Risks

Encrypto is non-custodial and multi-partner by design. This page lists the risks that remain.

Partner risk

Card issuance, stablecoin issuance, banking, and payment-rail delivery are contracted to licensed partners. Several layers (swap routing, payment rails, stablecoin issuance) are multi-provider and can route around a single partner's outage. Card issuance and the U.S. money-transmission perimeter are concentrated with a single partner; a sustained outage or partner-side regulatory action would degrade or suspend the affected service.

Custody and recovery risk

Wallet keys are sealed inside a Trusted Execution Environment. Encrypto cannot access user keys; only the user, through an authenticated session, can sign transactions. A user who loses access to every configured authentication method (email, Google, X, phone, and any connected external wallet) may permanently lose access to the embedded-wallet balance. Users can enable multiple authentication methods and export their key.

Counterparty risk (settlement float)

Between authorization and on-chain confirmation, licensed partners absorb short-duration float at the destination rail. The user's wallet is debited at authorization; the partner is reimbursed on confirmation. A partner failure during this window could delay merchant settlement on transactions already in flight. The float sits with the partner, not with Encrypto.

Slippage and execution risk

In high-volatility periods or for low-liquidity tokens, the liquidity engine may not find a route within the user's slippage tolerance. The card transaction is then declined rather than executed at a bad rate.

Stablecoin risk

One regulated stablecoin is the primary settlement asset. A depeg or issuer failure on the primary settlement stablecoin would impact every user's spendable balance and pending settlements.

Chain risk

Each native chain carries its own risk profile: re-orgs, downtime, validator failures, or congestion can delay deposits and settlements. The liquidity engine routes around degraded chains, but a user holding assets on a degraded chain may experience delays.

Regulatory risk

Money-transmission, payment-rail access, and card issuance are regulated activities. Each Encrypto market relies on a licensed partner in that jurisdiction. Regulatory changes in any market could require Encrypto to suspend service, change KYC requirements, or alter product offerings.

Future-product risk

Yield and Credit introduce risks specific to those products: lending-protocol smart-contract risk on underlying venues, collateral liquidation risk, counterparty risk on uncollateralized credit lines.