Damex Risk Warning
/Notice in relation to Digital Assets

We at damex.io are happy and proud to be able to serve the growing and changing industries of digital currencies, virtual currencies and tokenised assets. Ultimately we are committed to setting high standards of governance in managing Digital Assets as one of the world’s first few providers of Digital Asset management and wish to provide all of our clients and anyone with whom we engage with as much education on Digital Assets as possible. As a result we wish to remind you of the risks associated with investing and trading in Digital Assets.

Investing and trading Digital Assets are volatile and the prices can go up and down. Like real goods and products, the price of Digital Assets are volatile and are subject to large swings in value and at any time may lose a majority or all of their value. As such, there is an inherent risk that gains or losses will occur as a result of buying, selling or trading anything on any market.

Digital Asset trading also has special risks not generally shared with official nation issued currencies, goods or commodities in a market. Unlike most recognised currencies or commodities and financial instruments, Digital Assets are backed by technology and decentralised systems of trust. Typically with Digital Assets offered by Damex will not have a central bank or authority that can take corrective measures, such as creating or issuing more Digital Assets, in order to protect the Digital Assets value in periods of crises.

Digital Assets may be autonomous or issued by particular legal entities that may be based and domiciled in any jurisdiction in the world. Distributed Ledger Technologies are technology applications and software which by and large share information throughout a number of different jurisdictions and locations using protocols, many of which are open source. As a result such open source protocols are subject to change in their architecture, composition and make-up. As a result, changes may occur and the the underlying protocols are subject to sudden changes in operating rules (also known as “forks”), and that such forks may materially affect the value, function, and/or even the name of any Digital Asset.

In Gibraltar, if a person is carrying on by way of business any activity in storing or transferring value for others using distributed ledger technologies (such as blockchain), this is a regulated activity. Digital Assets are largely unregulated systems and assets in a number of other jurisdictions. However, some jurisdictions ban and impose criminal penalties on the use, creation and/or the legal or beneficial ownership of Digital Assets and individuals should always be alive to the jurisdictions which they may have connections with and how those jurisdictions regulate Digital Assets may involve criminal liabilities, taxation or other penalties.

Digital Assets are susceptible to irrational (or rational) ‘bubbles’ or loss of confidence (usually referred to as ‘FUD’ – Fear, Uncertainty and Doubt), which could collapse demand relative to supply. In particular Digital Asset markets are largely susceptible to consumer sentiment and swings in confidence are particularly volatile. For example, confidence in particular Digital Assets may collapse due to unexpected changes imposed by software developers or others, a change of regulatory position, creation of superior competing alternative Digital Assets, or a deflationary or inflationary spiral. Confidence might collapse because of technical problems such as where Digital Assets are lost or stolen, if hackers or governments are able to affect transactions or compromise and affect the settling and processing of other elements of any particular Digital Asset protocol (for example, a 51% attack). Changes in confidence for any particular Digital Asset  are also inherent due to ongoing reputational and public relation events where principals of any particular creator or entity responsible for aspects of any particular Digital Asset may be involved in litigation, fraudulent activity or other reputational questioning.

Our view at Damex is that individuals should look to Digital Assets to complement their existing investment strategies and lifestyle choices on digital mediums. Ultimately acquiring and holding Digital Assets should not simply be done with a view to consider the financial appreciation or depreciation as the sole metric of the use of Digital Assets. Digital Assets by and large are created with a utility and ultimate use for individuals and therefore acquiring and holding Digital Assets is not simply an investment decision; it is a lifestyle choice as to how individuals may wish to carry out their dealings on digital mediums in the expectation of growing adoption of distributed ledger technologies. Individuals should always carefully assess whether their financial situation and risk appetite is suitable for buying, selling or trading Digital Assets. Damex carries out its own risk assessments and may choose to not accept the new business of individuals, or indeed may choose to discontinue servicing existing clients, whose financial position is not one that may accommodate tolerance for the highly risky nature of trading or holding Digital Assets.

Individuals should be aware of the risks associated with any market maker, platforms or any other process whereby individuals are purchasing Digital Assets using fiat currencies. These may include but are not limited to the risks of disclosing personal information such as identity and bank account information and considering that this information may be compromised. Individuals may also wish to consider the reputational risks associated with using any particular provider for facilitating the purchasing of Digital Assets from fiat as such providers may be involved in ‘mixers’ whereby the true ownership and transaction history of any given Digital Asset wallet is obfuscated by processing payments through a network of wallet addresses. Similarly, individuals should consider the risks associated with the technical elements of owning Digital Asset wallets and also the risks associated in holding any Digital Assets in a ‘hot wallet’ (i.e. on a device connected to the internet) and the risks that they may be susceptible to hacks.

Damex may offer its clients the opportunity to trade particular Digital Assets that are known as stablecoins. Stablecoins are a relatively new form of payment/exchange token that are typically asset-backed (by physical collateral, cash equivalents or Digital Assets) or in the form of an algorithmic ‘stablecoin’ where reserving is automated. Stablecoins are sometimes referred to as currency tokens. Stablecoins are largely unregulated forms of asset and the issuer of a stablecoin offered by Damex.io may be in a jurisdiction outside of jurisdictions from which damex.io operate. Furthermore, clients should note that damex.io is not the regulated issuer, agent or distributor of any stablecoin. Whilst damex.io has considered the stablecoins in which it deals in, damex.io makes no representations or warranties in relation to the adequate reserving or redemption process for any given Digital Asset or stablecoin. Stablecoins traded by Damex may not be covered by any Gibraltar or European electronic money regulation. Any person who may hold a stablecoin may hold a claim against the issuer of the stablecoin, which would not be damex.io and would be subject to such an issuer’s redemption process which damex.io does not provide. Clients acknowledge that stablecoins are issued by private issuers and understand the risk in that the ‘peg’ or ‘value’ of such a stablecoin may lose its weighted 1:1 value when measured against any other particular asset or pricing. This means that clients holding or trading stablecoins may lose all or part of their value when measured against other assets or fiat values.

Clients should be reminded that whilst Damex may recommend various exchanges, Damex is not responsible for the actions of these exchanges and clients should note that these exchanges frequently may experience problems in issuing Digital Assets or issuing fiat in exchange for Digital Assets due to technical issues, regulatory changes and/or decisions, market liquidity and extreme moments of market demand. Please note that given the somewhat experimental nature of some Digital Assets and affiliated technologies, liquidity on certain exchanges may be experienced during moments of high demand.

Ultimately we are committed to safety, security and transparency. We are excited and privileged to be servicing the Digital Asset management space at such an early stage in its development and we are committed to provide clients with the best service, support and education but we cannot always promise perfection during moments of extraordinary high demand. We will continue to update all our clients of any significant changes to risks by updating this page from time to time and we will also endeavour to also include updates on our website or other social media pages.

V0.04 November 2022

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Damex
Ziglu Migration

December 2024

Frequently Asked Questions

As you may have read, Damex’s retail arm has been acquired by Ziglu, one of the world’s leading licensed cryptocurrency platforms. We’re ready to officially join forces, so you can benefit from Ziglu’s platform.

If you are a UK or Gibraltar retail customer, we invite you to transfer your account and services with Ziglu. 

If you are an EEA customer migration to Ziglu will be available in phase two, expected in Q1 2025.

The transfer process of your Damex account to Ziglu is simple and secure.

Simply follow the link in your email to create your Ziglu account, where you will be guided through the necessary steps to confirm your account details and agree to Ziglu’s Terms of Service. 

Suppose you are already a Ziglu customer then, good news! In that case, simply email us at [email protected] requesting a balance transfer to your Ziglu account. Once we’ve done all the necessary verification we will connect your Ziglu account and you will see your Damex funds reflected there within 5 business days, at no cost to you.  

Once you’ve been verified as a Ziglu customer, Damex will receive a prompt and any remaining balance on your Damex App will be automatically transferred to your Ziglu account within 5 business days, at no cost to you.

Accounts & Payments

  • GBP Safeguarded Account
  • FPS Deposits & Withdrawals
  • Confirmation of Payee
  • Open Banking – Inbound Payments
  • Peer to Peer payments (transfer instantly to other Ziglu customers)
  • Standing Orders (outbound)

Exchange & Trading Features

  • FX – EUR and USD Exchange
  • Crypto – 15+ curated cryptocurrencies
  • Crypto Price Alerts – daily price notification and volatility notifications
  • Trading types: instant market order / recurring orders / target price orders – exchange when market hits a target price set by the user
  • Crypto – Financial Promotions Assessment (customer required to complete prior to accessing Crypto features)

Crypto Yield Accounts

  • Ziglu Boost accounts with up to 6% yield on 6 currencies
  • Yield paid weekly with instant deposit & withdrawals to the account

Cards [UK only, GIB feature access from 2025]

  • Physical Card
  • Virtual Card
  • Mobile Wallet – Apple Pay & Google Pay

Settings & Other

  • marketing preferences – SMS/ Email/ Push Notification
  • contact customer support – email only

There is no charge to a customer when ordering either a Virtual or Physical card.

Ziglu does not currently support direct debits for the account.  It’s recommended that customers change any required direct debits to a supported account.

  • Ziglu customers can deposit and withdraw GBP onto the platform using their safeguarded account.
  • Customers can also instantly transfer Fiat and Crypto to other Ziglu customers using peer-to-peer transfers
  • Customers are also able to use their GBP, EUR, and USD balances to pay and make purchases at vendors using their Ziglu Mastercard Debit Card

Transactions will be charged to the currency the card has been issued in. Any transactions that take place outside of the issued currency will incur the Mastercard FX rate fee.  When traveling there is the option to temporarily convert currency into either USD or EUR with a favourable FX rate, transactions will then be linked to that currency.  

  • Damex customers have to download the latest version of the Ziglu app from their device app store
  • Customers are then to complete the sign up process to become a Ziglu customer
  • If you’re already a Ziglu customer then X

More information on asset support and services offered by Ziglu for Damex clients can be found here

Not all assets provided by Damex are offered by Ziglu. If you own one of the following assets, you must exchange or withdraw it from the Damex App before signing up with Ziglu:

  • Damex Token 
  • USDT 
  • USDC 

Important Update for Damex Token Holders

If you currently hold Damex tokens and wish to continue trading it after the specified transition date, please note that Ziglu does not offer support for this asset. However, you can still trade (buy, sell & hold) your Damex Token by creating an account with Coinstore.

Here’s what you will need to do:

  1. Create a Coinstore Account: Use this link to sign up – Sign Up on Coinstore.
  2. Transfer Your Tokens: Ensure you transfer your Damex Token to Coinstore before the transition date to avoid any disruptions in trading.

Remember, transferring to an ERC-20 address is crucial for compatibility with Coinstore’s platform. If you encounter any issues or need further guidance, please reach out to customer support for assistance.

Please act promptly to avoid disruption of your trading activities with Damex Token.

If you do not wish to transfer your Damex account to Ziglu, you can withdraw your assets and close your account.

  • Max number of ATM withdrawals allowed (per day): 10
  • Max number of ATM withdrawals allowed (per 4 days): 30
  • Max value of ATM withdrawals allowed (per day): £500
  • Max number of POS transactions allowed (per day): 50
  • Max value of POS transactions allowed (per day): £10,000
  • Max value of POS transactions allowed (per 4 days): £40,000
  • Max number of Virtual Cards allowed in a 28 day period: 5
  • Max number of Virtual Cards allowed: 20

Apple Pay is currently not present in Gibraltar