a futures commission merchant may invest customer funds in.

(7)Futures commission merchants are permitted to deposit customer funds with affiliated entities, such as affiliated banks, securities brokers or dealers, or foreign brokers. You should inquire as to whether your futures commission merchant deposits funds with affiliates and assess whether such deposits by the futures commission merchant with its affiliates increases the risks to your funds.

(8)You should consult your futures commission merchant concerning the nature of the protections available to safeguard funds or property deposited for your account.

(9)Under certain market conditions, you may find it difficult or impossible to liquidate a position. This can occur, for example, when the market reaches a daily price fluctuation limit (“limit move”).

(10)All futures positions involve risk, and a “spread” position may not be less risky than an outright “long” or “short” position.

(11)The high degree of leverage (gearing) that is often obtainable in futures trading because of the small margin requirements can work against you as well as for you. Leverage (gearing) can lead to large losses as well as gains.

(12)In addition to the risks noted in the paragraphs enumerated above, you should be familiar with the futures commission merchant you select to entrust your funds for trading futures positions. The Commodity Futures Trading Commission requires each futures commission merchant to make publicly available on its Web site firm specific disclosures and financial information to assist you with your assessment and selection of a futures commission merchant. Information regarding this futures commission merchant may be obtained by visiting our Web site, at the address given in your account documents.

ALL OF THE POINTS NOTED ABOVE APPLY TO ALL FUTURES TRADING WHETHER FOREIGN OR DOMESTIC. IN ADDITION, IF YOU ARE CONTEMPLATING TRADING FOREIGN FUTURES OR OPTIONS CONTRACTS, YOU SHOULD BE AWARE OF THE FOLLOWING ADDITIONAL RISKS:

(13)Foreign futures transactions involve executing and clearing trades on a foreign exchange. This is the case even if the foreign exchange is formally “linked” to a domestic exchange, whereby a trade executed on one exchange liquidates or establishes a position on the other exchange. No domestic organization regulates the activities of a foreign exchange, including the execution, delivery, and clearing of transactions on such an exchange, and no domestic regulator has the power to compel enforcement of the rules of the foreign exchange or the laws of the foreign country. Moreover, such laws or regulations will vary depending on the foreign country in which the transaction occurs. For these reasons, customers who trade on foreign exchanges may not be afforded certain of the protections which apply to domestic transactions, including the right to use domestic alternative dispute resolution procedures. In particular, funds received from customers to margin foreign futures transactions may not be provided the same protections as funds received to margin futures transactions on domestic exchanges. Before you trade, you should familiarize yourself with the foreign rules which will apply to your particular transaction.

(14)Finally, you should be aware that the price of any foreign futures or option contract and, therefore, the potential profit and loss resulting therefrom, may be affected by any fluctuation in the foreign exchange rate between the time the order is placed and the foreign futures contract is liquidated or the foreign option contract is liquidated or exercised.

THIS BRIEF STATEMENT CANNOT, OF COURSE, DISCLOSE ALL THE RISKS AND OTHER ASPECTS OF THE COMMODITY MARKETS.

I hereby acknowledge that I have received and understood this risk disclosure statement.

Statement on property other than cash

Required by CFTC Regulation 1.55(p) because margin is in USDC; the text of 17 CFR 1.55(p)(2).

THIS STATEMENT IS FURNISHED TO YOU BECAUSE REGULATION 1.55(p) OF THE COMMODITY FUTURES TRADING COMMISSION REQUIRES IT FOR REASONS OF FAIR NOTICE UNRELATED TO THIS COMPANY'S CURRENT FINANCIAL CONDITION.

1. YOU SHOULD KNOW THAT IN THE UNLIKELY EVENT OF THIS COMPANY'S BANKRUPTCY, PROPERTY, INCLUDING PROPERTY SPECIFICALLY TRACEABLE TO YOU, WILL BE RETURNED, TRANSFERRED OR DISTRIBUTED TO YOU, OR ON YOUR BEHALF, ONLY TO THE EXTENT OF YOUR PRO RATA SHARE OF ALL PROPERTY AVAILABLE FOR DISTRIBUTION TO CUSTOMERS.

2. THE COMMISSION'S REGULATIONS CONCERNING BANKRUPTCIES OF COMMODITY BROKERS CAN BE FOUND AT 17 CODE OF FEDERAL REGULATIONS PART 190.

Additional risk disclosures

Perpetual futures, margin in USDC, self-custodied wallets and on-chain settlement

These disclosures are given by HypeStrat Markets LLC (the “Firm”) in addition to the Risk Disclosure Statement, not in place of it. They describe risks particular to the contracts the Firm offers, to margin in USDC, and to trading and settlement on a blockchain. They cannot describe every risk. Trading these contracts is not suitable for many members of the public. Read them carefully and ask the Firm about anything you do not understand.

In these disclosures, “Exchange” means the designated contract market that lists the contracts; “Clearing House” means the derivatives clearing organization that clears them; “Venue” means the system through which orders are matched and positions are recorded and settled on the Hyperliquid blockchain (the “Network”); “Rules” means the rules of the Exchange and the Clearing House; and “Wallet” means a blockchain address you control with your own private keys and have registered to your account.

1Perpetual futures

1.1No expiry. Unlike most futures contracts, a perpetual futures contract has no expiry or delivery date. A position stays open until you close it or it is liquidated, and it is exposed to price changes and funding payments for as long as it is open.

1.2Funding payments. To keep the contract’s price close to the price of the underlying asset, the Rules require periodic funding payments between holders of long and short positions. You may pay or receive funding at each interval. The rate can change sharply and without notice, and over time funding can exceed the profit on a position or add to its loss. Funding paid reduces your margin and can lead to liquidation.

1.3Price differences. The contract’s price can differ, sometimes widely, from the price of the underlying asset on other markets and from the mark price the Rules use to value your position and to trigger liquidation.

1.4Price limits. The contracts may have no daily price fluctuation limits. Prices can move very far in a short time, and the protection of a daily limit mentioned in the Risk Disclosure Statement may not apply.

1.5Underlying digital assets. The digital assets underlying the contracts, such as bitcoin and ether, are highly volatile, trade on many venues worldwide that may be lightly regulated, and can be affected by technical failures, concentrated holdings, thefts and changes in law. Their value can fall to zero.

2Trading at all hours

2.1The contracts trade 24 hours a day, seven days a week, including weekends and U.S. holidays. Prices, funding and your margin change while you are asleep or away, and liquidation can happen at any hour.

2.2The Firm’s customer support is available during its published support hours and may not be available when markets move. Do not rely on reaching the Firm to manage a position.

2.3For confirmations and statements the Firm’s trading day ends at 5:00 p.m. Eastern Time; activity after that time appears on the next day’s records.

2.4Liquidity can be thin at some hours. Thin markets widen spreads and worsen the prices at which orders and liquidations are filled.

3Leverage, margin and liquidation

3.1Leverage. Leverage magnifies gains and losses. A small price move can use up all of your margin.

3.2Automatic liquidation. When your margin falls below the maintenance requirement, the Clearing House or the Venue may liquidate your position automatically, in whole or in part, without asking you or the Firm and without notice. Liquidation is at market prices, which in fast markets may be far worse than the liquidation price shown to you, and the Rules may charge a liquidation fee.

3.3Loss beyond your deposit. If a liquidation does not cover your loss, you owe the Firm the deficit.

3.4Auto-deleveraging and loss sharing. If the market cannot absorb a liquidation, the Rules may close or reduce profitable positions of other participants, which could include yours, at a price the Rules set, even though you did nothing wrong. Any insurance or guarantee fund of the Clearing House may not be enough to cover losses.

3.5Changing requirements. The Clearing House and the Firm can raise margin requirements at any time, including for open positions. You may have to deposit more USDC quickly or have positions closed.

3.6Stop orders. Stop orders and other contingent orders may not be filled at or near the price you chose in a fast market, or at all while the Venue or the Network is disrupted.

4USDC as margin

4.1Not money in a bank. USDC is a digital asset issued by a private company. It is not legal tender, not a bank deposit, and not insured by the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation.

4.2Loss of the peg. USDC is designed to be redeemable for one U.S. dollar, but its market value can fall below one dollar, for example if confidence in its issuer or its reserves weakens or if redemptions are suspended. A fall in its value reduces your margin and can cause liquidation even when your positions are profitable.

4.3Haircuts. The Clearing House and the Firm may value USDC at less than its face amount for margin purposes and may change that discount. Under CFTC Staff Letter 26-05 an FCM values customer digital-asset margin as the Clearing House values it, after the Clearing House’s haircut.

4.4Issuer controls. The issuer of USDC may be able, under its terms, to freeze or block USDC held at particular blockchain addresses, for example to comply with a legal order. USDC frozen at an address used by you, the Firm or the Clearing House could become unavailable.

4.5Changes in law. Stablecoins are subject to new and changing federal and state law. A change in law, or in the status of USDC under it, could require the Firm to stop accepting USDC or to ask you to replace it on short notice.

4.6Deposits and withdrawals. Deposits and withdrawals are blockchain transactions and generally cannot be reversed. USDC sent to the wrong address, on the wrong network or in the wrong form may be lost for good. Transfers can be delayed by network congestion or by the Firm’s compliance screening, and may carry network fees.

5Your Wallet

5.1You control your keys. Your Wallet is secured by private keys that only you hold. The Firm does not hold them and cannot recover them. If you lose your keys or recovery phrase, you may lose access to your Wallet and the ability to sign orders or receive withdrawals.

5.2Theft and fraud. Anyone who obtains your keys, or tricks you into signing a transaction, can take assets from your Wallet or place orders, and the Firm may be unable to stop or reverse it. Beware of fake websites, fake support staff, malicious browser extensions and messages asking you to sign. The Firm will never ask for your private keys or recovery phrase.

5.3Wallet software. Wallet applications and devices are made by others and may contain defects or be discontinued.

6Blockchain, smart-contract and oracle risk

6.1Smart contracts. The Venue and the movement of USDC rely on software (smart contracts) that may contain errors, may be exploited, and may be changed by developers or governance processes outside the Firm’s control. An exploit could cause losses that are never recovered.

6.2Bridges. Where USDC moves between blockchains through a bridge, the bridge’s own contracts and operators add a further risk of delay, failure or loss.

6.3Oracles and index prices. Mark prices, funding rates and liquidation levels are calculated from prices that oracles or index providers take from other markets. Those prices can be wrong, late or manipulated, and a wrong price can trigger a liquidation that would not otherwise have happened. Whether an affected trade is adjusted depends on the Rules.

6.4Network failures. The Network can halt, slow down, split into competing versions, rewrite recent history or suffer an outage or attack. While that lasts you may be unable to place or cancel orders, add margin or withdraw, and your positions stay exposed and may be liquidated when the Network resumes.

6.5A public record. Transactions on the Network, including your Wallet address and its activity, are public and permanent.

6.6Electronic trading. The systems of the Firm, the Exchange, the Clearing House and the Venue, and your own devices and internet connection, can fail, be delayed or be attacked. The Firm cannot promise uninterrupted access.

7How your funds are protected, and the limits of that protection

7.1Segregation. The Commodity Exchange Act and CFTC Regulation 1.20 require a futures commission merchant to account separately for futures customer funds, to segregate them as belonging to its customers, and to hold them only with a bank or trust company, a derivatives clearing organization or another futures commission merchant, in accounts that identify them as segregated customer funds. The Firm may not use customer funds for itself or to secure its own obligations (CFTC Regulation 1.20(e)).

7.2Held together. Customer funds are held together for all customers, not in an account for you alone, as paragraph (5) of the Risk Disclosure Statement explains.

7.3No insurance. Segregation is not insurance. Your funds are not covered by deposit insurance or by the Securities Investor Protection Corporation.

7.4If the Firm became bankrupt. A bankruptcy of the Firm would be handled under the commodity broker provisions of the Bankruptcy Code (subchapter IV of chapter 7) and Part 190 of the CFTC’s regulations. In plain terms:

(a)Customer property is kept apart from the Firm’s own property. Customers whose accounts are segregated, such as you, are paid from it ahead of accounts carried for the Firm itself, its officers, directors, larger owners and controlling affiliates (17 CFR 190.00(c)(3); “proprietary account” in CFTC Regulation 1.3).

(b)The trustee will try first to transfer customers’ open positions, with all or part of their account equity, to another futures commission merchant (17 CFR 190.00(c)(4)). Positions that are not transferred are generally liquidated.

(c)If customer property in your account class is not enough to pay every customer in full, all customers in that class bear the same proportional loss, including on property specifically traceable to them (17 CFR 190.00(c)(5); CFTC Regulation 1.55(p)).

(d)You would file a claim for your net equity, and you might not receive all of your property back, or receive it quickly.

(e)If your account is designated as a hedging account, the trustee may, where practicable, treat its open contracts as property specifically identifiable to you (17 CFR 190.03(c)(2)). See the Hedger or Speculator Election.

8How the Firm is paid, and conflicts of interest

8.1The Firm charges you no commission of its own. It is paid from the fees you pay to the Exchange and the Clearing House, which pass part of those fees to the Firm. This means the Firm earns more when you trade more.

8.2Affiliates of the Firm may hold the digital assets underlying the contracts or USDC, or have other interests in the Venue.

9Law, tax and the product’s status

9.1The legal treatment of digital assets, stablecoins and perpetual contracts is developing and may change. A change could restrict or end trading in the contracts, change margin requirements, or require the Firm to close positions.

9.2The tax treatment of the contracts and of USDC is uncertain in some respects. Consult your own tax adviser.

10No advice and no guarantee

The Firm does not give investment advice. It does not guarantee you against loss, limit your loss, or waive margin calls (CFTC Regulation 1.56). Past results do not predict future results.

I have received and understood these additional risk disclosures.

You accept this document electronically on the application page. The version you accepted and the time are recorded.