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Mode: Risks and Protection

NOT FINANCIAL ADVICE


Don’t worry, we know how you feel about the small print, so we’ll try make this one quick. If you’re reading this, you’re likely about to take a big, exciting leap into owning Bitcoin. Whether you’re an old-timer or new to cryptocurrency, there are a few things we need to discuss before you head off on your journey.


At Mode, we take security seriously 🔒 We want to make sure you’ve got all the tools you need to experience a great Bitcoin journey, which is why we’re registered with the FCA (Financial Conduct Authority) and work relentlessly to offer transparent and up-to-date information and guidance for anyone considering using Mode or getting started with Bitcoin. The cryptocurrency space is ever-evolving, so as and when any regulatory or security policy changes we’ll be sure to update you right here.

It’s not you, it’s us 🙋

‍No really, it is. There are risks involved with buying cryptocurrencies like Bitcoin, and whenever anyone, anywhere is considering doing so, it’s up to the service you’re trusting to offer transparency about their platform.

Unless you’re a time-traveller from pre-2010, the chances are you’re at least a little familiar with the term ‘cryptocurrencies’, and you’ve possibly seen a warning or two about risks related to them. This is because cryptocurrencies - including Bitcoin - are considered digital assets, which means they aren’t regulated in the UK. As with most digital assets, Bitcoin isn’t a national currency, and therefore isn’t protected by any statutory bodies in the UK, so any funds added to your Mode account are not protected by the FSCS (Financial Services Compensation Scheme) or the FOS (Financial Ombudsman Service).

When something looks too good to be true, it often is. It’s always a good idea to do some digging when you’re thinking about using a firm to buy and hold your crypto. Each and every one will vary when it comes to being able to trust their policies, licences, and security approaches. Mode is listed on the LSE main market (LSE: MODE) and we are authorised, licensed and registered with the FCA under Greyfoxx and Fibermode respectively, trading as Mode. We are held to high standards of corporate governance and due diligence, which means you can always rely on our corporate integrity.

 

Buying Bitcoin with Mode 💰

We built Mode with one core mission in mind: to open up the crypto space and aim to build easier, safer access routes into the world of Bitcoin. 

While it may be our goal to try and build a frictionless future for Bitcoiners, Bitcoin is far from easy, and its complexities along with those of the frameworks on which it’s built should not be taken lightly. 

That being said, in the words of our Chief Commercial Officer Rita Liu, “you don’t need to know how electricity works to switch on your lights at home”, and while we want you to be armed with everything you need to know to have a safe journey into Bitcoin, we’re also set on taking on the tough bits so that you don’t have to. 

When adding funds to Mode, we work with Open Banking to ensure that any funds you add are processed securely via direct connection with your bank account. Once you purchase Bitcoin with any GBP you have in the app, your Bitcoin is then held in cold storage with leading crypto custodian, BitGo, and is insured up to US$100M*.

While we work hard to offer all the security and protection we can, as mentioned above, Bitcoin is unregulated and any capital you spend on Bitcoin is at risk.

 

Earning Bitcoin with Mode 💸

When it comes to owning Bitcoin, you don’t always need to buy it to accumulate it. There are a number of brands and companies out there that promote “free Bitcoin” in some way (do your own research on any platform that offers anything ‘risk-free’, ‘capital-free’, or just, you know, ‘free’, as there can often be more important information than meets the eye). At Mode, we work with a number of partner brands to offer Bitcoin Cashback when you shop at their online stores and #PayWithMode, meaning you can earn Bitcoin without putting any capital at risk. To be able to offer this, we use Open Banking to securely connect to your UK bank account. If you don’t have a Mode account at the time of purchase, don’t worry - your Bitcoin Cashback will be banked for you, but you’ll need to open a Mode account after your purchase to claim these funds (T&C’s apply).

We really love having the opportunity to offer you ways to grow your Bitcoin without putting your capital at risk, but we also feel it’s important you understand the risk exposure that comes with entering the crypto space, and if you’re looking to continue your Bitcoin journey after earning Cashback, consider your moves with that in mind.

 

What’s the deal with Bitcoin’s price? 📈

‍Bitcoin’s value can vary, and its market has been pretty volatile in the past. While the price of Bitcoin can go up, it can also go down (resulting in devastating losses if you have overspent on Bitcoin); crypto could even hit a value of £0.00, rendering your “digital gold” holdings worthless. This poses a great risk to any capital you consider spending on Bitcoin, and it’s worth considering before you take the plunge to assess how much you would be willing to lose without it leaving you dissatisfied or in financial trouble.

Can my Bitcoin be taxed? 💸

In short - probably. Please refer to HMRC guidance or seek professional advice.

Our customers 👋

‍Mode is positioned as a “safety first” firm so we limit the customers who can use our app to UK 18+ residents only. This means our community can be traced, contacted, engaged with and serviced locally in the UK. When Mode believes it is equally safe for other compliance-first jurisdictions to be added to our ecosystem, we'll let you know.

In the same way our customers wish to understand who they are placing their valuable money with, we need to check you out too. Because of our regulatory authorisations, (and because it’s just the way we roll) we must comply with regulations, laws and reporting to combat fraud and money laundering.  To enable this, we need to know who you are and it’s the reason we seek information when opening an account.  We have tough acceptance standards because we are growing at a safe and steady pace.

When you sign up to Mode we’ll ask you for personal and financial information and ask if you want to link your Mode account to your bank account to get started.

If you provide us with information that needs further verification, whilst we apologise for the inconvenience and what may feel like an intrusive question, it’s our number one priority to keep both ourselves and you safe and we’re dead set on maintaining that.

Please reach out to us confidentially at support@modeapp.com if any of our requirements present an obstacle for you on the basis of gender or gender identity.

Competitions 🎲

‍We like to run the odd competition here at Mode, and should you participate in one you’ll always see specific terms & conditions defined and attached to any marketing materials for that competition. Please note, that in any instance all notices outlined on these pages are binding to any and all financial promotions related to or produced by Mode.

Vulnerable customers ✋

We aim to protect vulnerable individuals from getting in above their heads through our onboarding assessments. We look carefully at each Mode applicant and identify flags for vulnerability, based on income not matching any Bitcoin activity, inexperience in money markets, loan activity directed to buy crypto and other common features. We engage these customers discreetly and individually to re-highlight risk warnings and where appropriate, we do not allow access to our platform. We do this because we care about our customers being able to access financial advice from independent professionals if we see indications of financial vulnerability.

Rounding up…

‍We’re firm believers in the future of Bitcoin, and that’s why it's important to us that anyone joining the Mode mission has a safe, secure, and enjoyable experience. We’re not financial advisors, it’s our duty to let you know the risks involved in buying Bitcoin so you can make an informed decision independently.

Thanks for taking the time to read this notice. If you have any questions or concerns, please feel free to reach out to us directly at support@modeapp.com. Please find our full T&C's here.

*The majority of our customers’ Bitcoin is stored in ‘cold storage’ which is not accessible from the internet, and is therefore protected from cyber attacks. Crypto funds held in cold storage with BitGo are also insured up to US$100M, by Lloyds of London.