Risk Disclosure
A comprehensive disclosure of risk factors applicable to HGA token ownership and the Helios Digital gold reserve system.
IMPORTANT: This document is provided for informational purposes only and does not constitute investment advice, financial advice, or a recommendation to purchase HGA tokens. Prospective holders should consult qualified legal, financial, and tax advisors before making any allocation decision. Past performance of gold or digital assets does not guarantee future results.
Market Risk
Gold Price Volatility
The value of HGA tokens is directly correlated with the XAU/USD spot price. Gold prices can fluctuate significantly due to macroeconomic conditions, central bank policy, geopolitical events, and market sentiment. HGA does not protect holders from gold price declines.
Spot Price Basis Risk
Differences between the London Fix price, real-time spot price, and the price at which redemption is executed may result in value discrepancies, particularly during periods of high volatility.
Currency Risk
Gold is priced in USD. Holders whose base currency is not USD bear foreign exchange risk.
Custody & Physical Risk
Vault Operator Risk
While physical gold is held at LBMA-accredited facilities with SOC 2 Type II certification, the security and operational integrity of the vault is ultimately the responsibility of the vault operator. Helios mitigates this through insurance, multi-party authorization, and quarterly physical audits.
Insurance Limitation
Insurance policies cover specified perils (theft, fire, natural disaster, transit loss). Certain catastrophic or extraordinary events may not be fully covered. Policy limits are reviewed quarterly.
Physical Delivery Risk
Physical gold redemption requires insured international shipping. Transit carries residual risk despite insurance coverage. Delivery timelines may vary based on jurisdiction and logistics conditions.
Technology Risk
Smart Contract Risk
HGA tokens are issued on the XRP Ledger using native trustline functionality, not custom smart contracts. This reduces but does not eliminate technology risk. XRPL protocol-level bugs or consensus failures could affect token operations.
Oracle & Data Feed Risk
PoR attestation depends on accurate off-chain data feeds from the vault operator. If custody data is inaccurate, delayed, or compromised, the PoR attestation may not reflect the true reserve state.
Key Management Risk
The security of Helios issuing wallets, freeze authority keys, and board multisig keys is critical. Key compromise could result in unauthorized minting, freezing, or token transfers.
Regulatory Risk
Classification Risk
The regulatory classification of gold-backed tokens varies by jurisdiction. HGA may be classified as a commodity, commodity-backed token, digital asset, or security depending on the regulatory framework of the holder's jurisdiction.
Compliance Landscape
Digital asset regulations are evolving globally. Changes in KYC/AML requirements, securities laws, commodity regulations, or sanctions regimes may affect Helios operations, token transferability, or holder eligibility.
Jurisdictional Restrictions
HGA tokens may not be available or redeemable in all jurisdictions. Holders are responsible for compliance with their local laws regarding digital asset ownership and gold custody.
Liquidity Risk
Secondary Market Liquidity
While HGA is redeemable for gold/USDC, secondary market liquidity depends on market conditions, exchange listings, and trading volume. There is no guarantee of continuous liquid markets.
Redemption Queue Risk
In periods of high redemption demand, physical gold delivery may be delayed due to logistics, vault processing capacity, or insurance verification requirements.
Counterparty Risk
Vault Operator Solvency
If the vault operator faces insolvency, the segregated custody structure ensures that Helios-held gold is not part of the operator's bankruptcy estate. This is a legal segregation, not merely operational.
Auditor Independence
Helios engages independent auditors for PoR attestation and SOC 2 audits. While auditors are selected for independence, they may face conflicts or limitations.
Issuer Risk
Helios Digital's operational continuity affects token services. Board governance includes succession planning and key-person risk mitigation. Tokens remain redeemable under the custody trust structure even if Helios ceases operations.
No Guarantee of Returns
HGA tokens are backed by physical gold but are not a deposit, not insured by any government deposit insurance scheme, and not guaranteed to appreciate in value. The value of HGA tokens will fluctuate with gold prices. Helios Digital does not guarantee any specific return, income, or yield from holding HGA tokens.