General Risks Warnings & Disclosure

Before using Baola services provided by Nuvo El Salvador S.A de C.V, it’s essential that you fully understand the associated risks and ensure you can manage them. This risk warning highlights some, but not all, of the risks related to holding, using and transacting with digital assets, as well as utilizing our services.

We encourage you to conduct thorough research to determine if Baola’s services align with your needs. If you are unsure or do not fully understand the risks, we advise against using our services or depositing funds.

This risk disclosure provides a general overview of potential risks but does not cover all possible scenarios. This notice does not relieve the User of their responsibility to understand the technological, economic, and legal aspects of digital currencies and to manage these risks carefully based on their own knowledge of the technology, digital currencies, and their volatility. Risks are constantly evolving, and significant additional risks may apply. It’s important to regularly review and stay informed through independent research. Furthermore, the user is hereby informed that a Virtual Asset is not legal tender in the Argentine Republic; therefore, it is neither issued nor backed by the government or national authorities.

As risks are dynamic, Baola will update this page periodically to reflect any changes.

We warn you that any virtual asset or cryptocurrency may be canceled, lost, or spent repeatedly, it may lose all or most of its value, due to deviations, restorations, attacks, or unusual operations of the cryptocurrency.

By becoming an account holder and/or using Baola services, the user expressly acknowledges, accepts, assumes the following risks and agrees that Baola shall not be responsible for any losses or damages, whether direct or indirect, resulting from the update, whether in whole or in part, of any of the risk events described above.

Stablecoin General Explanation

Since currently Baola supports only transactions in stablecoin, in particular in USDT stablecoin issued by Tether, and USDC stablecoin issued by Circle, the present document provides an overview of its key characteristics, interchangeability with other digital assets, price history, and trading volume to the User for the information purpose only.

USDT and USDC are a type of cryptocurrency known as a stablecoin, designed to maintain a value equal to the U.S. dollar. Each stablecoin token aims to stay at a 1:1 ratio with the U.S. dollar, providing stability in the often volatile cryptocurrency market.

Key Characteristics of Stablecoins:

● USDT and USDC values are pegged to the U.S. dollar, offering minimal price volatility compared to other cryptocurrencies.
● Tether claims that all USDT tokens are backed by reserves, including traditional currency and cash equivalents.
● USDC is backed by U.S. dollar assets held in segregated accounts with regulated U.S. financial institutions. Circle, the issuer of USDC, maintains the 1:1 peg by holding an equivalent amount of cash or cash equivalents for every USDC in circulation. These reserves are regularly attested by accounting firms to ensure transparency.
● USDT and USDC operates on multiple blockchain platforms, enhancing its interoperability within the crypto ecosystem.
● USDT and USDC is widely accepted across various cryptocurrency exchanges and platforms, allowing for seamless trading and conversion into other digital assets. Its stability makes it a preferred medium for transferring value between different cryptocurrencies without exposure to significant price fluctuations.
● USDC is known for its regulatory compliance and transparency, with regular attestations of its reserves.

Current Price:

The current price of USDT and USDC is subject to minor fluctuations and may vary based on market conditions. However, due to the nature of stablecoins, it remains pegged to USD. Users should refer to reliable sources, such as recognized cryptocurrency exchanges (e.g., Binance, Coinbase) or financial platforms, to verify the latest exchange rate before proceeding with any transaction.

Stablecoin purchase/exchange rate is determined according to the Platform's exchange rate on the day the fiat funds are credited to Baola. Users must review the available exchange rate information before executing any transaction involving the exchange of ARS to USDT or USDC to ensure they are fully informed of the applicable conversion rate at the time of the transaction.

Price history over the last twelve months:

Over the past year, USDT and USDC has consistently maintained its peg to the U.S. dollar, with minor fluctuations typically within a narrow range around $1.00. This stability underscores its design as a stablecoin.

Current Volume of Operations:

USDT and USDC continue to exhibit high trading volumes across various exchanges, reflecting its significant role in the cryptocurrency market. For the most up-to-date trading volume, please refer to reputable financial platforms or cryptocurrency exchanges.

Note: The information provided here is based on data available as of January, 2025.

For the most current details regarding the transparency, operations volumes and current price please consult official Tether and Circle resources:

 ● Tether Tokens Transparency: https://tether.to/ru/transparency/?tab=usdt
 ● Circle Tokens Transparency: https://www.circle.com/transparency

Price Instability & Dependency

As of now, Baola supports crypto-transactions exclusively in stablecoins, such as USDT and USDC. While such stablecoins are designed to remain pegged in value to the US Dollar, and backed by US Dollar reserves, stablecoin does not control the issuance, redemption or backing of USDT and USDC and cannot guarantee that 1 USDT will always remain redeemable for 1 U.S. Dollar. There is a risk these stablecoins might be depegged from the US Dollar.

Counterparty Risks

Holding stablecoins involves dependency on the issuer, Tether or Circle. The value of Stablecoins may depend on the solvency or credibility of the issuer of a Stablecoin. USDT is issued by Tether, while USDC is issued by Circle. These stablecoins are backed and redeemable 1:1 for US dollars. Baola does not issue or redeem USDT / USDC and does not hold fiat currency reserves. Accordingly, dealing or holding Stablecoins like USDT or USDC involves counterparty risk in the issuer of the Stablecoin.

Volatility and FX Risk

FX risks arise during $ARS to USDT/USDC transactions, due to fluctuations in exchange rates. You may experience unexpected changes in account balances during volatile market conditions. It is common for prices to increase or decrease significantly and abruptly, in a single day. While this could result in profits, it could also result in substantial losses. You should carefully consider this and take into account $ARS to stablecoin exchange rate before executing actual exchange.
It should be noted that Virtual Asset transactions are considered executed only when they are recorded and confirmed by the Baola platform, which does not necessarily coincide with the moment the client initiates the transaction.

Dependency on Service Providers

Baola relies on third-party providers, including Fireblocks for services related to virtual assets custody software and infrastructure provision. Insolvency, service failures, or cyberattacks on providers could impact funds and operations.

Blockchain Technology & Security Risks

Baola’s services depend on blockchain networks, which are vulnerable to bugs, forks, attacks, and cryptographic advancements. These risks could result in service disruptions, delayed transactions.

Since the Services are based on the Blockchain, any malfunction, breakdown, or abandonment of any Blockchain can have a material adverse effect on the Services. Additionally, advances in cryptography, or technical components may present risks to the Services, making cryptographic consensus or other technological elements supporting the blockchain and digital assets ineffective.

In addition, Baola warns regarding the potential risks associated with cybersecurity threats, platform downtime, and cloud technology vulnerabilities. These risks include hacking, phishing, unauthorized transactions, data breaches, and system outages.

Regulatory and Compliance Risks

Baola operates in a complex and constantly evolving regulatory landscape. Regulatory changes or the emergence of new requirements could impact Baola's ability to operate in specific jurisdictions. If due to regulatory actions or changes to the law or regulations, it becomes illegal to operate in that jurisdiction, or it is not commercially desirable to obtain the necessary regulatory approval(s) to operate in that jurisdiction. This may result in your termination of relations with Baola and losing access to the account and may also result in the loss of any Digital Assets stored or held in the Account.

Blockchain technology enables new forms of interaction and it is possible that certain jurisdictions may apply existing regulations or introduce new regulations on blockchain technology-based applications, and that such regulations may result in substantial modifications to the Services, including their termination.

Virtual Assets are not covered under Law No. 26,831, except when they fall within the definition of marketable securities as provided in Article 2 of Law No. 26,831, nor are they included within the powers granted to the National Securities Commission (CNV) under Law No. 27,739. Therefore, the offering documents or product information provided by the issuer have not been reviewed or approved by the Commission or, if applicable, by any regulatory authority.

Fraud and Security risks

Fraud and security risks include unauthorized access to accounts, identity theft, and misuse of customer funds.

Unauthorized access by third parties to the customers login credentials to their account, including unauthorized access due to lack of care or forgetfulness by the account holder, or by the third party gaining control over another device or account used by the User in connection with any authorized enhanced security measures for the User’s Account.

Third parties may steal Users identification documents and use them to open or interact with accounts fraudulently, leading to unauthorized transactions or account creation. To mitigate these risks, Users should safeguard their identification documents, avoid sharing passwords, and secure the devices used to access Baola services.

Tax Risks

Trading, holding, or earning returns on virtual assets and cryptocurrencies may have unique tax implications. It is essential to consult with a tax advisor to understand your obligations when using our services. We strongly recommend seeking independent tax advice before purchasing digital assets, engaging in cryptocurrency transactions, or earning returns.