Cross-border agricultural trade carries structural risks that no platform can eliminate. TruMarket’s operating model is designed to make those risks identifiable, measurable, and — where possible — transferred to specialist counterparties that price them more efficiently than we can. This page describes how we approach the principal categories of risk in our business, what we mitigate against, and what we do not.
The disclosures below are summary in nature. Each transaction is governed by its own commercial agreements, and Capital Partners receive transaction-specific risk information in accordance with the Capital Partner Agreement. Nothing on this page is a substitute for the diligence each counterparty is expected to conduct on its own behalf.
We organise the risks of operating on the TruMarket platform into six categories. Each is described below.
| Category | What it covers |
|---|---|
| Counterparty / credit risk | Default by a buyer, seller, or other transactional counterparty |
| Operational risk | Document handling, milestone verification, settlement execution, platform code and infrastructure |
| Market risk | Commodity-price movement, foreign-exchange exposure, freight and input-cost shifts |
| Regulatory risk | Jurisdictional treatment, KYC/AML, sanctions, tax-authority interpretation |
| Liquidity risk | Capital deployment cycles, exit timing, secondary-market absence |
| Concentration risk | Single-counterparty, single-corridor, single-commodity exposure |
The principal risk in any trade transaction is that one or more counterparties does not perform: a seller fails to deliver goods of the contracted quality on the contracted timeline, or a buyer fails to settle on the contracted date.
Buyer-side coverage. Where credit insurance is available, transactions are placed primarily with Coface, an investment-grade specialist in cross-border commercial credit insurance and TruMarket’s principal credit-insurance counterparty. Where Coface is unable to cover a specific counterparty, the transaction may be placed with a comparable specialist credit insurer, restructured into a smaller exposure, declined, or — where TruMarket determines the counterparty profile justifies direct exposure — taken on a fully-disclosed uninsured basis. The decision and rationale are recorded on the platform.
Coverage limits. Coface coverage is not unlimited and is not unconditional. Coverage is subject to:
Coverage does not eliminate buyer-side risk; it transfers a defined portion of it to a specialist insurer at a known cost. Capital Partners deploying capital in transactions that benefit from insurance coverage are exposed to residual buyer risk to the extent the coverage does not apply or does not perform.
Seller-side controls. Sellers must complete a structured know-your-business onboarding process before any prepayment is advanced. The process covers corporate identity, beneficial ownership, sanctions and integrity screening, and trade-specific qualifications (export licences, certifications, sector approvals where applicable). KYB status is monitored on a continuing basis; lapses suspend the Seller’s ability to participate in new transactions until cured. Prepayment is released against verified shipping and commercial documentation, in milestones tied to verifiable trade events; this structure is designed to limit the exposure that exists at any single point in time.
Capital Partner Vehicle non-segregation. Capital Partner contributions held by AGRO SMART CONTRACTS pending deployment form part of the entity’s general estate and are not legally segregated from AGRO SMART CONTRACTS’ other liabilities, except where specifically agreed in the relevant Capital Partner Agreement. In the event of an AGRO SMART CONTRACTS insolvency event, undeployed Capital Partner contributions would rank pari passu with the entity’s general unsecured liabilities.
Inter-affiliate funding risk under Structure A. Where a transaction is operated by TRU MARKET BLOCKCHAIN as commercial principal but Capital Partner contribution flows through AGRO SMART CONTRACTS (the two-structure deployment described in How It Works), the Capital Partner’s economic exposure includes the performance of TRU MARKET BLOCKCHAIN to AGRO SMART CONTRACTS in respect of the inter-affiliate funding for that transaction. Recovery in case of default depends on the inter-affiliate contractual position and applicable insolvency law. This exposure is in addition to the underlying counterparty, cargo, and quality risks of the transaction itself.
Recovery mechanics. Where a counterparty defaults, recovery proceeds first through the relevant insurance claim (where applicable), then through the underlying commercial contracts. The TruMarket Operating Entity is the contracting principal in each transaction and pursues recovery in its own name. Recovery outcomes depend on the facts of the default, the applicable governing law, and the practical enforceability of the relevant contracts in the jurisdiction of the defaulting party. Recovery is rarely complete and is rarely fast.
Operational risk in our business is the risk that the platform, its people, its third-party providers, or its infrastructure fails to do what it is designed to do.