This written explanation document shall be a requiring user agreement based on the regulation ordinances of the Cabinet Office Ordinance on Virtual Currency Exchange Services, for the users who wish to execute a contract with this Service.
- １．Transaction content Explanatory
- ２．Safety Storage of Customer Assets Related Items
- ３．Risks associated with Cryptocurrency Related Transaction
- (1) Risk of False Identification of Legal Currency
- (2) Price Fluctuation Risk
- (3) Risk of Cryptocurrency transfers
- (4) Liquidity Risk
- (5) Risk of Law/Tax Change
- (6) Risk of Cryptographic information Loss and Leakage
- (7) Risk of Bankruptcy
- (8) Leakage and Compensation of Deposit Asset Risk
- (9) Possibility of Loss occurring due to External causes
- (10) Possibility of Loss occurrence due to Price Fluctuation
- ４．Complaint and Dispute Handling Measures
- ５．Prohibited Acts
１．Transaction content Explanatory
(1) Terms of Transaction
The Company’s Terms of Transaction will be as the following.
① Cryptocurrency exchange (between users): We are an intermediary for cryptocurrency trade executions between the customers.
② Cryptocurrency exchange (Company usage): in case of Conclusion of contract between the Company and the customer, it shall be for cryptocurrency trade. (Order for Enforcement of the Payment Services Act Chapter 2 Article 7 item 1)
③ Management of deposited Japanese Yen assets and cryptocurrency: Withdrawal/Deposition asset management shall be conducted for the customer’s deposited assets.
④ Cryptocurrency Loaning: The deposited assets by the customer will function as a security asset for the cryptocurrency that will be loaned to the customer.
(2) Trading system
As we are providing an online Cryptocurrency Exchange Service, the following method will be the flow of the series of steps for a transaction to be conducted: Deposit of Japanese Yen/cryptocurrency – Order – Order book – Exercise of contract by the internal Company system – transfer of customer’s account balance in the internal Company system – Withdrawal of Japanese Yen/cryptocurrency.
① Competitive trade transactions
a．The order processing system has been adopted as our Competitive Trade system on our exchange.
b．The Company will place orders on our exchange primarily to secure liquid assets and assets in case of unexpected events and unforeseen circumstances. Such order shall not be for revenue purposes. When orders are made by the Company, the order book condition will be paid close attention, adjustments will be conducted to ensure no order quantity and the order price, and that it will have no effect on the price.
c．The order will be managed in order of recorded registration time in the order book, and the contract will be.
The Limit Order will remain in the order book until the whole amount of assets is sold or bought.
A Market Order will be, from the time an order is placed until the total number of orders all are executed in the order book, concluded. However, when the maximum number of contracts specified by the Company has been reached, the Market Order will be concluded.
② Order Reception and Contract Processing related Policy
a．At a time of Limited Order, an order cannot be placed if the price is more of less than 20% divergent from originally placed order price.
b．The Market Order cannot exceed the specified number of orders than can be placed. Moreover, in the order processing, a contract cannot be concluded if the price fluctuation exceeds the fluctuation range specified by the Company. At such events, even if the a sufficient number of placed order has not been met, the Market Order will be closed.
c．Placed orders will be managed in order of time of the placement. Conformity of opposite order and price will conclude a contract. The price will be placed in order of closest to recent contract prices.
d．In some cases during Company maintenance etc. event occurrences, this Service may be suspended and later on be resumed.
During suspension of this Exchange Service due to certain events, the reception of new orders, change/deletion of existing orders cannot be conducted. Furthermore, if Market Orders have not been concluded by the time of suspension periods, all of it will be invalidated. The Limited Order will remain valid.
By the resumption of the system, all services will be provided.
e．During sudden changes in the market such as correction of price levels are conducted due to tremendous divergence of cryptocurrency price level from the displayed price level in the order book, buy orders are extremely low, huge difference in the buy/sell indicative prices emerges, reduction of indicative price etc., a depletion of the liquidity state in the market might suddenly occur.
In case of such situations occur, the transaction anticipated by the customer may become unavailable, the transaction might be executed at a price that is significantly divergent to the customer’s anticipated price point, thus this may lead to unexpected loss and damages. Please note that in such situations, the Company will temporarily restrict and in some cases interrupt the order reception from the customer.
③ Corresponding to Large-Scale Blockchain Forking Phenomenon
a．Information notification method relating to large-scale Forking
In case the Company deems cryptocurrency of a large-scale blockchain handled by the Company ( herein referred to as “forking”) of forking , the forking occurrence time, forking content, the background of the person planning the forking, the anticipation and purpose result of the forking, risks to customers due to forking etc., the Company will publish the information on the homepage required to determine the use of cryptocurrency as appropriate for the customer. We may also inform through individual email etc. if necessary.
b．Corresponding policy for Large-Scale Forking occurrence
We respond to the customers assets as first priority.
- In order to verify the conservation of customer assets and security of customer transactions, temporary suspension relating to cryptocurrency transaction may be executed.
- If it is determined that there are any risks of customer asset conservation and transaction security malfunctions, temporary suspensions relating to cryptocurrency transaction may be executed.
- If the source to the primary factor for malfunctions of customer asset conservation and transaction security is specified, and the policy of counter measure can be confirmed, or if confirmed that transactions can be safely and securely be conducted after a large-scale forking, the temporarily suspension measured will be cancelled.
- About the cancellation of temporary transaction etc. suspension , we will publish information through the homepage, email and social networking services to inform the customer.
- Cancellation of temporary transaction etc., suspension will be implemented by the discretion of the Company. In some cases, there may not be a common movement in the market. In such conditions, related cryptocurrency prices may fluctuate, and unexpected loss may occur.
c．Corresponding policy to new cryptocurrency generation due to forking
We will settle a response policy and review newly generated cryptocurrencies individually.
- About New Cryptocurrency
- As a principal, after observation over a stipulated time period, and if the new cryptocurrency meets the following prerequisite conditions, also if the value of the original cryptocurrency is transferred to the new cryptocurrency, it will be granted if;
- (1).safety ensuring function has been implemented
- (2).transactions are executed safely
- (3).it is confirmed that the person or organization who planned the forking does not profit by excessive monopolization
- (4).it is confirmed that no other events prevent a adequate distribution of the new cryptocurrency
- As a principal, after observation over a stipulated time period, and if the new cryptocurrency meets the following prerequisite conditions, also if the value of the original cryptocurrency is transferred to the new cryptocurrency, it will be granted if;
- For new cryptocurrency to be granted, it has to pass the security and safety test of the Company, and it is required that the original cryptocurrency value is transferred.
- The Company shall own the loan balance of Bitcoin Loans. As a results, newly generated cryptocurrency due to large-scale forking shall belong to the Company.
- Even in cases of new cryptocurrency is not granted to the customer, the Company shall not acquire or dispose of the new cryptocurrency. It shall be stored as it is.
- Instead of granting the new cryptocurrency, the Company may issue money equivalent to the value of the new cryptocurrency to the customer.
- The Company shall inform the customers about our policy regarding the granting of new cryptocurrency through the Company’s homepage, or email and social networking service media.
④ Handling fee etc. Matters
The handling fees that shall be paid by the customer are as listed in the following.
a．Handling fees associated with cryptocurrency trading
b．Deposit handling fee of Japanese Yen
c．Cryptocurrency Withdrawal handling fee
Please refer to “Fees Introduction (Handling fee/Remittance explanation)” for individual fee rates, sums,and other expenses.
⑤ Business Reports and financial statements
The Company’s Business reports and financial statement documents are published in the following URL.
(Business reports and financial statement URL : ：https://blog.btcbox.jp/financial-data )
２．Safety Storage of Customer Assets Related Items
(1) Outline of Customer Assets Safety Storage
Regarding Japanese Yen and cryptocurrency, the Company shall store the Company assets and customer assets separately.
① Japanese Yen
The recorded Japanese Yen balance of the customer account, and customer Bank Account (Trust account) balance collation will be available during business hours. If it is confirmed that the recorded customer balance is lower than the customers Japanese Yen balance, this shortage shall be deposited to the customer account within 2 days from the date specified. Furthermore, the customer’s Japanese Yen balance recorded is stored to be manage so that the balance for each customer can be immediately identified.
② Cryptocurrency
By segregating the wallet managing customers cryptocurrency and the wallet managing the Company’s inherent assets, the customer’s cryptocurrency and the Company’s inherent cryptocurrency assets will be managed separately.
The Company collates daily the total holding cash amount of customers cryptocurrency on the blockchain, and the recorded total cash amount of customers cryptocurrency managed by the Company. As collation results, if the total holding cash amount of the customer’s cryptocurrency is less than the recorded total holding cash amount, this shortage shall be resolved within 5 business days from the next business day. Furthermore, the cryptocurrency amount of the customers will be managed separately in order to be identified immediately in the Company’s book recording.
(2) Equipment and Personnel requirements for Operation related to Safety Management of Customer Assets
Regarding customer assets segregated management, the Company has implemented a cold wallet and a hot wallet. Based on the special characteristics of the of this business, necessary employees are assigned to manage customer assets in order to prevent divisional duties, and division management is recognized in terms of employees and procedures. For specific operational measures, internal rules have been established and operated based on these internal rules.
(3) Policy for addressing loss of customer Assets due to cyber attacks
The Company has established the following policies regarding damages to customer assets for cryptocurrency leakage due to cyber attacks etc.
① In case of cryptocurrency deposited by the customer leaks due to reasons attributable to our Company, the Company shall compensate the customer for the incurred damages according to Law and Regulations.
② The compensation method (including, but not limited to, compensation in cryptocurrency or Japanese Yen) for each of handled cryptocurrencies that has leaked, will be based on a difficulty of procurement, price fluctuations of cryptocurrency after the leakage, and other related circumstances in order to appropriately recover the damage suffered.
③ Regarding the timing of compensation methods for damages, compensation immediately be conducted after the compensation method is determined.
(4) Bitcoin Loan Compulsory Settlement terms
When the customer loans Bitcoin from our Bitcoin Loan service, the total amount of the customer’s Japanese Yen and Bitcoin deposited at that time will be collateral. The compulsory settlement will be executed on the terms that the ratio of the customers collateral assets to the current price of Bitcoin borrowed by the customer is lower than the ratio specified by the Company.
① When compulsory settlements are enforced, due to the collateral assets are less than the ratio specified by the Company, there will be less room for execution within the scope of collateral assets. Accordingly,the borrowed Bitcoin’s price may exceed the scope of collateral assets depending on the trend of cryptocurrency price fluctuation.
② The Company may stop accepting orders due to cryptocurrency forking implementations, or cyber attack prevention etc. that may occur in the cryptocurrency market. In such cases, compulsory settlements may be enforced due to large price fluctuations when order acceptance is resumed.
When compulsory settlements are executed, the customer may experience loss that exceeds the customer’s collateral assets.
③ For more Bitcoin Loan details, Please refer to ”Bitcoin Loan Agreement”
３．Risks associated with Cryptocurrency Related Transaction
There are various risks associated with cryptocurrency transaction. The customer shall fully understand these risks before conducting cryptocurrency transactions at their own discretion and responsibility.
(1) Risk of False Identification of Legal Currency
Cryptocurrency is not a legal currency that is managed by a country or central bank.
Cryptocurrency value is not guaranteed by a specific nation or others.
(2) Price Fluctuation Risk
The price of cryptocurrency, in addition to supply and demand of cryptocurrency, the entry of new competition of cryptocurrency, blockchain technology development etc. that not only connect directly with cryptocurrency event, but also influenced by various events in the world such as commodity prices, currencies, securities/foreign exchange markets trends, government regulation trends, IT technology development etc. Being influenced by any of these, the value of held assets of cryptocurrency of the customer may fluctuate tremendously leading to loss, and in some cases lose its entire value.
(3) Risk of Cryptocurrency transfers
For cryptocurrency transfers, until the transfer confirmation (verification of transfer on the blockchain) is not established, the transfer will will be suspended for a certain period of time. Thus, until the transfer is confirmed on the network, the transfer of the cryptocurrency between the customer and the Company may not be complete, also the transfer indicated by the instructions of the customer may be cancelled. Moreover, the cryptocurrency will be recorded electronically, and the transfer will be executed over the network, therefore it may become lost in the network for any reason.
(4) Liquidity Risk
Depending on changes in the market, cryptocurrency transactions may not be possible or trade may occur at unfavorable prices. Also, orders may incline to either buy or sell orders, establishment of the order may take time, and in some cases it may not be established at all.
(5) Risk of Law/Tax Change
On April 1st, 2017, the Fund Settlement Act was enforced that regulates cryptocurrency transactions, and related Law and Regulations were enforced and improved. Hence, the cryptocurrency exchange was defined and user protection systems were greatly improved. In the future there may be a possibility that cryptocurrency transactions will become forbidden, restricted or strengthened by taxes etc. due to changes in laws, regulations, tax system or policies etc. Cryptocurrency holdings and transactions may become restricted, and handling of cryptocurrency may become more disadvantageous than the present situation. In this case, unexpected losses may occur to the customer.
(6) Risk of Cryptographic information Loss and Leakage
In electronic transaction systems, the required login Id and password information used for electronic confirmation etc., in case of leakage due to theft or eavesdropping etc., there is a possibility that the customer might experience loss due to misuse of the information by a third party.
In case the information of cryptocurrency records・storing managed by the Company related cryptography is lost, the deposited cryptocurrency cannot be transferred, and the utility value may be lost. Also, in case of similar information that is lost due to theft and leakage because of cyber attacks or internal/external fraud intrusions etc., the deposited cryptocurrency can all or partially not be transferred, or it may also be lost.
(7) Risk of Bankruptcy
There is a risk that we cannot continue our business due to events such as changes in the external environment. In the case that we cannot continue our business, all processes including the treatment of customer assets shall be done according to Insolvency Law, Corporation Law, Corporate Rehabilitation Law, Civil Rehabilitation Law and other related laws.
The Company shall manage the Company assets and the deposited assets of customers segregated. In addition, the Company has taken measures to protect the money deposited by customers to the Company by a trustee.
(8) Leakage and Compensation of Deposit Asset Risk
By unauthorized internal/external intrusion or cyber attacks etc., when there is a leakage of the customer’s deposit assets, the Company shall compensate for the loss incurred to the customer. However, in such conditions were the Company is in a vulnerable state, the Company may not be able to completely compensate for the loss incurred to the Customer.
(9) Possibility of Loss occurring due to External causes
Loss may occur to the customer due to disasters, public communication failures, delays in record processing in cryptocurrency transfer recording mechanisms (mining approvals etc.), and other circumstances that might be beyond the Company’s control. In such cases, for loss that might incur to the customer due to external causes not relating to the Company, the Company shall not assumes any responsibility.
(10) Possibility of Loss occurrence due to Price Fluctuation
Cryptocurrency price, as explained in the aforementioned “ Price fluctuation Risk” , in addition to supply and demand of cryptocurrency, the entry of new competition of cryptocurrency, blockchain technology development etc. that not only connect directly with cryptocurrency events, but also influenced by various events in the world such as commodity prices, currencies, securities/foreign exchange markets trends, government regulation trends, IT technology development etc. Being influenced by any of these, the value of held assets of cryptocurrency of the customer may fluctuate tremendously leading to loss and in some cases lose its entire value.
The risks listed above are only a concise explanation of the typical risks associated with cryptocurrency transactions. This is no indication of any risks that might arise in cryptocurrency trading.
４．Complaint and Dispute Handling Measures
(1) Fundamental Policy for Handling Complaints and Disputes
① Any complaints and counseling from the customers will be responded by the Director in charge.
② The Director in charge shall investigate the facts and draft appropriate measures.
③ The Company shall handle personal information of customers handled for handling complaints according to Law and Regulations.
④ Concerning disguised pressured complaints by anti-social forced, the Company shall handle it based on the internal rules of Anti-social forces Correspondence Manual, different from the customer complaint handling correspondence.
⑤ In resolving disputes, under the guidance and supervision of the Company’s internal manager, compliance with the rules and regulations etc. set by the Bar Association, and exercised according to the mediation or arbitration procedures settled on by the Bar Association, and the company shall corporate appropriately in order to strive for resolution.
※ The Company’s Complaint and Dispute etc. Handling Measure’s affair flow will be according to the determined flow of “Regulations related to Complaint and Dispute Handling Measures”
(2) Company installed Service counter
＜Contact Address of Company: BTCBOX co.,Ltd. Compliance Department＞
（Location）〒103-0025
Bricksgate Kayabacho 5th Floor, Nihonbashi Kayabacho 2-8-1, Chuo-ward, Tokyo
（Reception time）Weekdays 09:00~17.30 reception (excl. New Year’s holiday)
Inquiry Service Counter
＜ADR Institute contracted by the Company＞
Tokyo BAR Association ・Dispute Resolution Center
（Telephone Number）03-3581-0031
（Reception Place）〒100-0013 Bengoshikai-kan 6th Floor, Kasumigaseki 1-1-3, Chiyoda-ward, Tokyo
Dai-ichi Tokyo Bengoshikai・Arbitration Center
（Telephone Number）03-3595-8588
（Reception Place）〒100-0013 Bengoshikaikai-kan 11th Floor, Kasumigaseki 1-1-3, Chiyoda-ward, Tokyo
Dai-ni Tokyo Bengoshikai・Arbitration Center
（Telephone Number）03-3581-2249
（Reception Place）〒100-0013 Bengoshikaikai-kan 9th Floor, Kasumigaseki 1-1-3, Chiyoda-ward, Tokyo
＜Joined Organization contact information：JVCEA＞
(Location）〒102-0082
Memorieal Hill 4th Floor, Kawakita 1-18, Chiyoda-ward, Tokyo
(Telephone Number) （03）3222–1061
(Reception Place) Weekdays 09.30~17.00
Exc. National holidays (incl. Compensatory holiday) and New Year’s holiday (December 29th ~ January 3rd)
（Contact Information）：https://jvcea.or.jp/contact/form-contact/
５．Prohibited Acts
In the usage of this service, the customer shall not comply with any of the following acts.
(1) For cryptocurrency related exchanges, or for the purpose of measuring cryptocurrency price fluctuation, to be performed for any of the following act:
① The executor disseminates unreasonable facts with no direct experience to unspecified large number of individuals
② Performing fraud act by using means of trapping others into errors. Acting in a way that thrills others in vain
③ Performing acts of violence or intimidation
(2) In addition to artificially manipulating the price of cryptocurrency, as an act to this change, the following related transaction:
① With the purpose of misleading others, executing cryptocurrency related trade by disguising transactions that are not for the purpose of transferring rights, giving or receiving money, etc
② Conspiring with a third party with the purpose of misleading others about cryptocurrency related trade
③ Transactions conducted with the purpose of enticing others to cryptocurrency related transactions, and with the purpose of creating a misunderstanding about the relevant cryptocurrency related transactions are prosperous
④ Disseminating that the price of cryptocurrencies fluctuate due to market operations by the user or others, or intentionally give false or misleading indications about important matters, in order to entice others to cryptocurrency related transactions
⑤ Performing the act of a series of cryptocurrency related transactions concerning trade with the purpose of nailing, fixing, or stabilizing the price of cryptocurrency
(3) Performing acts the with an false name, or a third person’s name etc. other than the name of the person himself
(4) Perform any act of Insider transactions (concerning the regulations of Article 5, Paragraph 2 item 4 of the “Establishment of Transaction Review System to Prevent Unfair Transaction” of the Japan Cryptocurrency Exchange Association)
(5) Perform any other acts that the Company deems as inappropriate
(6) Act of declaring false information or deliberately incorrect information regarding the information the Company obtains as customer information
(7) Other Prohibited acts that have been specified by the Company are also stated in the Terms of Agreement.
Before starting transactions, please make sure that you read the Terms of Agreement, and have comprehended the general Prohibited Acts.
Please read Pre-contract documents (Law) here.
This clause is a translated version of the Japanese version. It is for reference only and has no legal effect. Please refer to Japanese site for details of the terms.