Crypto Asset Lending Terms

Crypto Asset Lending Terms

 

This English translation is provided for convenience purposes only. The Japanese version of this document shall be regarded as the official version. In the event of a dispute, the Japanese language version shall prevail.

 

Article 1 (Applicability)

 

1. These Crypto Asset Lending Terms (these “Terms”) shall commonly apply to all Individual Agreements (as defined in Article 2) executed between Cygnos Inc., (“we”, “our” or “us”) and a customer who has registered the account (“you”) under “Cygnos Terms of Use” separately established by us (the “Terms of Use”) in connection with any Crypto Asset Lending Transaction (as defined in Article 2); provided, however, that if there is any discrepancy between the provisions of these Terms and any Individual Agreement, the provisions of the Individual Agreement shall prevail.
2. Guidelines, policies, explanations and notices for the Crypto Asset Lending Transaction we post from time to time on our website shall form part of these Terms.
3. Any matter not provided for in these Terms and Individual Agreements (collectively, these “Terms and Agreements” shall be governed by the Terms of Use.
4. Unless otherwise specified, all reference to “time” of day in these Terms refer to Japan time.

 

Article 2 (Definitions)

 

The following terms as used in these Terms and Individual Agreements shall have the following meanings:

 

2. “Subject Crypto Asset” means a crypto asset specified as subject to the Crypto Asset Lending Transaction in an Individual Agreement.
3. “Crypto Asset Lending Transaction” means a transaction in which you lend crypto assets to us and we return the borrowed Subject Crypto Assets to you.
4. “Individual Agreement” means an agreement executed between you and us under these Terms in connection with an individual Crypto Asset Lending Transaction.
5. “Lending Period” means the Lending Period as defined in Article 6.
6. “Lending Day” means each calendar day in the Lending Period, except the Trade Date.
7. “Trade Date” means the Trade Date as defined in Article 4.
8. “Maturity Date” means the Maturity Date as defined in Article 6.
9. “Lending Volume” means the volume specified as that of the Subject Crypto Assets we borrow from you in an Individual Agreement.
10. “Lending Fee Rate” means the rate used to calculate the Lending Fee for the Subject Crypto Assets we borrow from you, and shall be as separately specified.
11. “Lending Fee” means the consideration we pay to you in connection with the Crypto Asset Lending Transaction, and shall be as specified in Article 7.
12. “Business Day” means any day other than days specified as holidays of a bank under the Banking Act (Act No.59 of 1981, as amended) and year-end and new-year holidays.
13. “Market Value” means the exchange rate of the Subject Crypto Asset to the yen offered by the crypto asset price aggregating service designated by us.

 

Article 3 (Your Consent Matters)

 

You will consent to matters listed below in connection with a Crypto Asset Lending Transaction:

 

• A Crypto Asset Lending Transaction is not a product similar to a deposit, or not covered by a deposit insurance scheme;
• We do not provide collateral in connection with any Crypto Asset Lending Transaction;
• A Crypto Asset Lending Transaction does not fall under the category of a crypto asset exchange service under the Payment Services Act (Act No.59 of 2009, as amended), and any Subject Crypto Asset that we borrow from you is not subject to segregated management under the same Act;
• If we become bankrupt, the Subject Crypto Assets we borrowed from you may not be returned;
• You will bear the risk associated with crypto asset price fluctuations; and
• You may not dispose of (including without limitation sell, exchange or send to another address) any of the Subject Crypto Assets you lent us until they are actually returned under these Terms or an Individual Agreement.

 

Article 4 (Offer and Formation of Individual Agreement)

 

If you wish to lend Subject Crypto Assets to us, you shall deliver such Subject Crypto Assets to us by the method specified in the following Article as of the desired date for such lending, and upon our receipt thereof, an Individual Agreement shall be formed (the date when an Individual Agreement is formed under this Article shall be hereinafter referred to as the “Trade Date”).

 

Article 5 (Lending Method)

 

You shall lend Subject Crypto Assets to us by sending them to the wallet address separately designated by us.

 

Article 6 (Lending Period and Return)

 

1. If you wish that all or part of the Subject Crypto Asset(s) you lent us should be returned, you will request us to return such Subject Crypto Asset(s) in a manner specified by us, and the lending period regarding such Subject Crypto Asset(s) will terminate on the eighth (8th) Business Day (the “Maturity Date”) from and including the date when we receive such request (the period between the Trade Date and such Maturity Date shall be referred to as the “Lending Period”)
2. If we receive your request under the preceding paragraph, we will return to you crypto asset(s) of the same kind and volume as the Subject Crypto Asset(s) which you requested us to return under the preceding paragraph, by sending them to the wallet address separately designated by you no later than the third (3rd) Business Day from and including the Maturity Date.
3. In the case of the preceding paragraph, we may, at our reasonable discretion, conduct the customer identification procedure. In such case, (i) if the customer identification procedure is not completed before the payment deadline specified in the preceding paragraph due to your failure to submit necessary documents in a timely manner, (ii) if as a result of the customer identification procedure, your identity is not confirmed (including use of an alias and spoofing), or (iii) otherwise if we reasonably consider you are suspected of money laundering, notwithstanding the preceding paragraph, we may not be able to pay crypto asset(s) of the same kind and volume as the Subject Crypto Asset(s) which you requested us to return under the preceding paragraph.

 

Article 7. (Calculation and Payment of a Lending Fee)

 

1. We shall, on a monthly basis, calculate a Lending Fee for each Lending Day of each month using the following formula, and obtain the sum of Lending Fees of Lending Days of the relevant month (the “Total Monthly Lending Fees”).

 

[Formula]

 

Lending Fee as of each Lending Day (any fractional amount will be rounded down to the eighth decimal place)

 

= (Lending volume as of the relevant Lending Day (*) x Lending Fee Rate as of the relevant Lending Day) / 365

 

(*) The Lending Volume as of 4:00 p.m. on each Lending Day will be used.

 

2. You shall agree that we will, at our reasonable discretion, determine the Lending Fee Rate for each Lending Day, and may raise no objection to it.
3. At 11 a.m. on the first (1st) day of the month following the relevant month, we will incorporate the relevant Total Monthly Lending Fees calculated under paragraph 1 into the Lending Volume of the Subject Crypto Assets as of 10:59:59 a.m. on the same day. In such case, the sum of the relevant Total Monthly Lending Fees calculated under paragraph 1 and the Lending Volume of the Subject Crypto Assets as of 10:59:59 a.m. on the first day of the following month shall be a new Lending Volume of the month following the relevant month.
4. Notwithstanding the preceding paragraph, if you wish the relevant Total Monthly Lending Fees calculated in accordance with paragraph 1 to be paid, you may request us to pay the Total Monthly Lending Fee of the relevant month by the method prescribed by us between 12:00 a.m. and 10:59:59 a.m. on the first (1st) day of the month following the relevant month. If we receive such request by 10:59:59 a.m. on that day, we will pay such Total Monthly Lending Fees by sending them to the wallet address separately specified by you by the eleventh (11th) Business Day from and including that day. If we do not receive such request by 0:59:59 a.m. on the first (1st) day of the month following the relevant month, the Total Monthly Lending Fees shall be dealt with in accordance with the preceding paragraph, as opposed to this paragraph.
5. In the case of the preceding paragraph, we may, at our reasonable discretion, conduct the customer identification procedure. In such case, (i) if the customer identification procedure is not completed before the payment deadline specified in the preceding paragraph due to your failure to submit necessary documents in a timely manner, (ii) if as a result of the customer identification procedure, your identity is not confirmed (including use of an alias and spoofing), or (iii) otherwise if we reasonably consider you are suspected of money laundering, notwithstanding the preceding paragraph, we may not be able to pay Total Monthly Lending Fees in accordance with the application as referred to in the preceding paragraph.

 

Article 8 (Return before Expiration of the Lending Period)

 

1. We may return to you crypto asset(s) of the same kind and volume as the Subject Crypto Assets we borrowed from you at any time by notifying you of the scheduled return date in advance.
2. In the case of the preceding paragraph, assuming as if the day preceding the actual return date is the Maturity Date, we will calculate the Lending Fee for each Lending Day of the month containing the Maturity Date in a manner similar to Article 7, paragraph 1, and pay to you the sum of the Lending Fees for the Lending Days of the month containing the Maturity Date by the eleventh (11th) Business Day from and including the first (1st) day of the month following the Maturity Date.
3. The return of crypto assets under paragraph 1 and payment of the Lending Fees under the preceding paragraph will be made by sending them to the wallet address separately specified by you.

 

Article 9 (Sending Fee)

 

1. If we return to you the Subject Crypto Assets we borrowed from you under these Terms or an Individual Agreement or pay the Lending Fees (collectively, “Send(ing) the Crypto Assets”), you shall bear the sending fee specified by us.
2. The sending fee referred to in the preceding paragraph shall be paid by deducting the volume of crypto assets equal to the sending fee specified by us from the Lending Volume of the Subject Crypto Assets we borrowed from you.
3. If the Lending Volume of the Subject Crypto Assets we borrowed from you is less than the sending fee specified by us, you may not request us to return the Subject Crypto Assets under Article 6, paragraph 1 or pay the Lending Fees under Article 7, paragraph 4.

 

Article 10 (Change in Lending Conditions)

 

You shall agree that we will, at our reasonable discretion, change any conditions of lending, and may raise no objection to it.

 

Article 11 (Handling regarding Hard Fork, etc.)

 

(i) New crypto assets created from a hard fork (meaning a divergence of the blockchain for a Subject Crypto Asset resulting in creating a new and separate crypto asset), (ii) crypto assets distributed by airdrop (meaning a free distribution of the same or different kind of crypto assets by the issuer of a Subject Crypto Asset or its related person to a holder of the Subject Crypto Asset), and (iii) any other rights and proprietary value arising from a Subject Crypto Asset with respect to the Subject Crypto Asset, between the Trade Date and the date when we actually return the Subject Crypto Asset under these Terms or an Individual Agreement  shall belong to us. In such case, you may not request us to deliver these crypto assets, etc.

 

Article 12 (Minimum Lending Volume, etc.)

 

The minimum Lending Volume, the maximum Lending Volume and unit of the Lending Volume shall be as separately specified by us.

 

Article 13 (Burden of Costs)

 

Each party shall bear all of its own costs required to exercise its rights against the other party or preserve its claims.

 

Article 14 (Late Payment Penalty)

 

If we delay Sending the Crypto Asset under these Terms or an Individual Agreement, except for the cases specified in Article 16, we will pay to you the late payment penalty in JPY calculated under the following items:

 

• If we delay returning the crypto assets under these Terms or an Individual Agreement, the late payment penalty at the rate of 1% per annum (365 days pro rata) with respect to the amount of cash converted from the volume of the relevant crypto assets to be returned, based on their Market Value as of the relevant due date of return, for each day of the period from the day following the due date specified in these Terms or the Individual Agreement to the actual return date; or
• If we delay paying the Lending Fees under these Terms or an Individual Agreement, the late payment penalty at the rate of 1% per annum (365 day pro rata) with respect to the amount of cash converted from the volume of the relevant crypto assets to be paid, based on their Market Value as of the relevant due date, for each day of the period from the day following the due date specified in These Terms or the Individual Agreement to the actual payment date.

 

Article 15 (Compensation for Damages)

 

1. Each party shall compensate the other party for any loss or damage (including reasonable attorneys’ fee) caused by a breach of these Terms or an Individual Agreement for reasons attributable to that party.
2. Our liability under the preceding paragraph shall be limited to any loss or damage directly and actually suffered by you unless there is willful misconduct or gross negligence on our part, and shall not exceed 30% of cash in JPY converted from the volume of the Subject Crypto Assets calculated using the following formula, based on their Market Value as of the date when the cause of the loss or damage occurs:

 

[Formula]

 

(Lending Volume at the time when the cause of the loss or damage occurs x Lending Fee Rate at the time when the cause of the loss or damage occurs x actual number of days in one month up to the time when the cause of the loss or damage occurs) / 365 (any fractional amount will be rounded down to the eighth decimal place)

 

3. Notwithstanding the preceding paragraphs, any loss or damage suffered by you as a result of our delay in Sending the Crypto Assets under these Terms or an Individual Agreement shall be governed solely by the preceding article, and the preceding two paragraphs shall not be applicable.

 

Article 16 (Disclaimer)

 

1. When we conduct the customer identification procedure under these Terms or check the details of your application, and (i) if we are unable to confirm your submission of the documents specified by us within the deadline specified by us, (ii) if your identity is not confirmed (including use of an alias and spoofing), or (iii) otherwise if we reasonably consider you are suspected of money laundering, we may fail to Send or delay Sending the Crypto Assets. We will not be liable for any loss or damage suffered by you as a result of our failure of or delay in Sending the Crypto Assets unless there is willful misconduct or negligence on our part.
2. When you Send the Crypto Assets to us under these Terms or an Individual Agreement, and (i) if the crypto assets so sent are those we do not deal with, or (ii) if they are mistakenly sent to the address other than that specified by us (including the case where they are sent to the address we used to but no longer use), you may not request us to return these crypto assets and we will not be liable for any loss or damage suffered by you, unless there is willful misconduct or negligence on our part.
3. If we Send the Crypto Assets to you under these Terms or an Individual Agreement, you shall, at your own responsibility, designate the address to which such crypto assets are to be sent, and we will not be liable for the accuracy and validity of the address information you provide to us. Also, if we Send the Crypto Assets to the address designated by you, we will be relieved from liability with respect to Sending such Crypto Assets unless there is willful misconduct or negligence on our part.
4. In addition to the preceding paragraphs, disclaimer events listed in items of Article 14, paragraph 1 of the Terms of Use shall apply mutatis mutandis.

 

Article 17 (Termination)

 

1. If either party (the “Defaulting Party”) falls under any of the following items, the other party (the “Terminating Party”) may, immediately without notice or demand, terminate an Individual Agreement in part or in whole:

• if its payment is suspended or you become insolvent, or a petition for commencement of civil rehabilitation proceedings, commencement of corporate reorganization proceedings, commencement of bankruptcy proceedings, commencement of special liquidation, special conciliation or commencement of other similar insolvency proceedings is filed against or by it;
• if it receives a disposition to suspend transactions with a clearing house;
• if a petition for protective order such as provisional attachment or provisional disposition, a petition for compulsory execution such as attachment, or a petition for commencement of foreclosure proceedings is filed with respect to its asset(s);
• if it is subject to the procedure for collection of taxes and public dues, or its asset(s) is subject to preservative attachment; or
• if it breaches these Terms or the Individual Agreement and fails to remedy such breach within a period specified in a notice from the Termination Party to do so.

 

2. If an Individual Agreement is terminated pursuant to the preceding paragraph, the Individual Agreement shall be settled as follows:

• In the case of the termination of the Individual Agreement, the date preceding the date of such termination shall be deemed as the Maturity Date;
• We will return to you crypto asset(s) of the same kind and volume as the Subject Crypto Assets that we borrowed from you by the eleventh (11th) Business Day from and including the Maturity Date;
• If we are the Defaulting Party, we will calculate the Lending Fee for each Lending Day of the month containing the Maturity Date in a manner similar to Article 7, paragraph 1, and pay to you the sum of the Lending Fees for the Lending Days of the month containing the Maturity Date by the tenth (10th) Business Day from and including the first (1st) day of the month following the Maturity Date;
• If you are the Defaulting Party, we will not be obliged to pay the sum of the Lending Fees for the Lending Days of the month containing the Maturity Date as specified in the preceding item; and
• The return of crypto assets under item 2 and payment of the Lending Fees under item 3 will be made by sending them to the wallet address separately designated by you.

 

3. The exercise of the right of termination under paragraph 1 and the settlement under preceding paragraph will not preclude the Terminating Party from claiming damages against the Defaulting Party.

 

Article 18 (Elimination of Anti-Social Forces)

 

1. Each party represents to the other party that, as of the date when an Individual Agreement is made, it and its officers and employees do not, and undertakes that they will not, fall under any of the following categories:

• an organized crime group (“Boryokudan”), a member of a Boryokudan, a person with respect to whom five years have not passed since the person ceased to be a member of a Boryokudan, a sub-member of a Boryokudan, a corporation related to a Boryokudan, a racketeer group, etc., a rogue group engaging in criminal activities under the pretext of conducting social campaigns or political activities, a crime group specialized in intellectual crimes, etc. or any other person similar to any of the foregoing (collectively, the “Boryokudan Member, etc.”);
• a person who is recognized as having a relationship in which the management of the entity is controlled by the Boryokudan Member, etc.;
• a person who is recognized as having a relationship in which the Boryokudan Member, etc. is substantially involved in the person’s management;
• a person that is recognized as having a relationship in which the person wrongfully uses the Boryokudan Member, etc. for the purpose of obtaining wrongful profit, whether for itself or a third party, or for the purpose of causing damages to a third party;
• a person that is recognized as having a relationship in which the person is involved in the provision of funds or benefits to Boryokudan Member, etc.; or
• a person whose officer(s) or individual(s) substantially involved in its management have a socially condemnable relationship with Boryokudan Member, etc.

2. Each party covenants that it will not commit any of the following acts by itself or by using a third party:

• a violent demand;
• an unreasonable demand beyond legal responsibilities;
• an act of using threatening words or behavior, or employing violence in connection with a transaction;
• an act of damaging the credibility of or obstructing the business of anther Party by spreading false information, employing fraudulent means or using forces; or
• any other act similar to any of the foregoing.

3. Either party may terminate any Individual Agreement immediately if it reasonably considers the other party breaches any of the undertakings specified in the preceding two paragraphs; provided, however, that the exercise of the right of termination under this Article will not preclude that party from claiming damages against the other party.
4. If an Individual Agreement is terminated pursuant to the preceding paragraph, the Individual Agreement will be settled in a manner similar to Article 17, paragraph 2.
5. If an Individual Agreement is terminated under paragraph 3 above, the terminating party shall not be liable to the other party for damages.

 

Article 19 (Surviving Provisions)

 

Unless otherwise specified in the relevant Individual Agreement, this Article, Articles 6, Article 7, Article 11 through Article 16, Article 17, paragraph 2, Article 17, paragraph 3, Article 18, paragraph 3 through Article 18, paragraph 5, Article 20 and Article 21 shall survive the termination of the Individual Agreement.

 

Article 20 (No Assignment)

 

1. You may not assign, transfer or mortgage to any third party, or otherwise dispose, in whole or in part, of your status under these Terms or any Individual Agreement or all or any of your rights or obligations thereunder without the other party’s approval.
2. Notwithstanding the preceding paragraph, if we assign business relating to this service to another company, we may assign, in whole or in part, our status, rights and obligations under the agreement with you for this service, as well as your registration information and other information about you to the assignee in the process of such business assignment, and you shall hereby be deemed to have agreed to such assignment in advance. The assignment of business set forth in this paragraph shall include not only normal business assignment, but also company split and all other cases where business is transferred.

 

Article 21 (Governing Law and Jurisdiction)

 

1. These Terms and Agreements shall be governed by the laws of Japan.
2. Any dispute arising from or in connection with these Terms or any Individual Agreement shall be submitted to the exclusive jurisdiction of the Tokyo District Court in the first instance.

 

 

 

 

Established on November 1, 2020