CDM EXCHANGE
ACCOUNT AGREEMENT
CDM Exchange, www.www.cdmexchange.com (and its affiliates) (collectively “CDM”) and Investor agree, subject to the provisions in this Account Agreement set forth in paragraph 10, that the following terms will govern the current and all future transactions between the parties involving cryptocurrency, diamonds and precious metals. “Cryptocurrency” will mean, for the purposes of this Account Agreement, any cryptocurrency, in any form, that is the subject of a transaction between CDM and Investor, and shall include, but is not limited to, Bitcoin, Litecoin, Ethereum, Ripple, Stellar Lumens and other available cryptocurrencies and or other cryptocurrencies not yet in existence at the time of this writing. “Diamonds” will mean, for the purposes of this Account Agreement, any diamond or diamond related asset, in any form, that is the subject of a transaction between CDM and Investor, and shall include, but is not limited to, encapsulated GIA certified diamonds and/or loose stones. “Precious Metals” will mean, for the purposes of this Account Agreement, any precious metal, in any form, that is the subject of a transaction between CDM and Investor, and shall include, but is not limited to, bullion bars and coins, numismatic bars or coins, “junk silver” bags and partial bags of coins. This Account Agreement applies to purchases from and sales to CDM, and the warranties and certifications are intended to be applicable.
Independent relationship: You agree that: (a) we are not acting as your broker, intermediary, agent, or advisor, or in any fiduciary capacity, and (b) no communication or information provided to you by us shall be considered or construed as advice.
Customer Identification Program Notice for Cryptocurrency Transactions Only:
Important Information You Need to Know about Opening a New Account. To help the government fight the funding of terrorism and money laundering activities, federal law requires financial institutions to obtain, verify and record information that identifies each person who opens an account.
What types of information will I need to provide?
When you open an account, CDM Exchange maybe required to collect the following information: Name, date of birth, address, Identification number, U.S. citizen: taxpayer identification number (Social Security number or employer identification number). Non-U.S. citizen: taxpayer identification number; passport number and country of issuance; alien identification card number; or government-issued identification showing nationality, residence and a photograph of you. You may also need to show your driver's license or other identifying documents. A corporation, partnership, trust or other legal entity may need to provide other information, such as its principal place of business, local office, employer identification number, certified articles of incorporation, government-issued business license, a partnership agreement or a trust agreement. U.S. Department of the Treasury, Securities and Exchange Commission, and FINRA rules already require you to provide most of this information. These rules also may require you to provide additional information, such as your net worth, annual income, occupation, employment information, investment experience and objectives and risk tolerance.
What happens if I don't provide the information requested or my identity can't be verified?
CDM Exchange may not be able to open an account or carry out transactions with/for you. If CDM Exchange has already opened an account for you, we may have to close it.
1. Delivery of Cryptocurrency, Diamonds, and/or Precious Metals Purchased:
Investor must have “Good Funds” available in their account before any order is placed or confirmed. “Good Funds” may be delivered by personal check, cashiers check, bank wire, Bitcoin, Litecoin, Ethereum or any other cryptocurrency made available to you by CDM. Due to the irreversible nature of cryptocurrency transactions, as well as the chance for CDM to incur loss due to unsatisfied obligations, all sales are final upon taped confirmation (i.e., the products purchased cannot be exchanged or returned for a refund.). Checks should be made payable to CDM Exchange (or its subsidiaries). For bank wire instructions and Cryptocurrency payment instructions, please contact your CDM sales executive. CDM will deliver the Precious Metals, Diamonds or Cryptocurrency wallet(s) (Non-IRA cryptocurrency will be delivered on cold storage wallet or as specified by your IRA administrator) specified in Investors order to a suitable delivery service, wherever applicable, (UPS, USPS, FedEx) for delivery to Investor no more than twenty-eight (28) days after CDM verifies the receipt of funds. It may take up to ten (12) days for verification of personal checks unless further delayed by the issuing bank.
2. Delivery of an Order: Unless otherwise specified in writing at the time of Investor’s confirmation of purchase, CDM will deliver the agreed upon purchased and paid for assets set forth in Investor’s order to the delivery address as instructed by Investor. CDM uses only nationally recognized delivery services and insurers to deliver and insure it’s offerings. In the event Investor’s order is lost prior to delivery, Investor should notify CDM in writing immediately. Report of alleged lost package should be mailed to CDM Exchange,ATTENTION: INVESTOR SERVICES, If the provided carrier verifies Investor’s order was in fact lost, CDM will issue a full refund after receiving funds from the insurance claim. CDM assumes no responsibility for Cryptocurrency, Diamonds or Precious Metals lost after the delivery to Investor. CDM assumes no risk of loss for any Cryptocurrency, Diamonds or Precious Metals purchased from Investor until such assets are delivered to, signed for and accepted by an authorized representative of CDM Exchange, LLC. Cryptocurrency transactions will not be refunded at the same purchase price as original order and will be subject to the new market conditions at the time of the replacement trade.
3. Remedy for Investor’s Failure to Perform: If Investor refuses delivery of Cryptocurrency, Diamonds and/or Precious Metals ordered from CDM, or in any way impedes the transfer of funds from either Custodian to CDM or CDM to Custodian, after an obligation has been made, CDM, at its discretion, may cancel the transaction and sell the products on a wholesale basis. If the wholesale total of such resale is less than the original contract price with Investor, CDM is entitled to recover the difference of funds as an offset to incidental damages caused by Investor’s failure to perform. If the wholesale total is higher than the original contract price, CDM is entitled to keep the difference between the Investor’s invoice price and the wholesale total as an offset to incidental damages.
4. Purchase Price:
4.1. Direct acquisitions:
The purchase price Investor has been quoted and has agreed to pay includes CDM’s margin. General ranges are provided below:
4.1.1. Cryptocurrency: Cryptocurrency transactions are subject to a “Spread”. Transactions spreads range from 5% to 20% based on availability and market conditions at the time. For example: If a particular cryptocurrency is selling on the exchange for $100, if the spread is 10% the client’s cost on that transaction would be $111.11. $100 represents 90% of $111.11. From time to time, Spreads may fall outside of that range given market conditions at the time.
4.1.2. Diamonds: Transactions in the diamond industry are subject to a “Spread”. The “Spread” refers to the difference between the retail price quoted to Investor and the cost CDM incurred to acquire the diamonds Investor has agreed to buy on the day of the purchase. Spreads are also inclusive at CDM which means no hidden fees, no delivery fees and no insurance fees. In order for Investor to make a profit, the Investor must be able to sell the diamonds in the future at a value that is higher than the initial purchase price. CDM Exchange current spread on clear diamonds, is between 10% to 20%. CDM Exchange current spread for any colored diamonds is between 15% to 25%. For example: if a clear diamond has a retail price of $300 and has a 10% spread, CDM’s purchase back from its client of the same diamond at the same exact moment in time is $270. Spreads may fall outside of that range given market conditions at the time. From time to time, Spreads may fall outside of that range given market conditions at the time.
4.1.3. Precious Metals: Similar to the above illustration transactions in the precious metals industry are subject to a “Spread”. The “Spread” refers to the difference between the retail price quoted to investor and the cost CDM incurred to acquire the precious metals investor has agreed to buy on the day of the purchase. Spreads are also inclusive at CDM which means no hidden fees, no delivery fees and no insurance fees. In order for Investor to make a profit, the investor must be able to sell the precious metals in the future at a value that is higher than the initial purchase price. The current spread on all precious metal products is between 5% and 20%. For example: if a 1 oz bullion bar has a retail price of $300 and has a 10% spread, CDM’s purchase back from its client of the same asset at the same exact moment in time is $270. From time to time, Spreads may fall outside of that range given market conditions at the time.
4.2. IRA acquisitions: While Individual Retirement Account transactions take longer to process and may cause CDM to assume certain investment risk with the transaction, CDM’s spread on any IRA transaction will be is exactly as indicated in paragraph 4.1 above. Our clients will not pay a higher fee or spread above our normal pricing.
4.3. LLC IRA acquisitions: Investor agrees that in creating an LLC, Investor is doing so at their own volition. Coordinating LLC documentation with a retirement account custodian is more complicated than other types of transactions. LLC Individual Retirement Account transactions take longer to process and may cause CDM to assume certain investment risk with the transaction. Investor is responsible for all fee payments required to process and open said accounts. CDM’s spread on any IRA transaction will be is exactly as indicated in paragraph 4.1 above. Our clients will not pay a higher fee or spread above our normal pricing.
5. Liquidations: Even though CDM has never refused to buy back products from a client in good standing, the law prohibits CDM from guaranteeing to buy back the Precious Metals, Diamonds and Cryptocurrency it sells and CDM does not guarantee that it will buy back any products that an Investor purchased. If the Investor wishes to liquidate the product or products acquired from CDM in the future, CDM urges Investor to offer them to CDM first. All liquidations are subject to a 1% liquidation fee or $35, whichever is higher. Should CDM offer to purchase back the metals Investor originally purchased from CDM, it is CDM’s current practice, which is subject to change at any time, to offer Investor the highest wholesale price as listed through CDM’s providers for the Cryptocurrency, Diamonds or Precious Metals being repurchased. CDM’s purchase-back price, if applicable, should CDM decide to offer to purchase back the products in question, can change on a second to second basis based on prevailing market conditions, inventory needs, and the price and availability of similar products on the open exchange. CDM does not in any way guarantee that the offer CDM makes to purchase back Investor’s products will be the same value that CDM would pay to acquire the same products from a wholesaler or exchange. CDM does not in any way guarantee that the offer CDM makes to purchase back Investor’s products will be a higher or equal value that another entity might offer for the same products.
5.1. CDM’s Diminishing Spread Program™: For select purchases from CDM only, CDM extends our unique Diminishing Spread Program™. This program enables our clients with qualified transactions to benefit from a substantial reduction in the spread at the time of liquidation. This reduction will allow our clients to improve the liquidation value of their assets even if the market doesn’t move.
5.1.1. Diminishing Spread Program™ breakdown:
0- 5 Years = No reduction from original spread
6 -10 Years = 25% reduction from original spread
11-15 Years = 50% reduction from original spread
16+ Years = 75% reduction from original spread
Example: If the original Spread was 20% and the investor held his investment 11 years before liquidating, CDM would pay the investor based on the lower Spread of 10%, thus increasing his ROI as demonstrated in the illustration below:
- Current Asking Price of Assets (What CDM is currently offering):
$100,000.00 - Original Spread:
20% - Liquidation Date is 1 year after purchase:
Liquidation Value Based on 20% Spread = $80,000 - Liquidation Date is 11 year after purchase:
Liquidation Value Based on 10% Spread = $90,000 - Diminishing Spread Program Program Net Value to Client =
$10,000.00
Diminishing Spread Program™ allows our clients to maximize their exit strategy and is fully transferrable to heirs. All repurchases will be subject to market conditions at the time of liquidation. There is a five percent floor (5%) spread for the Diminishing Spread Program™.
Investor acknowledges that the Diminishing Spread Program™ is not applicable to all purchases. CDM reserves the right to suspend or cancel this program with or without notice anytime in the future if it deems necessary. Currently the Diminishing Spread Program™ is applicable for the following acquisitions:
- Gold, Silver Platinum in fractional sizes or under our promotions.
- All Clear Diamonds.
6. Certifications: An investor looking to sell Cryptocurrency, Diamonds or Precious Metals to CDM declares under penalty of perjury pursuant to 28 USC 1746 that he/she either deals in such articles by vocation or otherwise by occupation or as a result of Investor’s avocation as a collector, speculator, or has and holds him or herself out as having knowledge or skill peculiar to such articles or practices involved in the sale of such assets and any sale to CDM of any form or type of Cryptocurrency, Diamonds or Precious Metals. An investor looking to buy Cryptocurrency, Diamonds or Precious Metals from CDM declares under penalty of perjury pursuant to 28 USC 1746 that he/she either deals in such articles casually or otherwise by his/her respective occupation or as a result of his/her’s avocation as a collector, speculator, or he/she has and holds him or herself out as having knowledge or skill peculiar to such articles or practices involved in the purchase of such assets and any purchase from CDM of any form or type of Cryptocurrency, Diamonds or Precious Metals that CDM may offer. Any purchase of colored diamond gemstones, hallmarked precious metals ingots, and Numismatic Precious Metals Coins is done solely for their collector or Numismatic value.
7. Classifications as Bullion (high mintage and low mintage) or Numismatic: The qualification of a precious metals asset to be classified as either high mintage bullion, low mintage bullion, or Numismatic, may be driven by a number of subjective and objective factors including age, mintage population, condition, chance of future production, pertinent historic events, country or mint of origin, population within a relevant collection, and Investors personal propensity toward a given asset. CDM’s classification of Precious Metals is only an opinion and is subject to potential change at any time. Additionally, because of the subjective nature of the classification process, other dealers may have differing opinions at the same time regard the same or similar products. CDM’s costs and spreads are solely based on CDM’s determined classification of such products chosen by Investor at the time of Investor’s transaction.
8. Classifications (Colored or Clear Diamonds): These classifications are driven by a number of subjective and objective factors including but not limited to: clarity, cut, color, carat, size, shape, fluorescence, pedigree, pertinent historic events, country of origin at time, previous owners within a relevant collection, and an investor’s personal propensity toward a given asset. CDM does not classify colored or clear diamonds. CDM uses professional gemologists, GIA (Gemological Institute of America) certification and uses the Price Sheet(s) provided by the some of the largest and most recognized pricing providers for clear cut diamonds in the world. Such qualifications are subject to potential change at any time based on market conditions. Additionally, because of the subjective nature of the classification process, other dealers may have differing opinions at the same time regarding the same or similar products. CDM’s costs and spreads are solely based on CDM’s determined classification of such products chosen by investor at the time of investor’s transaction.
9. Investment Objectives and Risk Disclosure: CDM is a retailer or seller and purchaser of Cryptocurrency, Diamonds and Precious Metals. While CDM is always willing to give general market comparisons based on the different type of products that are available for purchase, investor recognizes and agrees that no fiduciary relationship exists between investor and CDM. Furthermore, the decision to purchase or sell Cryptocurrency, Precious Metals and/or Diamonds, and which products specifically to purchase or sell, is investor’s decision alone. Purchases and sales are subject to investor’s own due diligence and good judgement. CDM always encourages investor to do their own due diligence. Precious Metals, Diamonds, and Cryptocurrency can be highly volatile, long term investment and Investor should be prepared to hold and products purchased from CDM for a minimum of 3-5 years and preferably 5-10 years in order to maximize investor’s potential for realized profit in the market. CDM believes client should only invest using funds that can be committed for this period of time unless market conditions permit otherwise. Cryptocurrency, Diamonds and Precious Metals are investments, can be highly volatile, are not FDIC insured and carry capital risk. Cryptocurrency, Diamonds and Precious Metals may appreciate, depreciate, or stay the same value depending on many numbers of factors. CDM does not guarantee and makes no representation that the products purchased will appreciate at all or appreciate sufficiently to make the Investor a profit at the expiration of this or any other period of time. CDM believes an investor should allocate no more than 20% of an overall investment portfolio to each of these asset categories. Moreover, Cryptocurrency, Diamonds and Precious Metals do not carry a yield or pay interest and are thus not an appropriate vehicle for investors that are seeking immediate recurring income. The success of an investment in Cryptocurrency, Diamonds and/or Precious Metals depends on outside economic forces including but not limited to international monetary conditions, supply, demand, inflation, regulation or the expectation thereof, and many other factors outside the control of Investor or CDM. Investor acknowledges that the Cryptocurrency, Diamonds and Precious Metals markets are highly volatile and carry significant investor risk. Prices can rise and fall over time and past performance in no way is an indicator of future results. CDM does not provide recommendations, tax, legal or investment advice and no employee, consultant or contractor of CDM is authorized such services or advice to investor in any fashion. Any verbal or written statements from CDM or any employee or representative of CDM are not factual and are only opinions held by the individual and are not the position of CDM or its affiliates. CDM sales representatives are commissioned salespeople or contractors that are paid commissions based on the margin in the transaction of the Precious Metals, Diamonds or Cryptocurrency they might sell. CDM representatives or contractors can also receive bonus compensation based on overall sales figures and incentives tied to inventory and a type of product that they may sell within a given incentive period. CDM sales representatives or contractors are not licensed, have no fiduciary responsibility to investor and their knowledge may vary considerably from representative to representative. CDM makes no representations regarding the tax consequences of holding precious metals or cryptocurrency inside of an existing retirement account. CDM makes no representations regarding the tax consequences of owning Cryptocurrency with discretionary funds. Additionally CDM makes no representations regarding the tax consequences of holding precious metals or cryptocurrency inside of an LLC held by an IRS approved retirement account custodian. Investor should seek their own independent tax advice with either a CPA or their tax advisor.
10. Representation / Warranty: CDM represents and warrants that upon the delivery of “Good Funds”, as specified in Paragraph 1, and subject to the other terms and conditions set out in this Account Agreement, CDM will cause to be delivered to the investor’s specified address provided the type of product (Cryptocurrency wallet, Diamonds or Precious Metals), grade and denomination (if applicable) indicated on Investor’s order. If Investor is ordering a graded Numismatic coin, the grading services used will be either Pacific Coin Grading Systems, INC, Numismatic Guaranty Corporation of America or any other grading service of similar standing. Diamonds will be GIA certified. The only representation or warranty investor may rely on in purchasing Precious Metals or diamonds from or selling Precious Metals and/or Diamonds to CDM is the representation set forth in this paragraph (Paragraph 7). CDM nor any of its representatives are authorized to make any other representations or warranties concerning any Cryptocurrency, Diamonds or Precious Metals that CDM is selling or purchasing under this Account Agreement.
11. Grading: Grading precious metals and diamonds is a subjective determination made by one or more of the recognized grading services listed in Paragraph 7. Grading is an art, not a science and as such can sometimes vary widely even between experts. CDM does not participate in the grading of Precious Metals or Diamonds and thereby relies on the grading service for accuracy. The grade reflects the general condition of a coin, bar or gem as assessed by a leading expert in the field. Any coin or gem that is encapsulated by a grading service and has an accompanying grade issued by that service (not CDM) attached to that coin or gem, Investor acknowledges that and agrees that other grading services may have a different qualification or grade for the same product at the same time. Additionally in describing the product to Investor, CDM only uses the description provided by the grading service when describing the product to Investor. Investor also acknowledges that CDM does not represent that a precious metal or gem has or has not been cleaned nor does CDM represent that toning or tarnish is or is not a natural part of the aging process of certain products. Investor also acknowledges that CDM makes no warranty as to the accuracy of the grade assigned by the grading service.
12. Call Consent and Do Not Call Policy: Investor expressly authorizes CDM Exchange to contact Investor at the telephone numbers provided in this agreement regardless whether these numbers are listed on any state or federal Do Not Call list. If Investor requests that CDM Exchange no longer contact customer, CDM Exchange will promptly place customer on CDM’s internal do not call list.
13. Refund / Exchange Policy: Because of the irreversible nature of cryptocurrency transactions and because of the loss that CDM may incur in the event of an unsatisfied precious metals or diamond order from CDM’s provider, all Cryptocurrency, Diamond and/or Precious Metals transactions are not subject to cancellation and are final after taped confirmation. Products may not be returned for a refund. Order may not be revised or amended at a later date. In the event Investor is dissatisfied with the grade assigned to a Diamond and Precious Metal purchased from CDM, Investor is able to be exchange their purchase in kind. In the event that Investor wishes to exchange their order of Precious Metals and/or Diamonds, and provided the protective packaging for an applicable coin, bar or gem, has not been tampered with, removed, or touched in any form, Investor must notify CDM immediately by fax, email, or mail postmarked no later than the 7th business day after the delivery was signed for by Investor. After receiving the original order in the exact same condition as when delivered, CDM will issue a full exchange of products in kind within 7 business days after receiving new metals or gems from the wholesale provider whenever satisfied.
14. Disclaimer of Express and Implied Warranties: Except as previously defined above, the Cryptocurrency, Diamonds and Precious Metals sold by CDM pursuant to this Account Agreement are sold on an “as is” basis and CDM makes no warranties, express or implied, and specifically disclaims any warranty of merchantability and or fitness for a particular purpose.
15. No Liability For Consequential Damages / Limitation of Liability: In no event should CDM have any obligation or liability (whether in tort, contract, warranty, or otherwise, and notwithstanding any fault, negligence, or strict liability), for any indirect, incidental, special or consequential damages sustained or arising from or related to any transaction covered by this account agreement, even if CDM is advised of the possibility of such damages. Further, CDM’s liability to Investor for any reason and upon any claims shall at all times be limited to the amount actually paid by the Investor for the Precious Metals, Cryptocurrency, and/or Diamonds in dispute.
16. Application to Future Transactions: This account agreement will control all transactions between Investor and CDM unless and until such a time as it is amended by CDM. Investor agrees that CDM may amend this account agreement at any time and that at any point CDM see fit. Should CDM amend this account agreement, CDM will require investor to sign an amended version of this agreement before any future orders will be confirmed. Any amended versions will govern all future transactions between Investor and CDM.
17. Force Majeure: Neither investor nor CDM should be found liable for any failure or delay in its or their performance under this account agreement due to any cause beyond its or their respective reasonable control. This includes acts of God, acts of vandalism, acts of war, terrorism, earthquake, flood, embargo, riot, sabotage, labor shortage or dispute, governmental act or failure of the internet, including, but not limited to, any failure and/or disruption or error in or of CDM’s internal computer systems, or any disruption, failure and/or error in or of any third party Internet Service Providers that CDM may use at any given time.
18. Arbitration of Disputes: Any dispute claim or controversy arising out of or relating to this account agreement or the termination, breach, enforcement, interpretation or validity thereof, including the determination of the scope or applicability of this agreement to arbitrate, or any other dispute, claim or controversy arising out of an interaction CDM and Investor, shall be brought and be determined by arbitration in Los Angeles, CA, before one arbitrator. The arbitration shall be administered by Jams pursuant to its comprehensive arbitration rules and procedures (If the amount in controversy is over $250,000) or its streamlined arbitration rules and procedures (if the amount in controversy is less than or equal to $250,000). CDM and Investor hereby waive their rights, if any, to bring any claim that is subject to this arbitration provision as a class action or otherwise on a representative basis. Judgement on any award may be entered in any court having jurisdiction. This clause cannot preclude parties from seeking provisional remedies in aid of arbitration from a court of appropriate jurisdiction.
19. Choice of law (Individual and Class Claims): The internal, substantive law of California shall govern all individual claims brought by or against CDM in connection with this account agreement or otherwise arising out of any transaction between Investor and CDM (i.e., California’s conflict of law principles will not apply).
20. Time Limitation to Bring Forth Claim: Except where the law prescribes a shorter applicable statute of limitation, or prohibits shortening the otherwise applicable longer statute of limitations, any claim or legal action of any kind arising in connection with or relating to in any way the purchases from or sales to CDM or any other conduct of CDM must be brought within one year after purchase, sale or other event giving rise to the claim or legal action. Notwithstanding the immediately preceding sentence, if the law of the applicable jurisdiction has a “discovery rule”, whereby accrual of the claim is deferred, which is applicable to one or more claims, then the one year (or shorter, if applicable) limitation period specified herein begins running from the date of accrual for such claim or claims as determined by the law of the applicable jurisdiction. If this clause is determined to be unenforceable as to any particular claim or claims under the law of the applicable jurisdiction, it shall remain fully enforceable as to all other claims.
21. Jurisdiction: Jurisdiction and venue for any claim, dispute, or controversy arising out of or relating to this account agreement or the termination, breach, enforcement, validity or interpretation thereof, or any other interaction between CDM and Investor, will be in Los Angeles, California, and any party making a claim against CDM in whatever form hereby submits to personal jurisdiction in that forum for any and all purposes.
22. Finality / Integration Clause: This account agreement is intended by CDM and investor as a final expression of their agreement concerning the matters set forth herein, and is also intended as a complete and exclusive statement of the terms of their agreement. This account agreement supersedes any oral or written statements made prior to, contemporaneous with, or in the future regarding this Account Agreement or the transactions covered hereunder. Investor shall not rely on any statement made by or on behalf of CDM that is inconsistent with this Account Agreement.
23. Severability: If any provision of this Account Agreement is by any court of competent jurisdiction or arbitrator to be invalid, illegal, or unenforceable to any extent, that provision shall, if possible, be construed as though more narrowly drawn, if a narrower construction would avoid such invalidity, illegality, or unenforceability, or, if that is not possible, such provision shall, to the extent of such invalidity, illegality, or unenforceability be severed, and the remaining provisions of this Account Agreement shall remain in full force and effect.
ACCOUNT AGREEMENT Investor ACKNOWLEDGMENT
Client acknowledges and agrees that he or she has read and understands all f the terms and conditions of the account agreement and shall be bound by them. The parties agreement arbitrate and mediate all claims and controversies as set forth in this account agreement.
