Eloncity - RISK FACTORS (white paper )

karramov(38)

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I would like to share with you an important point in the white paper of the company Eloncty. Since any serious investor is obliged to know and understand them. Below will be provided all the factors and risks necessary for understanding when participating in ICO.

Risks Associated with the related Blockchain
Because ECT, the Eloncity Protocol (ECTP), and the Eloncity Network are based on blockchain technology, any
malfunction, breakdown or abandonment of the relevant blockchain may have a material adverse effect on
the Eloncity Network, the ECTP or ECT. Moreover, advances in cryptography, or technical advances such as
the development of quantum computing, could present risks to ECT, the ECTP, and the Eloncity Network by
rendering ineffective the cryptographic consensus mechanism that underpins the relevant blockchain.
Risk of Losing Access to ECT Due to Loss of Private Key(s)
A private key, or a combination of private keys, is necessary to control and dispose of ECT stored in your digital
wallet, vault or other storage mechanisms. Accordingly, loss of requisite private key(s) associated with your
digital wallet, vault or other storage mechanism storing ECT may result in loss of such ECT. Moreover, any third
party that gains access to such private key(s), including by gaining access to login credentials of a hosted wallet
service you use, may be able to misappropriate your ECT. We cannot be responsible for any such losses.
Risk of Hacking and Security Weaknesses
Hackers or other malicious groups or organizations may attempt to interfere with the Eloncity Network or ECT
in a variety of ways, including, but not limited to, malware attacks, denial of service attacks, consensus-based
attacks, Sybil attacks, smurfing and spoofing. Furthermore, ECT will be “ERC-20” tokens on Ethereum and
Ethereum rests on open-source software and is an unlicensed distributed ledger, and there is a risk that a third
party or a member of the Foundation may intentionally or unintentionally introduce weaknesses into the core
infrastructure of the Eloncity Network, which could negatively affect the Eloncity Network and ECT.
Risk of Uninsured Losses
Unlike bank accounts or accounts at some other financial institutions, ECT is uninsured unless you specifically
obtain private insurance to insure them. Thus, in the event of loss or loss of utility value, there is no public
insurer or private insurance arranged by us to provide recourse in any event. We are not obliged to compensate
or insure you for any event of loss or loss of utility value.
Risks Associated with Uncertain Regulations and Enforcement Actions
The regulatory status of ECT and distributed ledger technology is unclear or unsettled in many jurisdictions.
It is difficult to predict how or whether regulatory agencies may apply existing regulation with respect to
such technology and its applications, including the Eloncity Network and ECT. It is likewise difficult to predict
how or whether legislatures or regulatory agencies may implement changes to law and regulation affecting
distributed ledger technology and its applications, including the Eloncity Network and ECT. Regulatory actions
could negatively impact the Eloncity Network and ECT in various ways, including, for purposes of illustration
only, through a determination that ECT is a regulated financial instrument that requires registration or licensing.
Additionally, it is difficult to predict how the energy market may develop. The law and regulation in a jurisdiction
are subject to change, which will have an impact on whether the energy market is rendered a deregulated one
or a fully regulated one.
The Foundation may, therefore, cease operations in a jurisdiction in the event that regulatory actions, or changes
to law or regulation, make it illegal to operate in such jurisdiction, or commercially undesirable to obtain the
necessary regulatory approval(s) to operate in such jurisdiction.
Risks Arising from Taxation
The tax characterization of ECT is uncertain. You must seek your own tax advice in connection with purchasing,
holding and utilizing ECT, which may result in adverse tax consequences to you, including, without limitation,
withholding taxes, transfer taxes, value added taxes, income taxes and similar taxes, levies, duties or other
charges and tax reporting requirements.
Risk of Alternative Networks / Competitors
It is possible that alternative networks could be established in an attempt to facilitate services that are similar
to the services, or alternative networks could be established that utilize the same or similar code and protocol
underlying ECT, the Eloncity Network. The Eloncity Network may compete with these alternative networks,
which could negatively impact the Eloncity Network and ECT.
Risk of Insufficient Interest in the Eloncity Network or Distributed Applications
It is possible that the Eloncity Network will not be used by a large number of individuals, companies and other
entities or that there will be limited public interest in the creation and development of distributed systems (such
as the Eloncity Network) more generally. Such lack of use or interest could negatively impact the development
of the Eloncity Network and therefore the potential utility of ECT.
Risks Associated with the Development and Maintenance of the Eloncity Network
The Eloncity Network is still under development and may undergo significant changes over time. Although it
is intended for ECT and the Eloncity Network to follow the specifications set forth in this document, and the
Foundation will endeavor to work towards those ends (subject to internal business considerations), changes
may be required to be made to the specifications of ECT or the Eloncity Network for any number of reasons.
This could create the risk that ECT or the Eloncity Network, as further developed and maintained, may not meet
your expectations at the time of purchase. Furthermore, despite our good faith efforts to develop and maintain
the Eloncity Network, it is still possible that the Eloncity Network will experience malfunctions or otherwise fail
to be adequately developed or maintained, which may negatively impact the Eloncity Network and ECT.
Risk of an Unfavorable Fluctuation of Currency Value
The Foundation intends to use the proceeds from selling ECT to fund the maintenance and development of the
THE ELONCITY MODEL 4 Eloncity Network. The proceeds of the sale of ECT will be mainly denominated in ETH and possibly other digital assets and may be converted into other cryptographic and fiat currencies. In addition, some contributions (as the case may be) of ECT may also be denominated in fiat currencies. If the value of digital assets fluctuates unfavorably during or after the contributions, the Foundation may not be able to fund development, or may not be able to maintain the Eloncity Network in the manner that is intended.
Risk of Dissolution of the Foundation
It is possible that, due to any number of reasons, including, but not limited to, an unfavorable fluctuation in the
value of cryptographic and fiat currencies, decrease in the utility of ECT due to negative adoption of the Eloncity
Network, the failure of commercial relationships, or intellectual property ownership challenges, the Eloncity
Network may no longer be viable to operate and the Foundation may be dissolved.
Risks Arising from Lack of Governance Rights
Because ECT confers no governance rights of any kind with respect to the Eloncity Network, the Foundation,
all decisions involving the Eloncity Network, or the Foundation will be made by the Foundation at its sole and
absolute discretion, including, but not limited to, decisions to discontinue the Eloncity Network, to create and
sell more ECT for use in the Eloncity Network, or to sell or liquidate the Foundation. These decisions could
adversely affect the Eloncity Network and ECT you hold.
Risks Involving Cloud Storage
As the Eloncity Network may provide a decentralized cloud storage service to individual and institutional clients,
including users and applications, the services are susceptible to a number of risks related to the storage of data
in the cloud. The services may involve the storage of large amounts of sensitive and/or proprietary information,
which may be compromised in the event of a cyber-attack or other malicious activity.
Similarly, the services may be interrupted, and files may become temporarily unavailable in the event of such
an attack or malicious activity. Because users can use a variety of hardware and software that may interface
with the Eloncity Network, there is the risk that the services may become unavailable or interrupted based on a
failure of interoperability or an inability to integrate these third-party systems and devices that the Foundation
does not control. The risk that the services may face increasing interruptions and the Eloncity Network may face
additional security vulnerabilities could adversely affect the Eloncity Network and therefore the future utility
of any ECT that you hold.
Risks Associated with Markets for ECT
There is no prior market for ECT and the ECT token distribution may not result in an active or liquid market for ECT.
ECT is designed to be used solely within the Eloncity Network, hence there may be illiquidity risk with respect to
the ECT you hold. ECT is not a currency issued by any central bank or national, supranational or quasi-national
organization, nor does any hard assets or other credit back it nor is it a “commodity” in the usual and traditional
sense of that word. We are not responsible for the circulation and exchange of ECT on any market. Exchange
of ECT will merely depend on the consensus on its value between the relevant market participants. No one is
obliged to purchase any ECT from any holder of ECT, including the purchasers, nor does anyone guarantee the
liquidity or market price of ECT to any extent at any time. Furthermore, ECT may not be resolved to a purchaser
who is a citizen, national, resident (tax or otherwise), domiciliary or green card holder of a Restricted Country or
to purchasers where the purchase of ECT may be in violation of applicable laws. Accordingly, we cannot ensure
that there will be any demand or market for ECT, or that the price you pay for ECT is indicative of any market
valuation or market price for ECT