Risk disclosure

Digital assets and onchain activity

The risks of digital-asset investing and onchain activity, and how digital assets are custodied, controlled and safeguarded.

This page is the published version of this disclosure. It is the copy referenced by your Client Advisory Agreement, and it can be read here at any time without an emailed attachment.

Digital Assets & Onchain Activity Risk Disclosure

Risks of digital assets, crypto assets, DeFi, staking, lending, and onchain activity.

Effective July 8, 2026

This disclosure applies where a client relationship with Protocol Wealth involves digital assets in any capacity, including discretionary management, non-discretionary advice, financial planning, custody planning, treasury advisory, reporting, or education.

Digital assets are highly speculative and involve a significant risk of loss, including the possible loss of the entire investment. They may be suitable only for clients with appropriate experience, risk tolerance, liquidity, time horizon, and financial capacity.

Key Risks

Extreme volatility. Digital-asset prices can change rapidly and unpredictably.
Liquidity risk. Markets may be thin, fragmented, unavailable, or impaired during stress.
Regulatory risk. Laws, regulations, enforcement positions, tax treatment, and platform availability may change quickly.
Cybersecurity risk. Digital assets are common targets for theft, phishing, malware, social engineering, and operational compromise.
Private-key and credential risk. Loss or compromise of keys, devices, seed phrases, recovery materials, or approval credentials may cause permanent loss.
Smart-contract and protocol risk. DeFi protocols, bridges, oracles, staking systems, vaults, and liquidity pools may have code flaws, economic exploits, governance attacks, or design failures.
Counterparty and platform risk. Exchanges, custodians, brokers, staking providers, validators, OTC desks, and other platforms may fail operationally or financially.
Irreversibility. Blockchain transactions generally cannot be reversed once confirmed.
Network risk. Congestion, high fees, chain halts, reorganizations, forks, validator failures, and outages may delay or impair activity.
Tax complexity. Digital-asset transactions may create tax events. Clients are responsible for tax compliance and should consult tax advisers.
Valuation risk. Digital-asset prices may vary by venue and data source and may be unavailable during outages.
Airdrop, fork, and protocol-event risk. Resulting assets may be unsupported, unsafe, unavailable, taxable, or worthless.

Onchain Activities

Onchain activities may include staking, delegated staking, re-staking, lending, borrowing, liquidity provision, protocol interaction, governance, bridging, or other DeFi activity. These activities may involve slashing penalties, impermanent loss, contract failure, oracle failure, governance attack, insolvency, exploit, or loss of rewards and principal.

Protocol Wealth will evaluate material risks it identifies, but it cannot eliminate digital-asset or onchain risks.

Custody and Wallets

Digital assets may be held with qualified custodians, institutional wallet providers, client-controlled wallets, or smart contracts. Not all structures provide the same legal, regulatory, insurance, segregation, recovery, or investor-protection treatment. Assets outside a qualified custodian may not receive qualified-custody protections, SIPC protection, FDIC insurance, or ordinary securities-account protections.

No Guarantee

Targets, forecasts, yield rates, staking rewards, fee estimates, benchmark comparisons, and forward-looking statements are based on assumptions and are not guarantees. Participation in digital assets or onchain activity may result in loss of principal and rewards.

Protocol Wealth, LLC is a registered investment adviser (CRD #335298). Registration does not imply a certain level of skill or training. Investing involves risk, including possible loss of principal; past performance does not guarantee future results. This document is provided for informational purposes and is incorporated by reference into your Client Advisory Agreement.

Custody, Account Control & Digital-Asset Safekeeping

How client assets, qualified custodians, wallets, and account-control responsibilities are framed.

Effective August 24, 2026

This disclosure supplements the Client Advisory Agreement, Form ADV Part 2A, and any digital-asset or institutional schedule. It summarizes custody and safekeeping concepts for traditional assets and digital assets.

Traditional Assets

Traditional securities and cash are generally held at a qualified independent custodian in an account titled in the client's name or in the name of a trust, entity, retirement account, or other fiduciary arrangement designated by the client. The custodian is responsible for safekeeping, settlement, trade confirmations, official statements, and tax forms.

Protocol Wealth may have discretionary trading authority and fee-deduction authority if granted by the client. Fee-deduction authority creates limited custody under applicable adviser rules. Protocol Wealth is not a qualified custodian and does not hold client assets; direct fee deduction is the only circumstance in which Protocol Wealth is deemed to have custody. Protocol Wealth does not otherwise maintain possession or control of traditional client assets.

Digital Assets

Digital assets may be held or accessed through one or more structures, depending on the service elected and approved in writing:

A digital-asset qualified custodian, such as Anchorage Digital, BitGo, or another approved provider.
An institutional MPC wallet or policy-controlled wallet infrastructure, such as Fordefi or another approved provider.
A client-approved trading venue, OTC counterparty, protocol, smart contract, staking arrangement, lending arrangement, liquidity pool, or other onchain activity.

Some digital-asset activities may require movement outside a qualified custodian or may involve assets that are not protected by the SEC custody rule, SIPC, FDIC insurance, or ordinary securities-custody protections. Risks may include insolvency, hacking, smart-contract failure, fraud, settlement failure, operational error, validator/slashing risk, bridge risk, chain halt, or permanent loss.

Client Control and Authorization

Clients retain beneficial ownership of their assets. Digital-asset transfers and wallet policies should use documented authorization workflows, whitelisted addresses, approval thresholds, velocity limits, and trusted communication channels where applicable.

Protocol Wealth does not ask clients for seed phrases or private keys. Clients are responsible for safeguarding personal devices, email accounts, wallet credentials, recovery materials, and authorized representative information.

Key Material and Disaster Recovery

Where digital assets are held in an institutional MPC or policy-controlled wallet such as Fordefi, the key material is split into shares held under a policy the client approves. No single party — including Protocol Wealth — holds a complete key, and Protocol Wealth never takes possession of a client's private keys or seed phrases.

That structure protects against a single key being stolen. It does not by itself protect against a client losing access to their own share. Recovery is the client's responsibility, and the client either retains their own recovery material or arranges disaster key recovery with a specialist provider such as Coincover. Where a client engages such a provider, that arrangement is between the client and the provider; Protocol Wealth is not a party to it, does not hold the recovery material, and cannot restore access on the client's behalf.

A client who neither retains recovery material nor arranges third-party recovery should understand that loss of their key share may result in permanent, unrecoverable loss of the assets.

Official Records

Custodian statements, qualified-custodian statements, platform records, wallet transaction histories, blockchain records, and other provider records are the official or primary records for their respective assets. Protocol Wealth reports are supplemental and should be reviewed alongside those records.

Succession and Estate Access

Digital assets can become inaccessible if credentials, authorization paths, recovery materials, or fiduciary instructions are incomplete or unavailable. Clients are responsible for maintaining estate, succession, and access plans with qualified legal advisers and approved custodians or wallet providers.

Every Protocol Wealth disclosure, with its version history, is listed at protocolwealthllc.com/disclosures.