NFT'S

NFT and Metaverse Scams: Cybersecurity

1 https://www.forbes.com/sites/jonathanponciano/2022/01/20/nfts-shatter-monthly-trading-record-with-4-billion-in-sales-heres-why-theyre-still-booming-despite-the-crypto-crash/?sh=67b8df607910

2 https://www.gartner.com/en/newsroom/press-releases/2022-02-07-gartner-predicts-25-percent-of-people-will-spend-at-least-one-hour-per-day-in-the-metaverse-by-2026

3 https://www.gartner.com/en/newsroom/press-releases/2022-02-07-gartner-predicts-25-percent-of-people-will-spend-at-least-one-hour-per-day-in-the-metaverse-by-2026

4 https://www.bloomberg.com/professional/blog/metaverses-80-billion-etf-assets-by-2024-virtually-a-reality/

This material has been prepared for informational and educational purposes only. It does not provide individually tailored investment advice. It has been prepared without regard to the individual financial circumstances and objectives of persons who receive it.

Buying, selling, and transacting in Non-Fungible Tokens (NFTs) or other digital assets and related products, is highly speculative and may result in a loss of the entire investment. These products are intended only for persons who are able to bear the economic risk of investment and who do not need liquidity with respect to their investments.  Buyers, sellers and users of such digital assets should thoroughly familiarize themselves with such risks and considerations before transacting in such other digital assets.  Risks and considerations include but are not limited to: extreme volatility; limited transferability and liquidity; evolving government regulations including tax considerations; and potential for fraud, illegality, hacking, or other disruption in the blockchain or problems with the use and retention of the “private keys” necessary to access a digital asset.

The information contained herein is from multiple sources deemed to be reliable but is not guaranteed and do not necessarily reflect the views, opinions or advice of Morgan Stanley Smith Barney LLC (“Morgan Stanley”) or its affiliates. Morgan Stanley is not responsible for the information or data contained in this material. It has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. It is not a recommendation to purchase or sell NFTs or digital assets nor is it to be used to value any NFTs or digital assets. Investors must independently evaluate a particular NFT/digital asset, investments and strategies, and should seek the advice of an appropriate third-party advisor for assistance in that regard as Morgan Stanley Smith Barney LLC, its affiliates and Morgan Stanley Financial Advisors and Private Wealth Advisors do not provide advice on NFTs or digital assets.

Digital assets, sometimes known as cryptocurrency, are a digital representation of a value that function as a medium of exchange, a unit of account, or a store of value, but generally do not have legal tender status.  Digital assets have no intrinsic value and there is no investment underlying digital assets. The value of digital assets is derived by market forces of supply and demand, and is therefore more volatile than traditional currencies’ value. Investing in digital assets is risky, and transacting in digital assets carries various risks, including but not limited to fraud, theft, market volatility, market manipulation, and cybersecurity failures—such as the risk of hacking, theft, programming bugs, and accidental loss. Additionally, there is no guarantee that any entity that currently accepts digital assets as payment will do so in the future. The volatility and unpredictability of the price of digital assets may lead to significant and immediate losses. It may not be possible to liquidate a digital assets position in a timely manner at a reasonable price.

Regulation of digital assets continues to develop globally and, as such, federal, state, or foreign governments may restrict the use and exchange of any or all digital assets, further contributing to their volatility. Digital assets stored online are not insured and do not have the same protections or safeguards of bank deposits in the US or other jurisdictions. Digital assets can be exchanged for US dollars or other currencies, but are not generally backed nor supported by any government or central bank. Before purchasing, investors should note that risks applicable to one digital asset may not be the same risks applicable toother forms of digital assets. Markets and exchanges for digital assets are not currently regulated in the same manner and do not provide the customer protections available in equities, fixed income, options, futures, commodities or foreign exchange markets.

Morgan Stanley Smith Barney LLC is not implying an affiliation, sponsorship, endorsement with/of the third party or that any monitoring is being done by Morgan Stanley Smith Barney LLC (“Morgan Stanley”) of any information contained within the website. Morgan Stanley is not responsible for the information contained on the third party website or the use of or inability to use such site. Nor do we guarantee their accuracy or completeness.

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CRC#4888554 (08/2022)

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