LEGAL
Risk Disclosure
Effective: April 27, 2026
Platform Positioning
J.P. Charles Digital Assets offers event-based prediction markets and is not a stock trading platform, broker-dealer, investment adviser, derivatives exchange, or registered financial institution. The Company is not registered with the U.S. Commodity Futures Trading Commission (CFTC) as a Designated Contract Market (DCM) under Section 5 of the Commodity Exchange Act (7 U.S.C. § 7), as a Swap Execution Facility (SEF), or as a Derivatives Clearing Organization (DCO), and is not registered with the U.S. Securities and Exchange Commission (SEC) as a national securities exchange or alternative trading system.
READ THIS ENTIRE DOCUMENT BEFORE USING THE SERVICES. Participation in event-based prediction markets and digital-asset transactions involves substantial risk, including the risk of total loss. This disclosure does not enumerate every risk — additional unforeseen risks may exist.
01.TOTAL LOSS OF CAPITAL
Participation in event-based prediction markets may result in the total loss of your staked USDC. Past performance of any market or signal surfaced by the platform is not indicative of future results. Do not stake funds you cannot afford to lose.
02.CFTC CHARACTERIZATION RISK
Event-based prediction markets in the United States exist in an evolving regulatory environment. The U.S. Commodity Futures Trading Commission (CFTC) has previously characterized similar event-market platforms — including Polymarket (In re Blockratize, Inc. d/b/a Polymarket, CFTC Docket No. 22-09, Jan. 2022) — as offering "binary options" or "event contracts" that require operation as a Designated Contract Market (DCM) under Section 5 of the Commodity Exchange Act (7 U.S.C. § 7) and Part 38 of CFTC regulations (17 C.F.R. Part 38). The Company is not a DCM. Future CFTC, SEC, FinCEN, or state-level enforcement, rulemaking, or interpretive guidance may render some or all platform markets subject to mandatory registration, restructuring, geographic restriction, or wind-down. Participants may lose access to the platform, including the ability to enter, exit, or claim resolution proceeds on existing positions, with little or no notice. [REVIEW WITH COUNSEL — current CFTC, SEC and state-level prediction-market enforcement posture]
03.JURISDICTIONAL RESTRICTIONS
Access to the Services is restricted in certain jurisdictions and may become further restricted at any time. The Company may employ IP-based geolocation, wallet-address screening, and other technical or contractual means to detect and block access by persons resident in or accessing from prohibited jurisdictions. If you become a Restricted Person after entering a position — for example, due to relocation, sanction designation, or regulatory change — your access to the Services, including settlement of existing positions, may be terminated. The Company has no obligation to provide individual notice of jurisdictional changes or to facilitate withdrawal of funds where doing so would conflict with applicable law. [REVIEW WITH COUNSEL — restricted-jurisdiction list, U.S. state-by-state prediction-market analysis]
04.SMART CONTRACT RISK
The JPCharlesPredictionMarket smart contracts have not undergone a formal third-party security audit as of the effective date. Bugs, exploits, or unexpected behavior in smart contract code may result in the permanent, irrecoverable loss of funds. Deployment on public blockchain infrastructure means bugs cannot be "patched" — only new contracts can be deployed. [REVIEW WITH COUNSEL — audit status, unaudited contract disclosure standards]
05.MANUAL ORACLE RESOLUTION RISK
At present, market resolution is performed by a contract owner / oracle role at or after the resolution date by reference to the named public-data source. This introduces centralized counterparty risk: a malicious, compromised, or unavailable oracle role may resolve markets incorrectly or fail to resolve them at all. The named public-data source may itself become unavailable, ambiguous, or be subsequently corrected, in which case the oracle role's interpretation will govern. The contract retains a refund-on-ambiguity outcome; in such cases participants receive their stake without profit or loss. Automated resolution against trustless data feeds is on the V2 roadmap but not yet implemented. [REVIEW WITH COUNSEL — disclosure standards for centralized resolution authority]
06.SECURITIES-LAW CHARACTERIZATION RISK
Certain catalyst events referenced by platform markets — including earnings releases, FDA decisions affecting publicly traded biotechnology companies, partnership announcements, and clinical-trial readouts — relate directly or indirectly to the price of securities issued by U.S.-listed companies. The Company makes no representation that participation in these markets is or is not subject to the federal or state securities laws (including the Securities Act of 1933, the Securities Exchange Act of 1934, and equivalent state "blue sky" statutes). Future regulatory developments or enforcement actions may classify some or all such markets as swaps, security-based swaps, futures contracts, options on securities, or unregistered securities offerings. [REVIEW WITH COUNSEL — SEC and state securities analysis of catalyst markets referencing security prices]
07.MARKET & LIQUIDITY RISK
Event-based markets may have thin liquidity, particularly for newly listed or low-volume markets. Wide spreads between YES / NO odds may result in adverse entry and exit prices for participants who attempt to transfer positions before resolution. Markets may not resolve within the expected timeframe if the named data source is delayed, ambiguous, or disputed.
08.DATA ACCURACY RISK
Screener data is derived from third-party providers including Polygon.io (price/volume) and Financial Modeling Prep (float and corporate-action data). These sources may contain errors, delays, or gaps. Float figures change with secondary offerings, share buybacks, ATM programs, and insider lock-up expirations. Never rely solely on screener data for any participation decision.
09.BLOCKCHAIN & NETWORK RISK
Transactions on the Polygon network are subject to network congestion, gas fee spikes, chain reorganizations, validator-set changes, and protocol upgrades. Failed or delayed transactions may prevent timely participation in markets or withdrawal of funds. Bridge, cross-chain, and Layer-2 operations carry additional risk including loss of funds in transit.
10.CUSTODY & KEY RISK
The Company does not custody participant funds. Users are solely responsible for the security of their wallet private keys, seed phrases, and connected wallet applications. Loss of private keys results in permanent loss of access to funds. The Company cannot recover lost keys or reverse on-chain transactions.
11.POSITION NFT RISK (V2)
When implemented, ERC-721 position NFTs representing prediction-market stakes may be transferred or sold before market resolution. NFT marketplaces are subject to their own risks including liquidity, counterparty, and platform risk. The Company does not guarantee secondary-market liquidity for position NFTs.
12.TAX RISK
Gains and losses from prediction-market participation and digital-asset transactions may be taxable events in your jurisdiction. The Company does not provide tax advice and does not currently issue Form 1099 or any equivalent informational return. Consult a qualified tax professional regarding your obligations. [REVIEW WITH COUNSEL — reporting obligations, Form 1099 issuance threshold analysis, FATCA / CRS implications]
13.NO INVESTOR PROTECTIONS
Because the Company is not a registered DCM, SEF, broker-dealer, or other regulated financial institution, participation in platform markets does not benefit from investor protections that would apply to comparable activity at a registered venue, including (without limitation) Securities Investor Protection Corporation (SIPC) insurance, CFTC customer-fund segregation rules, or the bankruptcy protections afforded to customers of a Futures Commission Merchant (FCM). Participants are not "customers" within the meaning of those regimes.
THIS DOCUMENT CONSTITUTES THE RISK DISCLOSURE OF J.P. CHARLES DIGITAL ASSETS AND IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY. IT DOES NOT CONSTITUTE LEGAL, FINANCIAL, TAX, OR INVESTMENT ADVICE. THIS DISCLOSURE IS NOT EXHAUSTIVE; ADDITIONAL UNFORESEEN RISKS MAY EXIST. CONSULT QUALIFIED PROFESSIONALS BEFORE PARTICIPATING IN ANY EVENT-BASED PREDICTION MARKET OR DIGITAL-ASSET TRANSACTION. [REVIEW WITH COUNSEL — standard risk disclosure language, jurisdiction-specific supplements]