Pre-Pool-Contribution Risk Acknowledgement

Status: v0.2 draft. You should not sign a real version of this acknowledgement until counsel has signed off in your jurisdiction. The version you see on screen before contributing will mirror the statutory risk warnings required by P2P / loan-based crowdfunding rules in your jurisdiction.

Where this sits in the Custody Framework

This document operates under Category B of the Custody Framework Charter — the escrow-only category that governs lending pool capital, loan accounts, collateral escrow, and the Circle Protection Reserve. Member vote does not apply to Category B custody; the rule is constitutional. Accounts are opened in the name of the Members' own co-operative legal form, with a multi-signature mandate held by the Lending Committee.

Category A — regular cycle contributions in single-jurisdiction Circles, which may be Member-to-member or escrow-held by Member vote — is outside this surface. Category C — Circles that cross a jurisdictional boundary — adds the escrow-only rule to all funds in those Circles; this surface inherits Category C when the Circle is cross-border.

What you are about to do

You are about to contribute capital into your circle's / federation's own lending pool. Your money will be lent to other Members through your circle's (at L0/L1) or federation's (at L2) own member-constituted co-operative legal form that operates the pool in your jurisdiction — the Members' collective vehicle, not a separate or third-party entity. A bank or credit union may custody the dedicated multi-signature lending account but is the account provider only and is never the lender. Circlworld is not the lender. Circlworld provides the platform, the formulas, the governance plumbing, and the audit trail.

You are about to confirm that you understand what this means. Each box you check is a statement you are signing your name to.

What you are confirming

1. My stake is capital at risk. I am not depositing money for safekeeping. I am contributing it into my circle's / federation's own lending pool, which lends to other Members. If those Members default, I may lose part or all of what I contributed.

2. My stake is not a deposit. This is not a savings account. There is no deposit-protection scheme that covers losses on co-operative lending. The protections that apply are:

• The loss waterfall, which reduces (but does not erase) my exposure on any individual loan.
• The pool's reserve, which absorbs the first layer of pool-wide loss.
• The pool's concentration caps and loan-to-pool ratio, which limit how much exposure any single loan or borrower can have to the pool.
• The co-operative-society / credit-union law of the jurisdiction in which the circle's / federation's own co-operative form is registered, which governs the co-operative form's solvency and insolvency.

3. My returns are not guaranteed. Borrowers pay interest. My share of that interest, net of the platform's fees, the circle's / federation's own co-operative form's fees, and the loss-absorption allocations, is credited to my stake. The return varies with the pool's actual default experience.

4. My stake is lock-up-eligible. The portion of my stake that is lent is locked against the active loans it backs. I cannot withdraw the locked portion until those loans repay or close. The idle portion may be withdrawn subject to the pool's withdrawal notice period and current liquidity.

5. The pool may pause withdrawals. Where the pool is in distress, the governance process may pause all withdrawals. I will be notified of any such pause.

6. The pool may wind down. If the pool's governance votes to wind down, my stake is returned to me net of any unrecovered loss, on the wind-down schedule.

7. The entity may become insolvent. The regulated lending entity is a separate legal entity. Its solvency is governed by cooperative / credit-union law in its jurisdiction. Its insolvency is administered under the resolution authority appointed under that law. The platform is not the resolution authority.

8. I understand the loss waterfall. When a borrower defaults, recovery follows the Loss Waterfall Disclosure:

1. Liquidate posted collateral.
2. Call any guarantor.
3. Set off the borrower's own pool stake.
4. Intercept future hand-payouts due to the borrower.
5. Draw the pool's reserve.
6. The residual is shared by the loan's specific funders pro-rata to their share.

The residual on any individual loan is bounded by the unsecured trust that loan was deliberately extended. My maximum loss on a single loan I funded is a number I can read in advance from the underwriting formula, not a surprise on default day.

9. I will not sue Circlworld for funded loss. I have read the Platform Indemnification §3 and I accept it. My counterparty is the Members' co-operative legal form. My fellow funders are pro-rata co-investors with me, not platform employees.

10. I will not sue Circlworld for pool performance. Pool parameters are governance variables. The platform records the parameters; the entity and the pool's elected council operate within them. Performance is a function of the borrowers' conduct.

11. I am not a sophisticated investor by virtue of staking on the platform. I understand cooperative lending is regulated as P2P / loan-based crowdfunding in many jurisdictions, with specific consumer-protection rules that may limit how much I can stake without a sophistication / high-net-worth attestation. Where my jurisdiction applies such limits, I will respect them.

12. The source of my staked capital is lawful. The funds I am staking are mine, lawfully earned and held, and I am willing to attest to that under the platform's AML procedures and the entity's verification.

13. I am staking into the right pool. The pool's jurisdiction matches my residence (or otherwise complies with the rules for cross-jurisdiction staking in my case). I understand cross-border staking outside this rule is not permitted.

14. Tax is my responsibility. Returns on my stake may be taxable in my jurisdiction. The entity issues tax reporting per its jurisdiction. I am responsible for reporting and paying any tax due.

15. I have read the Member Pool Contributor Agreement. I understand it is the binding contract between me and my circle's / federation's own co-operative form (in which the Pool is held).

What you can do before staking

• Start small. The first stake you place in a pool does not commit you to the maximum. The platform will surface concentration limits — you do not need to stake the maximum allowed.
• Stake into the pool you know. L0 (your own circle's pool) carries the most social-collateral protection and the lowest information asymmetry. L1 and L2 introduce more strangers and weaker visibility. Higher levels are not automatically worse, but they are different.
• Read the pool's governance parameters. Reserve %, loan-to-pool cap, concentration caps, withdrawal notice — these are the floors and ceilings on your exposure. The pool's parameters page shows them in plain language with the historical changes.
• Watch one repayment cycle. Many pools encourage Pool Contributors to watch a full repayment cycle before increasing exposure beyond the minimum.

You may not need to stake

If the only reason you are staking is that someone is pressuring you to, stop. Cooperative lending is voluntary. Your circle membership does not require you to fund the pool. If you feel pressured, the platform's Care Concierge is confidential.

Reminder: template only. The version you sign at real stake placement will be specialised for your jurisdiction and will reference the actual entity, the actual pool, and the actual stake amount.