Don’t invest unless you’re prepared to lose all the money you invest.
Crypto can fall to zero, transfers may be irreversible, and provider failure can leave you without normal deposit protection. Leverage magnifies losses and adds liquidation risk. Take two minutes to understand the boundary before you act.
Risk, leverage & liquidation — read this first
CryptoSherpa publishes guides to crypto mechanics and risk. When comparisons are published, venue data carries evidence limits. It does not tell you what to buy, and nothing here is investment advice. Verify the legal entity, product and protections independently.
What “high-risk” actually means
Prices can fall fast and far, transfers can be irreversible, and venues can freeze withdrawals or fail. Protection depends on the product, entity and country. The SEC warns that crypto asset securities and their platforms may lack important investor protections. You can lose all the money committed.
How leverage maps to liquidation
Leverage multiplies both directions. The higher the multiple, the smaller the move against you needed to consume the margin supporting it. Liquidation happens under the venue's maintenance-margin rules before or around that point. The table shows initial-margin intuition only; it is not a liquidation-price table:
| Leverage | Initial margin | Loss sensitivity |
|---|---|---|
| 2× | 50% | A 1% move in the position is roughly a 2% change relative to initial margin, before fees. |
| 5× | 20% | A 1% move in the position is roughly a 5% change relative to initial margin, before fees. |
| 10× | 10% | A 1% move in the position is roughly a 10% change relative to initial margin, before fees. |
| 20× | 5% | A 1% move in the position is roughly a 20% change relative to initial margin, before fees. |
Exact liquidation depends on maintenance margin, fees, funding, collateral, position mode and mark-price rules. A stop order may also execute worse than expected in a fast market.
Why we flag offshore venues
A venue's jurisdiction changes supervision, complaints routes, insolvency process and enforceability. An offshore registration does not prove fraud, and an onshore registration does not guarantee safety. Match the legal entity in your account terms to the official register and the activity you intend to use.
What CryptoSherpa is — and isn’t
- Is: a library of source-backed safety guides, with informational venue comparisons when published.
- Isn’t: an investment adviser. We never tell you what to buy, never promise returns, and never headline a gain figure.
US product eligibility
Check the legal entity and its permission to offer the exact product in your state. An offshore website accepting a click does not establish US eligibility. Never bypass location or identity controls.
If trading is becoming a problem
If you are chasing losses, trading money you can’t afford to lose, or it’s affecting your sleep, relationships or work — step back. Speak to a regulated financial adviser before any decision, and seek support if the behaviour feels compulsive. Survival beats any single trade.