Risk Disclosure

RISK DISCLOSURE POLICY - Last updated: 07/10/2026

Trek Labs Europe Ltd. dba Backpack EU

RISK WARNING: Derivative financial instruments are high-risk investments. You may lose all the value you invest. Do not invest money you cannot afford to lose.

1. Introduction and scope

This Risk Disclosure Policy applies to products and services made available through Backpack EU by Trek Labs Europe Ltd. It is intended to provide a general description of significant risks associated with using Backpack EU services, including derivative financial instruments and perpetual futures. It does not describe every risk, and other risks may arise or become material in the future.

This Risk Disclosure Policy is provided in accordance with Article 25 of the Investment Services and Activities and Regulated Markets Law 87(I)/2017 (Cyprus), and applicable CySEC and ESMA requirements and guidelines.

Backpack EU is a trading name used by Trek Labs Europe Ltd.

Trek Labs Europe Ltd, a company incorporated in Cyprus with registration number HE 335683 and authorised and regulated by the Cyprus Securities and Exchange Commission under licence number 273/15, with registered address at Aiolou & Panagioti Diomidous 9, Katholiki, 3020 Limassol, Cyprus.

References in this Risk Disclosure Policy to “Backpack”, “Backpack EU”, “we”, “us”, “our” or the “Company” mean Trek Labs Europe Ltd.

This Risk Disclosure Policy forms part of your agreement with Trek Labs Europe Ltd. By applying for, opening or maintaining an account, or by using a Backpack EU product or service, you acknowledge that you have read and understood this Risk Disclosure Policy and the other legal documentation applicable to the product or service you use.

You should not use any Backpack EU product or service unless you understand the nature of the product or service, the extent of your exposure to risk, and the potential for loss. The risks described in this Risk Disclosure Policy may result in loss of value or funds, inability to access your account, inability to trade or manage your positions, liquidation of positions and other financial losses. You should seek independent financial, legal, regulatory or tax advice where appropriate.

The availability of any product or service may depend on your jurisdiction, client category, onboarding status, knowledge and experience, financial circumstances, product permissions, regulatory restrictions, sanctions screening and our internal risk controls.

2. Important general warnings

No guarantee of value or return. We do not guarantee the value or performance of any derivative, position, portfolio or account. You may lose some or all of the value you invest.
Derivative products are high risk and complex. Crypto-asset derivatives, perpetual futures and other financial instruments may involve leverage, margin, liquidation and rapid loss. They are not appropriate for all clients.
You are responsible for your decisions. Except where we expressly agree otherwise, we do not provide investment, legal, regulatory, accounting or tax advice. Information we provide is not a personal recommendation.
Past performance is not a guide to future performance. Historical prices, charts, funding rates, volume, liquidity, spreads, volatility or returns do not indicate future outcomes.
Displayed prices, index prices, mark prices and valuations may differ from executable prices. Prices, portfolio values, account values, collateral values, fiat-equivalent values, index prices, mark prices, fair values or other reference prices displayed on the platform may be estimates or methodology-based values. They may differ from the price at which you can actually buy, sell, liquidate or close a position. They may also differ from prices available on other venues or data sources.
Availability and execution are not guaranteed. Orders, trades, deposits, withdrawals, transfers or other instructions may be delayed, rejected, cancelled, partially filled, suspended or unavailable.
You should only use funds and assets that you can afford to lose. Do not trade using emergency funds, borrowed money, retirement savings, mortgage funds, education funds, medical funds or funds required for ordinary living expenses.

3. No advice; client responsibility

Backpack EU may make available market data, trading tools, educational information, product information, risk warnings, research-like material, notifications, alerts, account information, API functionality or other content. Unless expressly stated in a separate written agreement, this information is provided on a general basis and does not constitute investment advice, a personal recommendation, legal advice, tax advice, accounting advice or an invitation to enter into a transaction.

Where required by applicable law, we carry out an appropriateness assessment before providing certain products or services to you. Subject to those obligations, you are responsible for assessing whether a product or service is appropriate for you, taking into account your objectives, experience, knowledge, financial resources, risk tolerance, jurisdiction, tax position and ability to bear losses. You are also responsible for monitoring your account, open orders, open positions, balances, displayed prices, index prices, mark prices, valuation estimates, collateral values, collateral eligibility, margin requirements, liquidation risk, fees, tax obligations and communications from Backpack EU.

We may ask you to provide information about your knowledge, experience, financial circumstances or investment objectives. We may restrict, refuse or withdraw access to certain products or services where required by law, product governance, client categorisation, appropriateness assessments, risk controls or our internal policies.

4. General risks applicable to all Backpack EU services

4.1 Market, price and volatility risk

Derivative markets can be volatile and unpredictable. Prices may move sharply within seconds or minutes and may be affected by movements in the underlying asset, supply and demand, market sentiment, liquidity, macroeconomic events, interest rates, regulatory developments, market outages, market manipulation, news, rumours or other factors outside our control.

Price movements may result in substantial losses. In fast markets, the price shown on the platform may no longer be available when your order is submitted, received, routed, matched or executed. Your order may execute at a worse price than expected, may only partially execute, or may not execute at all.

Different prices may be displayed or used for different purposes. For example, Backpack EU may display or use last traded prices, bid prices, ask prices, mid prices, index prices, mark prices, oracle prices, reference prices, fair-value prices, conversion prices or other valuation prices. These prices may be calculated using different methodologies and may not be the same as the price available for immediate execution, collateral valuation, liquidation or risk-management purposes.

4.2 Liquidity risk

Liquidity means the ability to buy, sell or close a position promptly at a reasonable price. Liquidity may be limited or disappear without warning. Low liquidity may lead to wide spreads, slippage, partial fills, rejected orders, delays, forced position reductions, inability to exit a position, or large price movements from relatively small orders.

4.3 Currency, conversion and foreign exchange risk

Where your account, collateral, transactions or underlying exposures involve a currency or asset different from your reference currency, you may be exposed to exchange-rate and conversion risk. Conversion costs, spreads or third-party fees may reduce your returns or increase your losses.

4.4 Operational, technology and cybersecurity risk

Backpack EU services depend on websites, mobile applications, APIs, trading and execution systems, third-party vendors, cloud providers, connectivity, execution venues, market data providers and other technology and infrastructure providers. These systems may fail, degrade, be unavailable, produce incorrect data, be subject to latency, be interrupted by maintenance, or be affected by cyber-attacks, malicious code, bugs, exploits, distributed denial-of-service attacks, phishing, credential theft, social engineering, insider misconduct or other events.

Operational or technology incidents may prevent you from accessing your account, viewing accurate information, submitting or cancelling orders, satisfying margin requirements, managing positions or managing risk. We may suspend, restrict or delay services, orders, trading, deposits, withdrawals, transfers or other actions where necessary to protect clients, comply with law, manage risk, resolve incidents or maintain market integrity.

4.5 Account security, unauthorised access and fraud

You are responsible for maintaining the security of your account credentials, devices, email account, authentication methods, API keys and other access tools. If your account, device, email, API key or authentication method is compromised, an unauthorised person may be able to trade or otherwise misuse your account, assets or information.

You should use strong and unique passwords, enable multi-factor authentication, safeguard recovery codes, review authorised devices and API keys, verify domains and communications, keep devices secure, and protect yourself against phishing, malware, fake websites, fake support channels and social engineering.

You may be targeted by phishing websites, fake domains, fake social media accounts, impersonation of Backpack staff, fraudulent support channels, malware, remote-access scams, SIM-swap attacks, credential stuffing, brute-force attacks, leaked passwords, fake investment schemes or other social-engineering attacks. Bad actors may also use artificial intelligence tools, synthetic identities, deepfake video or audio, forged documents, automated account activity or other techniques to attempt to gain unauthorised access to accounts or to induce clients to take unauthorised actions or disclose sensitive information.

Backpack EU communicates only through its official channels: email at support@eu.backpack.exchange and/or info@eu.backpack.exchange via our website and apps, our official @eu.backpack.exchange email addresses and in-app notifications, and our verified official social accounts (listed on our website). We may contact you proactively by official email or in-app notification about your account, security or compliance, but we will never message you first through a personal direct message on Telegram, WhatsApp, Discord, or similar platforms, never solicit funds or investments, and never ask for your password, 2FA codes or recovery phrase on any channel. Treat any contact outside this, especially personal DMs, unofficial groups, or unverified accounts claiming to be Backpack EU, as potentially fraudulent.

4.6 Legal, regulatory, sanctions, AML and tax risk

Derivative markets and the underlying assets to which derivative products relate are subject to evolving laws, regulations, supervisory expectations, product restrictions, tax rules, sanctions regimes and enforcement practices. Changes in law or regulatory approach may affect the availability, legality, pricing, taxation, settlement, custody or value of products and services. We may be required to suspend, restrict, terminate, modify, delist or refuse services, products, orders or accounts.

We screen clients and transactions in accordance with applicable sanctions, anti-money laundering, counter-terrorist financing, fraud-prevention and other compliance obligations. If you, a transaction, jurisdiction or source of funds is identified as presenting legal, sanctions, AML, fraud or other compliance risk, we may reject, delay, freeze, suspend, restrict, cancel or report the transaction or account, subject to applicable law. You are responsible for ensuring that your use of Backpack EU complies with laws and restrictions that apply to you.

You are responsible for understanding and complying with the laws and tax rules that apply to you. Your transactions may create tax liabilities or reporting obligations. Tax treatment may change and may differ depending on your jurisdiction, residence, status, activities and personal circumstances.

4.7 Third-party dependency risk

Our services depend on third parties, including execution venues, technology and infrastructure providers, market data providers, custody or collateral service providers and other service providers. We do not control all third-party systems or actions. Third-party failures, insolvency, errors, outages, restrictions or security incidents may affect trading, execution, pricing, custody or collateral arrangements, deposits, withdrawals, transfers or account access.

4.8 Fees, costs and charges

Fees, spreads, funding amounts, commissions, financing charges, liquidation fees or other costs may apply. Costs may materially affect profitability and may exceed the amount you expected. Fees and costs may change in accordance with the applicable terms, fee schedule, product specifications or platform notices.

4.9 Conflicts of interest

Potential conflicts of interest may arise between you and Backpack EU, between Backpack EU and other clients, between clients, or in connection with third-party arrangements. For example, conflicts may arise from pricing, order execution, execution venue arrangements, affiliates, fees, listing decisions, risk controls, business relationships or operational decisions. We maintain policies and controls designed to identify, prevent, manage and disclose conflicts as required by applicable law, but conflicts may not always be eliminated.

4.10 Data protection and privacy risk

Backpack EU collects, processes and stores personal data in connection with providing products and services. This data may be subject to security incidents, unauthorised access or loss. You are responsible for ensuring that the personal data you provide to us is accurate, complete and current. For further information on how we handle your personal data, please see our Privacy Policy[1] .

5. Crypto-asset derivatives and perpetual futures - Trek Labs Europe Ltd[2] [3]

This section applies to derivative financial instruments, including perpetual futures, offered by Trek Labs Europe Ltd. Perpetual futures are derivative contracts without an expiry date which may remain open provided that required margin is maintained. The underlying assets currently include crypto-assets. These products are complex, high-risk products and may involve leverage, margin, liquidation, funding, index pricing, mark prices and other features that can amplify gains and losses. They are not appropriate for all clients.

5.1 No ownership of underlying assets

A derivative or perpetual futures contract does not give you ownership of the underlying asset unless the relevant product terms expressly provide otherwise. Your rights and obligations are determined by the derivative contract, the applicable terms, margin rules, settlement rules and product specifications.

5.2 Leverage, margin and liquidation risk

Leverage allows you to gain exposure that is larger than the amount of margin you provide. Leverage magnifies both gains and losses. Small movements in the price of the underlying asset, index or mark price may lead to large movements in the value of your position. You may lose your entire margin or invested capital rapidly.

You must maintain sufficient margin to support open positions. If your margin falls below required levels, your positions may be reduced, closed, liquidated or otherwise managed automatically, with or without prior notice, in accordance with the applicable terms and product rules. Liquidation may occur at unfavourable prices and may not prevent further loss where markets move rapidly or liquidity is insufficient.

If you do not have enough time to monitor your investment on a regular basis, you should not trade derivatives or other complex financial instruments. These products are not suitable for 'buy and hold' trading. They can require constant monitoring over a short period of time.

Even maintaining your investment overnight exposes you to greater risk and additional costs. The volatility of the market together with the extra leverage on your investment can result in rapid changes to your overall investment position. Immediate action may be required to manage your risk exposure or to post additional margin.

Unless applicable law or product terms limit your liability, you may be liable for losses, costs or deficits arising from your positions. Retail clients may have specific protections under applicable law for certain products, including leverage limits imposed by CySEC and negative balance protection, where the aggregate liability in your account is limited to the total value of funds and assets available in your account. The scope and application of any such protection, including the maximum leverage ratios available to retail clients, should be read together with the relevant terms, disclosures and product specifications.

5.3 Volatility, gapping and market disruption

Crypto-asset derivative markets may be highly volatile and may gap, meaning that prices move from one level to another without trades being available at intermediate prices. Gapping can occur outside normal market expectations, during news events, during exchange outages, during underlying market disruptions, when liquidity is low, or when large orders enter the market. Stop-loss, take-profit, limit or conditional orders may not execute at the intended price.

5.4 Funding rates and ongoing costs

Perpetual futures may involve funding payments, funding rates, fees, commissions, spreads, financing charges, liquidation fees or other amounts. Funding rates may be positive or negative and may change over time. Costs can materially affect your profit and loss, especially for positions held over time or during volatile markets.

5.5 Index, mark price and pricing methodology risk

Derivative products may use an index price, mark price, oracle, reference price, fair price, funding calculation or other methodology. These methodologies may differ from last traded prices or from prices available on other venues. Index constituents, data sources, weighting, outages, stale data, erroneous data, disruptions, manipulative activity or methodology changes may affect margin, liquidation, settlement and profit and loss.

Where a crypto-asset or other asset is used as collateral for a derivative, perpetual future or other collateralised product, the value attributed to that collateral may depend on an index price, mark price, collateral factor, haircut, eligibility rule, concentration limit, conversion rate or other valuation methodology. A change in the price, methodology, data source, haircut, collateral factor or eligibility of a collateral asset may reduce your available collateral or margin and may increase the risk of liquidation, forced reduction, transfer restriction or other risk-management action.

5.6 Order, execution and platform risk

Orders in derivative products may be subject to latency, rejection, partial execution, cancellation, order book depth, risk limits, price collars, margin checks, maintenance, exchange controls, outages, API issues, market disruption, throttling, liquidation processes or other execution constraints. The platform may not always be available, and displayed information may be delayed, incomplete or inaccurate during incidents or fast markets.

5.7 One Click Order

The trading platform uses “One Click” functionality, which allows an order to be submitted immediately when the relevant trading button is selected. You will therefore have no opportunity to review the order after submission. The order will be a market order without the ability to be cancelled or modified.

By using One Click trading, you accept the risks associated with immediate order submission.

5.8 Short positions and unlimited or substantial loss risk

Short positions may create losses when the price of the underlying asset or reference price rises. Depending on the product, leverage, margin rules and applicable protections, losses on short positions may be substantial and may occur rapidly. You should understand the maximum loss exposure and margin mechanics before opening any position.

5.9 Counterparty, credit and settlement risk

Derivative products may expose you to counterparty, credit, settlement, default, insolvency, insurance fund, auto-deleveraging (ADL), socialised loss or close-out risks. Auto-deleveraging means that your profitable positions may be automatically reduced in size to cover losses of counterparties or the trading venue, without prior notice. If a counterparty, venue, data source, affiliate, clearing or settlement arrangement, or other relevant party fails to perform, you may suffer loss or delay.

5.10 Product intervention, restrictions and client categorisation

Access to derivative products may depend on your client categorisation, jurisdiction, knowledge, experience, financial circumstances, appropriateness assessment, product governance restrictions, leverage limits, regulatory restrictions, product-intervention measures, sanctions screening and our internal risk controls. We may refuse, withdraw, limit or change access to products where required or permitted by applicable law and the applicable terms.

5.11 Compensation and complaint arrangements

The Cyprus Investor Compensation Fund and Cyprus Financial Ombudsman arrangements may apply depending on the relevant investment service, financial instrument and client category. You should review the applicable Complaints Policy, Investor Compensation Fund Notice and Terms for further information.

6. Sustainability risk

Environmental, social and governance ("ESG") events or developments may affect the value, performance or liquidity of crypto-asset derivatives, including perpetual futures. Such events may result in increased volatility or financial losses.

The services described in this Risk Disclosure are provided on an execution-only basis. We do not provide investment advice or make investment recommendations based on sustainability factors. You are responsible for considering whether sustainability risks are relevant to your own investment decisions.

7. Platform, account and API functionality

Displayed information including prices, balances, account values, collateral values and margin indicators may be delayed, inaccurate, unavailable or interrupted; you should not rely solely on any platform display to manage your risk.

You are responsible for ensuring that you understand the functionality of the trading platform, including the methods for placing, modifying and cancelling orders, before engaging in trading. You are responsible for all orders submitted through your account and should ensure that you are familiar with the platform's features and functionality prior to trading. You should also familiarise yourself with the specific trading characteristics of each product including order types, margin requirements and any restrictions applicable to the relevant product.

API trading, automated strategies, bots, third-party software or programmatic access may create additional risks, including coding errors, runaway trading, duplicate orders, credential leakage, latency, rate limits, failed cancellations, unintended leverage, unexpected position changes, or unauthorised access. You are responsible for all activity through your account and API keys unless applicable law provides otherwise.

8. Suspension, restrictions and force majeure

We may suspend, restrict, reject, cancel, delay or refuse services, accounts, orders, trading or products in accordance with applicable law and the applicable terms. Reasons may include market disruption, systems issues, cyber incidents, liquidity issues, sanctions or AML concerns, fraud suspicion, legal orders, regulatory requirements, risk controls, insolvency events, third-party provider failures or other circumstances outside our control.

During a suspension or restriction, you may be unable to open or close positions, execute trades, deposit, withdraw or transfer assets, add or move collateral, or otherwise access products or services. Prices may move significantly during any period of unavailability.

To the extent permitted by applicable law, Backpack EU is not responsible for losses, costs, expenses, damages or liabilities resulting from any inability, delay or failure to access or use the Backpack EU website, mobile application, APIs, trading platform, or other services where such inability, delay or failure results from events outside Backpack EU’s reasonable control. These events may include internet outages, telecommunications failures, network congestion, public electricity network failures, power interruptions, transmission blackouts, software failures, hardware failures, device failures, browser or operating-system issues, third-party provider failures, market-data failures, cloud-service failures, cyber-attacks, distributed denial-of-service attacks, regulatory restrictions, legal orders, force majeure events or other circumstances outside Backpack EU’s reasonable control.

Such events may result in delay or failure in submitting, receiving, routing, matching, executing, cancelling, confirming, settling or recording orders, transactions, collateral movements or other instructions. Nothing in this Risk Disclosure Policy excludes or limits any responsibility or liability that cannot be excluded or limited under applicable law, regulation or the applicable terms.

9. Client acknowledgements

By using Backpack EU products or services, you acknowledge and agree that:

you have read and understood this Risk Disclosure Policy and the applicable legal documentation;
you understand that crypto-asset derivatives, including perpetual futures, involve significant risk, including the risk of losing all or substantially all of your invested capital;
you understand that risks may include inability to access the website, mobile application, platform, API or your account, inability or delay in submitting, cancelling, modifying, confirming or settling orders or transactions, inability to trade, deposit, withdraw or transfer assets, add or move collateral or satisfy margin requirements, liquidation and other financial loss;
you are responsible for your trading, investment and account-security decisions, except where applicable law provides otherwise;
you will review applicable product specifications, fee schedules, terms, order execution information and other relevant materials before using a product or service;
you understand that displayed prices, index prices, mark prices, fair-value prices, fiat-equivalent values, account values, portfolio values, collateral values, collateral eligibility, collateral factors, haircuts and margin indicators may be estimates or methodology-based values, may differ from executable prices, and may change without prior notice in accordance with the applicable terms;
you will not use products or services unless you have sufficient knowledge, experience, financial resources and risk tolerance to do so;
you understand that we do not guarantee uninterrupted access to the website, mobile application, platform, API or your account, uninterrupted execution, liquidity, price availability, index price accuracy, mark price accuracy, valuation accuracy, collateral value, collateral eligibility, returns, tax outcomes or the value of any derivative;
you are responsible for maintaining appropriate internet connectivity, telecommunications access, device security, browser and operating-system compatibility, account security, authentication methods, backup arrangements and independent monitoring arrangements suitable for the products and services you use;
you will provide accurate and complete information when required for onboarding, source-of-funds, sanctions, AML, fraud-prevention or other compliance checks;
you will seek independent professional advice where appropriate; and
you represent that you are not subject to applicable sanctions, are not a designated person, and are not prohibited from using our products or services under applicable law, and you will notify us promptly if this changes.

10. Changes to this Risk Disclosure Policy

We may update this Risk Disclosure Policy from time to time to reflect changes in products, services, entities, legal requirements, technology, market conditions, risk controls or business operations. Where required by applicable law or the applicable terms, we will provide notice of material changes that affect your rights or the risks to which you are exposed. The latest version will be made available on the Backpack EU website. Your continued use of Backpack EU products or services after the effective date of an update constitutes acceptance of the updated Risk Disclosure Policy, subject to applicable law and the applicable terms.

11. Contact and related documents

This Risk Disclosure Policy should be read together with the applicable Backpack EU Terms, product specifications, fee schedules, Order Execution Policy and related execution materials, Key Information Document where applicable, Investor Compensation Fund Notice, Trek Labs Europe Ltd Complaints Policy, Privacy Policy and any other legal documentation applicable to the product or service you use.

If you have questions about this Risk Disclosure Policy or the risks of a product or service, you should contact Backpack EU through the support channels made available on the Backpack EU website. We cannot provide personal investment, legal or tax advice.

12. Summary risk warning

Crypto-asset derivatives, including perpetual futures, involve significant risk. Perpetual futures may be traded on margin, may involve leverage and may result in rapid losses, including the loss of your entire invested capital. Prices, index prices, mark prices, collateral values and other reference values may differ from executable prices and may change rapidly due to market conditions, liquidity, methodology, data-source, connectivity, third-party or operational issues. You may be unable to access Backpack EU services, submit or cancel orders, add collateral or manage risk during outages, disruptions or restrictions. You should not trade crypto-asset derivatives unless you understand the risks and can afford the potential loss. Backpack EU does not provide investment, legal or tax advice.

Risk Warning: Our products are traded on margin and carry a high level of risk and it is possible to lose all of your capital. You should consider whether you understand how Financial

Instruments work and whether you can afford to take the high risk of losing money. Please read carefully this Risk Disclosure document, together with the Client Agreement (“Terms of Service”) and Privacy Policy available on our website in the Legal Documents list.

Disclaimer: The content on our website does not constitute financial or investment advice. Be advised that past performance is not an indication of future performance. Any information provided by the Company either through a website or any other means, is of a general nature and does not take into consideration your personal circumstances, investment experience or financial situation.