Weekly Spotlight

On ETFs and RWAs

By the time you read this today, our expectation – and the expectation of the world at large – is that a number of spot BTC ETFs will have been approved by the SEC and have begun trading on US markets. Contrarians that we are, we have decided not to dedicate the lion’s share of the research this week towards the ETF, simply because it feels like there is little left to write about. We have been covering the moves towards approval for months, and have laid out everything worth knowing in the pages here multiple times.

Written On Jan 10, 2024
6 Min Read

Executive Summary

  • Spot Bitcoin ETFs are expected to be approved today (Wednesday 10th January).
  • We recount our view: likely a sell-the-news event, significant long-term structural benefits.
  • We also talk about RWAs, tokenised assets, and real yield in crypto.

By the time you read this today, our expectation – and the expectation of the world at large – is that a number of spot BTC ETFs will have been approved by the SEC and have begun trading on US markets. Contrarians that we are, we have decided not to dedicate the lion’s share of the research this week towards the ETF, simply because it feels like there is little left to write about. We have been covering the moves towards approval for months, and have laid out everything worth knowing in the pages here multiple times.

We will at least provide a short summary, though. The ETFs are expected to be approved (which has been clear since the SEC lost its case with Grayscale and in the process its blanket criteria for denial, that being the assertion that spot crypto markets were unregulated but futures crypto markets somehow were), and January 10th has been the date thrown around over the last two months or so. The reasons for that date are that a) BlackRock filed for a spot ETF in the summer with a final extension deadline in mid-March, b) almost all companies refiled their own applications to sync up with that, c) BlackRock has a near-perfect record for approval after filing, and d) January 10th emerged because the Ark and 21Shares applications have their deadline on January 10th and never ended up refiling (if those two were to be rejected, the SEC would have to come up with individual reasons that don’t apply to the remaining batch, which would be difficult given how similar all of these applications are in their details).

Our long-standing view here is that the impact of the ETFs would be overestimated in the short term and underestimated in the long term; for the former, the market access granted is not going to suddenly usher tens of billions through the door given how many ways investors of all sizes have to get BTC exposure at this point anyway, and for the latter, an army of pension advisors being able to sell BTC as a necessary part of portfolios to Americans is likely to be a boon in the same way as it was for gold in the 2007-2012 era. Hence, buy the rumour, sell the news, rebuy the infrastructure later.

This view is, at this point, essentially a consensus one. We underestimated how strongly the rumour would be bought, but asides from that, this has been playing out up through now. The push on 52-week and further highs creates some uncertainty here (i.e. do we see a spike after approval, does that spike become enough for momentum to gather and hence buck expectations in the medium-term), but we still take the long-range view that with retail participation in this rally so far being low, we won’t see hundreds of thousands of people suddenly jumping to buy the ETFs on approval, and hence a broad market drawdown is more likely than not over the next couple of months before a structure-breaking rally in Q3-Q4.
That’s all we have to say for the ETF. Instead, let’s talk a little about RWA – real world asset – tokenisation. There is context here, that being the announcement also going out today that Enigma is partnering with OpenTrade to offer an on-chain treasury management product based on ERC-4626 vault technology and tokenised treasury bills for our institutional clients.

The reason that we have partnered up with OpenTrade on said product, and our development work being done on tokenisation and RWAs internally in general, is simple: we think that 2024 is going to be a milestone year for them. Now, long-time industry veterans are going to have one of two reactions to that statement – either “every year since 2013 was supposed to be that year and it’s never happened”, or “I totally agree! I’ve been saying it every year since 2013!”

Jokes asides, RWA tokenisation has tended to be an endless series of pilot programs over the past decade. Why? There are a few reasons, but what it has tended to come down to is that it is always clear what the potential of tokenising an asset and moving on to new forms of transfer and custody through that would be, but it has rarely been clear how it would be of benefit right now. The barriers here vary between different classes of assets, but tend to encompass some combination of continuing custody needs on the underlying, the degree to which it’s necessary to restrict transferability, market access for the tokenised assets vs. traditional venues in situations where tokenisation shuts off the latter (this has been particularly common on equities and equity-like instruments), and so on.
What’s different in 2024, then? The answer: stablecoins. It can be very, very easy to forget this, but adoption of stablecoins on a large level, and general trust in major stablecoin issuers, is an extremely recent phenomenon. For instance, USDC didn’t even exist during the 2017 bull market (launching in September 2018), only passed a market cap of $1 billion in July 2020 (largely due to it becoming a defacto standard for the fiat side of on-chain activity during DeFi summer), and was still at only $4 billion just three years ago.

Our thesis here is that the collective market cap of stablecoins will inexorably trend upwards (currently at around $130bn), because they have established themselves as digital cash. Like cash, they are imperfect representations of wealth, but also like cash, their transferability, their convertibility, and the fact that they are increasingly accepted everywhere in their own right anyway, means that they are here to stay and likely to become a more and more normalised part of life and business as paper cash is on the wane.

This realised component of digital cash defines everything that is to come with RWAs and tokenisation, partially because it does get past or around some of the traditional problems that tokenisation has faced, but more simply because of the simple fact that it means that huge pools of digital cash are going to be sitting around on-chain, waiting for how they can be utilised.
Hence, RWAs and access to real-world yields not only becomes more attractive, at a point it becomes imperative. We have seen what happens in the absence of such products; one of the less-spoken about things that fueled the Terra/Luna boom and blow-up was the offer through the Terra program of 20% yield on what was supposed to be a stablecoin (even though it never really was). While one can find ways to extract ‘real’ yields from a crypto-only or digital-only context, as DeFi found quite quickly in 2020, there are capacity limits on that, and a lot of those yields end up being drops from the pipe of traditional finance at some point anyway (which is why DeFi yields on major protocols have lagged behind even risk-free rate over the last couple of years).

The OT/Enigma product, we will point out (to our own detriment), is far from the only product that exists in terms of on-chain T-bill exposure; naturally, we think it is a sufficiently better product and structure compared to others, but there are quite a few runners in that race. The broader point, however, is that we do see a lot of similarities here to 2020, and the rise of DeFi itself. Again, it’s easy to forget, but outside of stablecoin transactions, even Ethereum was essentially empty and unused starting 2020; asset value locked reaching over $1bn for the first time in January or so was largely not met with celebration, but with derision from Bitcoin maximalists, mocking how long it took to get to that number, decrying the clunkiness and the seemingly lack of applicability of what had been built on-chain to that point, and confidently predicting that Ethereum would remain a ghost chain only used for stables and Ponzi schemes forevermore.

The rest, of course, is history, and this gets to the ultimate point here. If people have money, and you give them something to do to make that money ‘productive’ in whatever form, they will do that. This is what we think a lot of previous tokenisation efforts have missed (shunting assets onto private ledgers that nobody has preexisting assets on for instance), and it’s a mistake that is broadly being corrected across the industry now that there is a smart contract-enabled chain that has said assets at scale – potentially multiple, in fact, looking at the rebirth of Solana and the quiet growth outside of native assets on a few other chains.

Written On Jan 10, 2024
6 Min Read

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1. Acceptance of the Terms

1.1. These terms of use (the “Terms”) set out the terms and conditions under which you (“You” or “Your” as appropriate) can purchase Bitcoin (“Crypto” or “Cryptocurrency”) from Enigma Markets Inc. (the “Service”). Enigma Markets Inc. (“Us”, “We” or “Enigma” as appropriate) is a Delaware corporation Enigma is currently registered as a Money Services Business (“MSB”) with the Financial Crimes Enforcement Network (“FinCEN”).

1.2. You acknowledge and agree that by engaging with Enigma to execute transactions or generally using the Service in any way, You will be deemed to have accepted these Terms. You understand that each order submitted to Enigma may result in Your entry into one or more binding transactions (a “Transaction”). You assume full financial and performance responsibility for all such Transactions created as a result of the process set out in these Terms.

2. Amendment to the Terms

Unless We consider any amendment to be a material change to the Terms (in which case we will provide You with not less than 7 (seven) days’ prior notice (a “Notice”)), We reserve the right to amend the Terms at any time without prior notice to You. All changes shall take effect immediately and an updated version of the Terms shall be published on Our website. If You do not agree to any amendment, you should stop using the Service immediately.

3. Risks

3.1. The risk of loss in trading or holding Cryptocurrency can be high. The price of a given Cryptocurrency can vary greatly in a very short span of time. Many Cryptocurrencies are not backed by any asset, commodity or central bank. You should ensure that You fully understand these risks and You may therefore wish to take legal or financial advice before using the Service or placing any order.

3.2. The regulatory regime governing blockchain technologies, cryptocurrencies, and tokens is uncertain, and new regulations or policies may materially adversely affect the development of our Services and the value of your cryptocurrencies.

3.3. You accept the inherent security risks of providing information and dealing online over the Internet and agree that We have no liability or responsibility for any breach of security unless it is due to our gross negligence.

4. Users

4.1. You must set up and maintain an account to use the Service and submit orders (an “Account”). Your eligibility to use the Service will be assessed on a case-by-case basis and may depend on the country where You reside. Enigma reserves the right to refuse to allow You to establish an account or use the Service for any reason at its absolute discretion.

4.2. You represent and warrant that Your use of the Service, and Your entry into each Transaction to which You become a party complies with applicable law and regulation in Your jurisdiction, including but not limited to: (i) legal capacity and any other applicable legal requirements in Your jurisdiction for trading Cryptocurrency and using the Service, (ii) any foreign exchange or regulatory restrictions applicable to Your use of the Service, and (iii) the receipt of any governmental or other consents (or exemptions) that You may need to be obtain prior to Your use of the Service.

4.3. Nothing in these Terms shall be deemed, nor shall cause, You and Enigma to be treated as partners or joint ventures.

5. The Service

5.1. We will process Your orders in relation to Crypto at our absolute discretion. In order to provide the Service, Enigma may rely on data and prices of third-party exchanges. You acknowledge and understand that Enigma has no responsibility or liability for the provision of the Related Services, which, whether provided by an affiliate or otherwise, are outside the scope of the Terms. Any authority granted by You to Enigma shall extend to the providers of the Related Services, where applicable.

5.2. The Service includes Crypto exchange services (namely the buying and selling of Crypto). Enigma shall not, nor is it under any obligation to, provide You with any advice in relation to the merits or suitability of any Transaction and You are required to rely on Your own judgement before submitting any order to Us.

6. Orders

6.1. You must submit all orders in accordance with these Terms and/or the Enigma Website if applicable. You acknowledge that We reserve the right to decline any order for any reason (including Your breach of the Terms, inadequate funds in Your Account, or market conditions).

6.2. If, following acceptance but before execution of Your order, an event takes place which, in Our reasonable opinion, means it is no longer reasonable to execute such order (for example regulatory action, change in law or following the request of an applicable third-party exchange), You acknowledge that We may cancel Your order without any liability to You (and update Your account balance accordingly).

6.3. Irrespective of the time at which (or medium by which) You place an order, You agree to pay or receive the price at the time the associated Transaction is executed. You acknowledge and understand that the nature of the Crypto market means that the price at which Your Transaction is executed may vary significantly from the price quoted at the time of Your order. Enigma is not liable for any such price fluctuations. The Service is independent of any exchanges, and We are under no obligation to quote or refer to a particular price or index.

6.4. We will use our reasonable endeavours to act upon any request to cancel or amend an order before it is confirmed. You acknowledge and agree that if We are unable to cancel or amend an order before it is confirmed, You will be bound by the resultant Transaction. You agree to accept the price in which Transactions are executed as final and binding.

6.5. You acknowledge and understand that all Transactions are entered into on a matched principal basis and Enigma owes You no fiduciary duty in the course of providing the Service. For the avoidance of doubt, nothing in these Terms shall preclude Enigma (or any other party approved by Enigma at Our absolute discretion) from acting as a market maker (“Market Making Activity”). Any terms, conditions, agreements or rules in relation to Market Making Activity shall be provided separately.

7. Funds

7.1. Enigma’s fund settlement process operates on either a same day (T+0) or delayed settlement basis. All purchase orders to buy Crypto must be paid for with an amount of fiat currency equal to the relevant purchase price plus any associated fees transmitted to and received by our relevant account(s). For all sell orders to dispose of Crypto: (i) the associated number of Crypto; and (ii) an amount of fiat currency equal to the associated fee, must be transmitted to and received by our relevant accounts. Failure to conclude that will result in the rejection of future orders. A list of fiat currencies We accept is available on Our website (“Accepted Currency”) or will be communicated to You in due course. If You attempt to make a payment in any currency other than an Accepted Currency, then such payment may be rejected.

7.2. It is Your responsibility to ensure that You hold sufficient cleared funds and Crypto (when applicable) in your bank account and Crypto wallet to satisfy the settlement of any Transaction. The Service does not include the provision of margin.

7.3. Non-custodial disclaimer.

8. Price

8.1. You acknowledge and understand that when You enter into a Transaction via the Service, the fee for the Transaction will be a fee determined by Us, taking into account market conditions. Such price may include a spread (the “Spread”) as against the price at which we purchased the Crypto. You acknowledge and understand that the size of the Spread can vary dependent on market conditions.

8.2. You also acknowledge that any third-party fees, such as conversion charges and/or card processing fees, will be passed on to You (“Third Party Fees” and together with the Spread, the “Fees”).

9. Cash/Crypto Transmission

9.1. We will establish and maintain one or more bank accounts or digital wallets for accepted fiat currency or Crypto to be transmitted to us by You prior to an Order being executed. You acknowledge and accept that once transmitted, the funds or Crypto will be held in Our account in Our name, or in that of a third-party firm, which may be an affiliate of ours (including, without limitation, Makor Securities London Limited) (a “Third Party Account Provider”). You acknowledge and understand that: (i) the funds or Crypto transmitted to such accounts or digital wallets are Enigma’s own funds or Crypto; and (ii) the transfer of funds or Crypto from You to Us is solely referable to Your purchase of Crypto and is not a deposit.

9.2. In the event of our insolvency, in respect of fiat currency, You will rank as an unsecured creditor of ours for return of such funds if such entitlement arises under the relevant insolvency laws of Delaware; and (vi) in the event of insolvency in relation to the Third Party Account Provider, Enigma may only have an unsecured debt claim against the Third Party Account Provider on Your behalf if such entitlement arises under the relevant insolvency laws of England. Enigma does not accept any liability for losses resulting from its insolvency or the insolvency of a Third-Party Account Provider. Your claim in respect of Crypto if such a claim arises following the insolvency of the Enigma Wallet holder may be limited to an unsecured debt claim, and the Crypto or cash sum You receive in respect of Your Crypto may be insufficient to satisfy Your Account balance.

9.3. In respect of the transfer of the funds, we will aim to [credit Your Account with the corresponding amount of Crypto (provided the terms of your Order have been accepted by Us) within 1 business day of receipt of the relevant Order. In respect of withdrawals, we will debit Your Account, when agreed upon delay, with the corresponding amount of fiat currency following Your authorisation.] The corresponding funds will then settle to Your bank account within 3 business days. We are not responsible for any delay in the settlement of a Transaction resulting from circumstances beyond our control, including any third-party systems failure.

9.4. You acknowledge and understand that the Crypto Which Enigma supports may change from time to time.

9.5. You will not be entitled to interest in respect of any funds or Crypto held by Us, a Third-Party Account Provider or an Enigma Wallet holder.

9.6. As described above, Your money and Cryptocurrency will not be segregated. Consequently, If We or a Third- Party Account Provider become insolvent, there may be delays in identifying individual assets, increasing the risk of loss.

10. Tax

It is Your sole responsibility to determine whether and to what extent any taxes apply to the Transactions and, if applicable to report and remit the correct payment to the appropriate tax authorities. Enigma does not and will not provide any advice with respect to the tax implications of Your entry into Transactions.

11. Delivery

Following the execution of a Transaction, delivery will occur on Enigma’s records and Your Account balance will be updated accordingly.

12. Security

12.1. You shall be solely responsible for controlling and monitoring the use of the password to Your Account, and shall not permit any person to provide Your password, to any third party. You acknowledge and agree that You shall be bound by any actions taken through the use of Your Account including all orders and the resulting Transactions or other arrangements, as applicable, whether or not such actions were authorised by You. We accept no liability for any loss that You may sustain due to compromise of Your password and/or Account that did not arise directly as a result of Our loss or negligence. If You believe Your Account has been compromised, You should contact us immediately at info@enigma-securities.io.

12.2. By registering an Account, You agree to be bound by and to indemnify and hold Enigma harmless for any and all actions taken by, or omissions of, individuals using an instruction to transfer Crypto to a digital wallet (a “Wallet”).

13. Information Provided

13.1. Any information provided to You via Our website or otherwise does not amount to investment advice. You may use this information for the purposes of the Service only, and shall not disseminate or reproduce the information in any way. Any price quoted or referenced on the website if applicable may be different from the execution price of the Transaction. Enigma does not recommend that any cryptocurrency should be bought, sold, acquired or held by You and will not be held responsible for any decision you make in this regard based on the information provided by Enigma

13.2. Enigma does not provide investment, tax, or legal advice, and you are solely responsible for assessing whether any transaction you enter into via Our Service is appropriate for you based on your objectives, financial circumstances and risk tolerance.

13.3. We provide the Service on an “as-is” basis to facilitate the submission of orders and execution of Transactions and any reasonably related activity (the “Permitted Purpose”).

14. Your Warranties

14.1. You hereby represent and warrant that:

14.1.1. You have the right, power, and ability to enter into and perform under the Terms;

14.1.2. You have, and comply with, all necessary rights, consents, licenses, and approvals for the operation of your business and to allow you to access and use Our Service in compliance with the Terms and applicable laws, rules, and regulations;

14.1.3. You are authorized to initiate transactions from Your bank account and digital wallet;

14.1.4. In the event that You authorize Enigma to transfer Crypto to a Wallet, whether hosted by You or a third party, such Wallet is beneficially owned by You.

14.2. In connection with the foregoing representations and warranties, You further agree as follows:

14.2.1. You shall indemnify, defend and hold Enigma harmless for any and all claims, losses or damages arising from or related to any breach of the foregoing representations and warranties; and

14.2.2. Enigma may terminate Your Account immediately upon written notice in the event that it concludes, in its reasonable opinion, that You have materially breached any representation or warranty under this Agreement (following applicable notice, grace and cure periods).

15. No Warranty

15.1. The Service is provided “as is” and “as available” without warranties of any kind, whether express or implied. To the fullest extent permissible pursuant to applicable law, we, our subsidiaries, affiliates, and licensors make no express warranties and hereby disclaim all implied warranties regarding the Service and any part of it (including, without limitation, the site, any smart contract, or any external websites), including the implied warranties of merchantability, fitness for a particular purpose, non-infringement, correctness, accuracy, or reliability. We do not make any representations or warranties that access to any part of the Services will be uninterrupted or error-free.

15.2. Neither Enigma nor its affiliates gives any express or implied warranties or representations (including warranties of satisfactory quality and fitness) relating to: (i) any third party systems or protocols used to support the Service; (ii) the long-term value of any Crypto; (iii) the liquidity of any Crypto market or exchange; (iv) the accuracy or timeliness of historical Crypto price data made available to You by one of Our brokers; (v) the amount of time needed to execute a Transaction following an order (which is dependent on factors outside of Our control); (vi) the immutability or security of blockchain or underlying software underpinning any Crypto or any digital wallet (including the Enigma Wallet) associated with the Service (together, the “Technology”); or (vii) the freedom of the Technology from any errors, viruses or disruption.

16. Limitation of Liability

TO THE FULLEST EXTENT PROVIDED BY LAW, IN NO EVENT WILL ENIGMA, ITS AFFILIATES, OR THEIR LICENSORS, SERVICE PROVIDERS, EMPLOYEES, AGENTS, OFFICERS, OR DIRECTORS BE LIABLE FOR DAMAGES OF ANY KIND, UNDER ANY LEGAL THEORY, ARISING OUT OF OR IN CONNECTION WITH YOUR USE, OR INABILITY TO USE, THE SERVICE OR ANY WEBSITES LINKED TO IT, INCLUDING ANY INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL, OR PUNITIVE DAMAGES, INCLUDING BUT NOT LIMITED TO, PERSONAL INJURY, PAIN AND SUFFERING, EMOTIONAL DISTRESS, LOSS OF REVENUE, LOSS OF OPPORTUNITY, LOSS OF REPUTATION, LOSS OF PROFITS, LOSS OF BUSINESS OR ANTICIPATED SAVINGS, LOSS OF USE, LOSS OF GOODWILL, LOSS OF DATA, AND WHETHER CAUSED BY TORT (INCLUDING NEGLIGENCE), BREACH OF CONTRACT, OR OTHERWISE, EVEN IF FORESEEABLE.

WITHOUT LIMITATION TO THE ABOVE, IN NO EVENT SHALL ENIGMA BE LIABLE FOR ANY AMOUNT GREATER THAN THE VALUE OF THE CRYPTO AND FIAT CURRENCY THAT IS CREDITED TO, (OR WHERE APPLICABLE, OUGHT TO HAVE BEEN CREDITED TO, YOUR ACCOUNT) AT THE TIME OF ANY ALLEGED LOSS OR CLAIM.

YOU ACKNOWLEDGE AND AGREE THAT WE HAVE MADE THE SERVICE AVAILABLE TO YOU AND ENTERED INTO THESE TERMS IN RELIANCE UPON THE WARRANTY DISCLAIMERS AND LIMITATIONS OF LIABILITY SET FORTH HEREIN, WHICH REFLECT A REASONABLE AND FAIR ALLOCATION OF RISK BETWEEN THE PARTIES AND FORM AN ESSENTIAL BASIS OF THE BARGAIN BETWEEN US. WE WOULD NOT BE ABLE TO PROVIDE THE SERVICE TO YOU WITHOUT THESE LIMITATIONS.

THE FOREGOING DOES NOT AFFECT ANY LIABILITY THAT CANNOT BE EXCLUDED OR LIMITED UNDER APPLICABLE LAW.

17. Termination

We may, at Our sole discretion: (i) close Your Account for any reason by giving seven (7) days’ notice or (ii) with or without prior notice suspend or terminate the Service (or any part of the Service) without liability to You. If Your Account is in credit on the date of termination (howsoever occurring), We will aim to transfer the funds and/or Crypto to Your bank account or Crypto wallet (as applicable) within 3 working days minus any Fees or payments that are due to Us.

18. Supplemental Terms

If You have agreed to use Connectivity or a Trading Platform (both as defined in Appendix 1), the terms of Appendix 1 will also apply.

19. Governing Law

These Terms are governed by and construed in accordance with the laws of the state of Delaware, without giving effect to any choice or conflict of law provisions.

20. DISPUTE RESOLUTION; ARBITRATION

PLEASE READ THIS SECTION CAREFULLY. IT MAY SIGNIFICANTLY AFFECT YOUR LEGAL RIGHTS, INCLUDING YOUR RIGHT TO FILE A LAWSUIT IN COURT. ALL DISPUTES ARISING OUT OF OR RELATED TO THESE TERMS OF USE OR ANY ASPECT OF THE RELATIONSHIP BETWEEN YOU AND US, WHETHER BASED IN CONTRACT, TORT, STATUTE, FRAUD, MISREPRESENTATION, OR ANY OTHER LEGAL THEORY, WILL BE RESOLVED THROUGH FINAL AND BINDING ARBITRATION BEFORE A NEUTRAL ARBITRATOR INSTEAD OF IN A COURT BY A JUDGE OR JURY, AND YOU AGREE THAT THE COMPANY AND YOU ARE EACH WAIVING THE RIGHT TO SUE IN COURT AND TO HAVE A TRIAL BY A JURY. YOU AGREE THAT ANY ARBITRATION WILL TAKE PLACE ON AN INDIVIDUAL BASIS; CLASS ARBITRATIONS AND CLASS ACTIONS ARE NOT PERMITTED AND YOU ARE AGREEING TO GIVE UP THE ABILITY TO PARTICIPATE IN A CLASS ACTION.

Any disputes arising from this Agreement shall be decided by binding arbitration which shall be conducted, at the request of any party, in Philadelphia, Pennsylvania, before one arbitrator designated by the American Arbitration Association (the “AAA“), in accordance with the Commercial Arbitration Rules of the AAA, and to the maximum extent applicable, the United States Arbitration Act (Title 9 of the United States Code). Notwithstanding anything in this Agreement to the contrary, any party may proceed to a court of competent jurisdiction to obtain equitable relief at any time. An arbitrator shall have no authority to award punitive damages or other damages not measured by the prevailing party’s actual damages. To the maximum extent practicable, an arbitration proceeding under this Agreement shall be concluded within 180 days of the filing of the dispute with the AAA. This arbitration clause shall survive any termination, amendment, or expiration of the Agreement and if any provision of this arbitration clause is found to be unenforceable, the remaining parts of the arbitration clause shall not be affected and shall remain fully enforceable.

21. NO CLASS ACTION

YOU AND THE COMPANY AGREE THAT EACH MAY BRING CLAIMS AGAINST THE OTHER ONLY IN YOUR OR ITS INDIVIDUAL CAPACITY AND NOT AS A PLAINTIFF OR CLASS MEMBER IN ANY PURPORTED CLASS OR REPRESENTATIVE PROCEEDING.

22. CONTACT US

All feedback, comments and questions on the Terms should be sent to info@enigma-securities.io.

Appendix 1

Electronic Connectivity and Trading Platform Facilities

A1 Access and use: We may permit You to place transaction orders in cryptocurrencies with us by direct electronic communication to us through an electronic system (“Connectivity”). We may also provide You with electronic access to a platform to enable You to execute transactions electronically (the “Trading Platform”) which includes all related software and accompanying documentation. Your right to use Connectivity or the Trading Platform and any financial data, market and business information provided on or through Connectivity at the Trading Platform (“Information”) is limited to use for the purpose of receiving and viewing Information for the transmission and execution of transaction orders. We may amend the terms of this Appendix 1 with respect to the addition of a financial instrument or an execution issue to our Connectivity or Trading Platform services.

A.3 Licences: Connectivity and the Trading Platform are owned by us (and/or an affiliated entity) or third parties that license their use to us (and/or an affiliated entity) (the “Licensors”). You acknowledge and agree that Connectivity and the Trading Platform are the exclusive property of the Company and/or the Licensors, and that the Information is the exclusive property of ours and/or the Licensors or such licensor’s third party vendors or their suppliers, and we the Licensor and such third party vendors and their suppliers retain all proprietary right, title, and interest, including, without limitation, copyright, in the Information. We grant You a personal, limited, revocable, non-exclusive, non-transferable license to access and use Connectivity and the Trading Platform under the terms of this Appendix 1. You shall not copy, license, sell, transfer, make available Connectivity or the Trading Platform or information to any other person. You shall not remove or alter any copyright notice or other proprietary or restrictive notice contained in Connectivity, the Trading Platform or Information.

A.4 Access responsibility: You are responsible for obtaining and maintaining, at Your cost, the necessary computer equipment and internet access required to enable You to access and use the Connectivity, the Trading Platform and Information. You are responsible for any equipment, software or internet access provided by a third party which You require to access and use Connectivity and the Trading Platform. You acknowledge and agree that we (and affiliated entities) are not responsible for any Connectivity or Trading Platform interface applications with third parties such as execution venues, information vendors and other investment firms such as derivative exchange execution and clearing brokers.

A.5 Information changes: Certain Information may be provided by third parties. If any of the Information ceases to be furnished by any third party vendors in a manner which is compatible with Connectivity or the Trading Platform, we may remove as much Information as is affected, without advance notice, without incurring any liability to You, and without any change to any of Your payment or other obligations. Further, we may modify, amend, alter, update, supplement or replace Connectivity or the Trading Platform software (which, among other things, determines the functionality and appearance of some or all of the Connectivity or Trading Platform features) from time to time, in whole or in part, without any notice (except for material changes to functionality as reasonably practical), without incurring any liability to You, and without any change to any of Your payment or other obligations. You acknowledge and agree that Your use of Connectivity or the Trading Platform after any modification, amendment, alteration, update, supplement or replacement shall constitute Your acceptance of such modification, amendment, alteration, update, supplement or replacement.

A.6 Security: You shall keep any user name, password or access code (referred to in this Appendix 1 as “User Codes“) provided to You for Connectivity or access to the Trading Platform confidential and secure. You shall be responsible for the safeguarding and security of Your User Codes. You shall be solely responsible for all orders and transactions arising from any person’s Connectivity use or access to the Trading Platform using Your User Codes notwithstanding any lack of our access controls or the failure of any access controls we may have implemented. You shall notify us immediately and in writing in the event of (i) any loss or theft of part or all of the User Codes; or (ii) any actual or suspected unauthorised use of the User Codes; or (iii) any actual or suspected breach of security or confidentiality of the User Codes. You shall maintain with respect to Connectivity and the Trading Platform adequate systems and controls to ensure that (i) use is only by authorized personnel; (ii) order accuracy, order size, compliance with credit and order limits is checked and validated; and (iii) order direction, order duplication and order retransmission errors do not occur. You will ensure that no computer viruses, worms or similar items are introduced through Connectivity to our computer systems and networks or to the Trading Platform. You will be responsible for the installation and proper use of any virus detection software which we may require.

A.7 System risk: Connectivity the Trading Platform and Information is provided “as is”. The entire risk as to the quality and performance of Connectivity or the Trading Platform or Information and any third party related goods and services is with You. We (or affiliated entities) make no warranties (express or implied), representations, or guarantees as to merchantability, fitness for any particular purpose, performance, service continuity, absence of interruptions or errors or otherwise with respect to Connectivity or the Trading Platform or Information. Neither we nor our affiliated entities nor licensors, third party vendors or suppliers of Connectivity, the Trading Platform or Information, shall have any obligation or liability to maintain Connectivity, the Trading Platform or Information or to supply any corrections, updates or releases. We reserve the right, in our absolute discretion, and without prior notice, to reject cancel or refuse to display or seek execution of any order for any reason. We may at any time and in our absolute discretion impose and vary limits and conditions upon the placement of orders using Connectivity or the Trading Platform including limits on size, order types and execution venues and conditions concerning collateral requirements.

A.8 No execution guarantee: You acknowledge and agree that Connectivity or Trading Platform order entry does not guarantee order execution. We will not be responsible for any execution of orders that are not received by reason of Connectivity or Trading Platform malfunction or otherwise. When You use Connectivity or the Trading Platform, unless You have received an electronic order acknowledgement, Your order will be deemed not to have been received. In the event You dispute or deny knowledge of any order which has been electronically acknowledged we will in either case be entitled immediately to liquidate or otherwise offset the position in the relevant investment or financial instrument without prejudice to such other rights we may have under this Appendix 1. Execution venues may reject or cancel Your transaction orders for which we accept no responsibility. You acknowledge that: (1) orders may be delayed for many reasons and the price of a security at the time of order entry may not be the same as the price of such security at the time such order is executed; and (2) cancellation of orders may not be possible prior to execution, even if the cancellation order is received prior to the time at which the order was to be executed.

A.9 System compliance training: You shall provide Your employees that use the Connectivity or Trading Platform with adequate information and training upon (i) the terms of this Appendix 1; and (ii) execution venue rules which we or our affiliated entities are subject and which You must also comply to ensure there is no breach of such rules by us or an affiliated entity. With respect to Connectivity or Trading Platform use for transactions on regulated markets, multilateral trading facilities or exchanges You shall neither engage in, nor facilitate, nor fail to take reasonable steps to prevent:

  • any action or any course of conduct that has the effect, or may be expected to have the effect, of artificially and/or abnormally moving the price or value of any cryptocurrency, or securities admitted to the regulated market or exchange, or any instrument underlying such cryptocurrency or securities or the level of any index of which such cryptocurrency or securities are a component;
  • entering artificial orders or otherwise entering into or causing any artificial transaction;
  • reporting a fictitious transaction or any other false data to the regulated market, exchange or other competent authority or causing such data to be input into any of their systems;
  • any action or any course of conduct that creates or may reasonably be expected to create any false or misleading impression as to the market in, or price or value of, any cryptocurrency, securities or related financial instruments;
  • any other action or any other course of conduct that may damage the integrity and the transparency of the regulated market or exchange; or
  • agreeing or acting in concert with, or providing any assistance to, any person with a view to or in connection with any action or course of conduct referred to in paragraphs (a) to (f) inclusive.

A.10 System misuse: You shall not use the Connectivity or Trading Platform for orders or transactions for or in connection with any activity which may constitute a fraudulent or illegal purpose or market abuse or otherwise use the Connectivity or Trading Platform in contravention of any applicable law and regulatory provisions. For the purposed of this Appendix 1 “market abuse” means behaviour in relation to investments which involves insider dealing, market manipulation or market distortion in breach of applicable laws or regulatory provisions. You undertake to familiarise Yourself and comply with any applicable law and regulatory provisions concerning the short sale of securities if You seek to execute a short sale transaction and You will ensure that Your use of the Connectivity or the Trading Platform will not result in a breach by us (or any affiliated entity) of any applicable law and regulatory provisions concerning the short sale of securities or any terms of this Appendix 1 concerning short sale orders or transactions.

A.11 Order entry error: If an order entry is made using the Connectivity or Trading Platform by mistake or does not reflect the intended transaction (an “erroneous order”) then You shall be responsible for amending or canceling such orders as necessary and for closing any resultant positions subject to our rights in this Appendix 1.

A.12 Preexecution controls: We reserve the right to limit Your use of Connectivity and the Trading Platform and apply pre-execution trading controls as may be appropriate to preserve compliance with applicable law or this Appendix 1 or any other trading limits or redirection which may be notified to You. With respect to the use of Connectivity or the Trading Platform, we shall have the right to reject or cancel orders or enter off-setting orders or restrict Your ability to enter further orders in the event You act in breach of the terms concerning Connectivity or the Trading Platform in this Appendix 1. Connectivity or the Trading Platform, Your access thereto and any information, service feature or function provided by means of Connectivity or the Trading Platform may be changed, limited, suspended, discontinued or terminated by us at any time without notice or liability.

A.13 Disclaimer: Neither ourselves nor any affiliated entity (nor any director, officer or employee thereof) shall have any liability to You or any third party for any losses (including loss of profits), expenses, costs, claims, damages (including punitive, special or exemplary damages) or for any account of profits or other restitution of any kind whatsoever arising from or incidental to the provision of access to or use of Connectivity or the Trading Platform or Information (including any failure to provide access to Connectivity or the Trading Platform or any operational failure of Connectivity or the Trading Platform or the introduction of any viruses, worms or similar items into Your computer systems and networks through Connectivity or the Trading Platform or any software we provide).

A.14 Indemnity: You shall indemnify and hold us and any affiliated entity harmless (and our respective employees, officers, directors and agents) from and against any and all claims, demands, legal actions or proceedings and all liabilities, damages, losses, expenses and costs (including legal and accounting fees and expenses) (collectively “Losses“) arising out of or incidental to Your use of, or access to, Connectivity or the Trading Platform or any associated third party services or equipment provided under the terms of this Appendix 1 except to the extent that any such Losses, as finally determined by a Court of competent jurisdiction, were caused solely and directly by dishonest or wilful misconduct of us or any affiliated entity.

A.15 Thirdparty software: To the extent that You are using Connectivity or the Trading Platform in conjunction with a third-party software (including, but not limited to, an algorithm), we expressly disclaim liability for any Losses arising from such third-party software. This disclaimer is without prejudice to any other provision of the Terms or Appendix 1.

1. Acceptance of the Terms

1.1. These terms of use (the “Terms”) set out the terms and conditions under which you (“You” or “Your” as appropriate) can trade cryptocurrencies, for example Bitcoin or Ethereum (“Crypto” or “Cryptocurrency”) using Enigma Securities Limited (the “Service”). Enigma Securities Ltd (“Us”, “We” or “Enigma” as appropriate) is a company registered in England and Wales with company number 11114339 and registered office 6th Floor, 30 Panton Street, London SW1Y 4AJ, UK. Enigma is registered with the Financial Conduct Authority (the “FCA”) for certain cryptoasset activity (with reference number 930442) and is an Appointed Representative of Makor Securities London Ltd which is authorised and regulated (with reference number 625054) by the FCA.

1.2 .  You acknowledge and agree that by engaging with Enigma to execute transactions or generally using the Service in any way, You will be deemed to have accepted these Terms. You understand that each order submitted to Enigma (whether by voice broking, email or via any other electronic interface that We may provide and/or accept) may result in Your entry into one or more binding transactions (a “Transaction”). You assume full financial and performance responsibility for all such Transactions created as a result of the process set out in these Terms.

2. Amendment to the Terms

Unless We consider any amendment to be a material change to the Terms (in which case we will provide You with not less than 7 (seven) days’ prior notice (a “Notice”)), We reserve the right to amend the Terms at any time without prior notice to You. All changes shall take effect immediately and an updated version of the Terms shall be published on Our website. If You do not agree to any amendment then You should stop using the Service immediately.

3. Risks

3.1. Cryptocurrencies such as Bitcoin and Ethereum are not currently classified as a type of regulated financial instrument under the current UK or European regulatory frameworks (including MiFID II). This means that the Service and Related Services are not governed by the same rules and regulations that apply to similar services relating to other products, for example, derivatives. You will not therefore benefit from the statutory client money protections available to clients receiving regulated investment services, including access to the Financial Services Compensation Scheme and the Financial Ombudsman for dispute resolution. The FCA client money regime, as set out in the FCA’s Client Asset Sourcebook, will also not apply to our provision of the Services to You.

3.2. The risk of loss in trading or holding Cryptocurrency can be high. The price of a given Cryptocurrency can vary greatly in a very short space of time. Many Cryptocurrencies are not backed by any asset, commodity or central bank. You should ensure that You fully understand these risks and You may therefore wish to take legal or financial advice before using the Service or placing any order.

4. Users

4.1. You must set up and maintain an account to use the Service and submit orders (an “Account”). Your eligibility to use the Service will be assessed on a case-by-case basis and may depend on the country where You reside. Enigma reserves the right to refuse to allow You to establish an account or use the Service for any reason at its absolute discretion.

4.2. You represent and warrant that Your use of the Service, and Your entry into each Transaction to which You become a party complies with applicable law and regulation in Your jurisdiction, including but not limited to: (i) legal capacity and any other applicable legal requirements in Your jurisdiction for trading Cryptocurrency and using the Service, (ii) any foreign exchange or regulatory restrictions applicable to Your use of the Service, and (iii) the receipt of any governmental or other consents (or exemptions) that You may need to be obtain prior to Your use of the Service.

4.3. Nothing in these Terms shall be deemed, nor shall cause, You and Enigma to be treated as partners or joint ventures.

5. The Service

5.1. We will process Your orders in relation to Crypto at our absolute discretion. In order to provide the Service, Enigma may rely on data and prices of third party exchanges and/or arrange for orders to be executed with or through an unaffiliated third party (the “Related Services”). You acknowledge and understand that Enigma has no responsibility or liability for the provision of the Related Services, which, whether provided by an affiliate or otherwise, are outside the scope of the Terms. Any authority granted by You to Enigma shall extend to the providers of the Related Services, where applicable.

5.2. The Service includes Crypto exchange services (namely the buying and selling of Crypto). Enigma shall not, nor is it under any obligation to, provide You with any advice in relation to the merits or suitability of any Transaction and You are required to rely on Your own judgement before submitting any order to Us.

6. Orders

6.1. You must submit all orders in accordance with these Terms and/or the Enigma Website if applicable. You acknowledge that We reserve the right to decline any order for any reason (including Your breach of the Terms, inadequate funds in Your Account, or market conditions).

6.2. If, following acceptance but before execution of Your order, an event takes place which, in Our reasonable opinion, means it is no longer reasonable to execute such order (for example regulatory action, change in law or following the request of an applicable third-party exchange), You acknowledge that We may cancel Your order without any liability to You (and update Your account balance accordingly).

6.3. Irrespective of the time at which (or medium by which) You place an order, You agree to pay or receive the price at the time the associated Transaction is executed. You acknowledge and understand that the nature of the Crypto market means that the price at which Your Transaction is executed may vary significantly from the price indicated at the time of Your order. Enigma is not liable for any such price fluctuations. The Service is independent of any exchanges, and We are under no obligation to quote or refer to a particular price or index.

6.4. We will use our reasonable endeavours to act upon any request to cancel or amend an order. You acknowledge and agree that if We are unable to cancel or amend an order, You will be bound by the resultant Transaction. You agree to accept the price in which Transactions are executed as final and binding.

6.5. You acknowledge and understand that all Transactions are entered into on a matched principal basis and Enigma owes You no fiduciary duty in the course of providing the Service. For the avoidance of doubt, nothing in these Terms shall preclude Enigma (or any other party approved by Enigma at Our absolute discretion) from acting as a market maker (“Market Making Activity”). Any terms, conditions, agreements or rules in relation to Market Making Activity shall be provided separately.

7. Funds

7.1. Enigma’s fund settlement process operates on either a same day (T+0) or delayed settlement basis. All purchase orders to buy Crypto must be paid for with an amount of fiat currency equal to the relevant purchase price plus any associated fees transmitted to and received by our relevant account(s). For all sell orders to dispose of Crypto: (i) the associated number of Crypto; and (ii) an amount of fiat currency equal to the associated fee, must be transmitted to and received by our relevant accounts. Failure to conclude that will result in the rejection of future orders. A list of fiat currencies We accept is available on Our website (“Accepted Currency”) or will be communicated to You in due course. If You attempt to make a payment in any currency other than an Accepted Currency, then such payment may be rejected.

7.2. It is Your responsibility to ensure that You hold sufficient cleared funds and Crypto (when applicable) to satisfy the settlement of any Transaction. The Service does not include the provision of margin.

8. Price

8.1. You acknowledge and understand that when You enter into a Transaction via the Service, the fee for the Transaction will be a fee determined by Us, taking into account market conditions. Such price may include a spread (the “Spread”) as against the price available to Us to fill Your order. You acknowledge and understand that the size of the Spread can vary dependent on market conditions.

8.2. You also acknowledge that any third-party fees, such as conversion charges and/or card processing fees, will be passed on to You (“Third Party Fees” and together with the Spread, the “Fees”).

9. Cash/Crypto Transmission

9.1. We will establish and maintain one or more bank accounts or digital wallets for accepted fiat currency or Crypto to be transmitted to us by You prior to an Order being executed. You acknowledge and accept that once transmitted, the funds or Crypto will be held in Our account in our Our name, or in that of a third-party firm, which may be an affiliate of ours (including, without limitation, Makor Securities London Limited) (a “Third Party Account Provider”). You acknowledge and understand that: (i) Your funds or Crypto will therefore be held in the same bank account or digital wallet as Enigma’s own funds or Crypto; (ii) the rules and regulations of the FCA’s Client Asset Sourcebook do not apply to You and/or Your use of the Service and Related Services and therefore You may not benefit from the FCA client money regime for the protection of Your funds or Crypto post transmission to Our account; (iii) the transfer of funds or Crypto from You to Us is solely referable to Your purchase of Crypto or Our purchase of Your Crypto and is not therefore a deposit as defined under the FCA rules.

9.2. In the event of our insolvency, in respect of fiat currency, You will rank as an unsecured creditor of ours for return of such funds if such entitlement arises under the relevant insolvency laws of England; and (vi) in the event of insolvency in relation to the Third Party Account Provider, Enigma may only have an unsecured debt claim against the Third Party Account Provider on Your behalf if such entitlement arises under the relevant insolvency laws of England. Enigma does not accept any liability for losses resulting from its insolvency or the insolvency of a Third-Party Account Provider. Your claim in respect of Crypto if such a claim arises following the insolvency of the Enigma Wallet holder may be limited to an unsecured debt claim, and the Crypto or cash sum You receive in respect of Your Crypto may be insufficient to satisfy Your Account balance.

9.3. In respect of the transfer of the funds, we will aim to credit Your Account with the corresponding amount of Crypto (provided the terms of your Order have been accepted by Us) within 1 business day of receipt of the relevant Order. In respect of withdrawals, we will debit Your Account, when agreed upon delay, with the corresponding amount of fiat currency following Your authorisation. The corresponding funds will then settle to Your bank account within 3 business days. We are not responsible for any delay in the settlement of a Transaction resulting from circumstances beyond our control, including any third-party systems failure.

9.4. You acknowledge and understand that the Crypto Which Enigma supports may change from time to time.

9.5. You will not be entitled to interest in respect of any funds or Crypto held by Us, a Third-Party Account Provider or an Enigma Wallet holder.

9.6. As described above, Your money and Cryptocurrency will not be segregated. Consequently, If We or a Third- Party Account Provider become insolvent, there may be delays in identifying individual assets, increasing the risk of loss.

10. Tax

It is Your sole responsibility to determine whether and to what extent any taxes apply to the Transactions and, if applicable to report and remit the correct payment to the appropriate tax authorities. Enigma does not and will not provide any advice with respect to the tax implications of Your entry into Transactions.

11. Delivery

Following the execution of a Transaction, delivery will occur on Enigma’s records and Your Account balance will be updated accordingly.

12. Security

12.1. You shall be solely responsible for controlling and monitoring the use of the password to Your Account, and shall not permit any person to provide Your password, to any third party. You acknowledge and agree that You shall be bound by any actions taken through the use of Your Account including all orders and the resulting Transactions or other arrangements, as applicable, whether or not such actions were authorised by You. We accept no liability for any loss that You may sustain due to compromise of Your password and/or Account that did not arise directly as a result of Our loss or negligence. If You believe Your Account has been compromised, You should contact us immediately at info@enigma-securities.io.

12.2. By registering an Account, You agree to be bound by and to indemnify and hold Enigma harmless for any and all actions taken by, or omissions of, individuals using an instruction to transfer Crypto to a digital wallet (a “Wallet”).

13. Information Provided

13.1. Any information provided to You via Our website or otherwise does not amount to investment advice. You may use this information for the purposes of the Service only, and shall not disseminate or reproduce the information in any way. Any price quoted or referenced on the website if applicable may be different from the execution price of the Transaction.

13.2. We provide the Service on an “as-is” basis to facilitate the submission of orders and execution of Transactions and any reasonably related activity (the “Permitted Purpose”).

14. Your Warranties

14.1. You hereby represent and warrant that:

14.1.1. You are and have been in compliance with the laws of the United Kingdom and any other jurisdiction that may have an interest in any transaction under this agreement including any anti-money laundering laws or any anti bribery and corruption laws of any other countries or jurisdictions that are applicable to such transactions and will remain in compliance with all such laws for as long as You are party to the Terms;

14.1.2. You have not taken and will not take any actions in furtherance of an offer, payment, promise to pay or authorisation of the payment or giving of, or a request or acceptance of, money, Crypto or anything else of value, to or by any other person (whether or not a government official) while knowing that all or any portion of the money or value offered, given or promised to such other person is for the purpose of securing the improper performance of that person’s function or the misuse of that person’s position; and

14.1.3. In the event that You authorise Enigma to transfer Crypto to a Wallet, whether hosted by You or a third party, such Wallet is beneficially owned by You.

14.2. In connection with the foregoing representations and warranties, You further agree as follows:

14.2.1. You shall indemnify, defend and hold Enigma harmless for any and all claims, losses or damages arising from or related to any breach of the foregoing representations and warranties; and

14.2.2. Enigma may terminate Your Account immediately upon written notice in the event that it concludes, in its reasonable opinion, that You have materially breached any representation or warranty under this Agreement (following applicable notice, grace and cure periods).

15. No Warranty

15.1. The Services are provided on an “as is” and “as available” basis. To the maximum extent permitted by applicable law, we specifically disclaim any implied warranties of title, merchantability, fitness for a particular purpose and/or non-infringement. We do not make any representations or warranties that access to any part of the Services will be uninterrupted or error-free.

15.2. Neither Enigma nor its affiliates gives any express or implied warranties or representations (including warranties of satisfactory quality and fitness) relating to: (i) any third party systems or protocols used to support the Service; (ii) the long-term value of any Crypto; (iii) the liquidity of any Crypto market or exchange; (iv) the accuracy or timeliness of historical Crypto price data made available to You by one of Our brokers; (v) the amount of time needed to execute a Transaction following an order (which is dependent on factors outside of Our control); (vi) the immutability or security of blockchain or underlying software underpinning any Crypto or any digital wallet (including the Enigma Wallet) associated with the Service (together, the “Technology”); or (vii) the freedom of the Technology from any errors, viruses or disruption.

16. Limitation of Liability

Enigma shall not be liable to You or any person for any losses, liabilities, damages, claims, costs or expenses arising from: (i) the performance of any Related Services; (ii) any delay in the execution of a Transaction; or (iii) the occurrence of any event describe in Clause 17, above (except where such an event was caused by Our negligence, fraud or wilful default). Without limitation to the above, in no event shall Enigma be liable for any amount greater than the value of the Crypto and fiat currency that is credited to, (or where applicable, ought to have been credited to, Your Account) at the time of any alleged loss or claim.

17. Termination

We may, at Our sole discretion: (i) close Your Account for any reason by giving seven (7) days’ notice or (ii) with or without prior notice suspend or terminate the Service (or any part of the Service) without liability to You. If Your Account is in credit on the date of termination (howsoever occurring), We will aim to transfer the funds and/or Crypto to Your bank account or Crypto wallet (as applicable) within 3 working days minus any Fees or payments that are due to Us.

18. Supplemental Terms

If You have agreed to use Connectivity or a Trading Platform (both as defined in Appendix 1), the terms of Appendix 1 will also apply.

19. Governing Law

These Terms are governed by and construed in accordance with the law of England and Wales. The courts of England and Wales will have exclusive jurisdiction to adjudicate any dispute arising under or in connection with these Terms.

Appendix 1

Electronic Connectivity and Trading Platform Facilities

A1 Access and use: We may permit You to place transaction orders in cryptocurrencies and derivatives thereof (including foreign exchange) with us by direct electronic communication to us through an electronic system (“Connectivity”). We may also provide You with electronic access to a facility to enable You to execute transactions electronically through us on execution venues that we (or an affiliated entity) are a member or participant and which we may notify to You (the “Trading Platform”) which includes all related software and accompanying documentation. Your right to use Connectivity or the Trading Platform and any financial data, market and business information provided on or through Connectivity at the Trading Platform (“Information”) is limited to use for the purpose of receiving and viewing Information for the transmission and execution of transaction orders. We may amend the terms of this Appendix 1 with respect to the addition of a financial instrument or an execution issue to our Connectivity or Trading Platform services.

A.2 Central counterparty, clearing agent or prime broker: The terms of this paragraph A.2. apply to cryptocurrency derivatives. We may provide Connectivity to the Trading Platform for the execution of transactions on an exchange, multilateral trading facility or other regulated market or trading platform (where the transaction is cleared through a central counterparty) for execution of transactions. We may make Your access to and use of Connectivity to the Trading Platform for execution of such transactions conditional upon Your execution of a give-up agreement on terms approved by us with (i) a clearing member and/or an execution broker member of the relevant exchange, multilateral trading facility or regulated market; or (ii) or a prime broker participant or central-counterparty for the relevant multilateral trading facility, regulated market or trading platform. We may pay a portion of the fees or charges we receive from You for our services to a central counterparty or operator of an exchange, multilateral trading facility, other regulated market or trading platform.

A.3 Licence: Connectivity and the Trading Platform are owned by us (and/or an affiliated entity) or third parties that licence their use to us (and/or an affiliated entity). You acknowledge and agree that Connectivity and the Trading Platform are the exclusive property of ours and/or the Licensors, and that the Information is the exclusive property of ours and/or the Licensors or such licensor’s third party vendors or their suppliers, and we the Licensor and such third party vendors and their suppliers retain all proprietary right, title, and interest, including, without limitation, copyright, in the Information. We grant You a personal, limited, revocable, non-exclusive, non-transferable licence to access and use Connectivity and the Trading Platform under the terms of this Appendix 1. You shall not copy, license, sell, transfer, make available Connectivity or the Trading Platform or information to any other person. You shall not remove or alter any copyright notice or other proprietary or restrictive notice contained in Connectivity, the Trading Platform or Information.

A.4 Access responsibility: You are responsible for obtaining and maintaining, at Your cost, the necessary computer equipment and internet access required to enable You to access and use the Connectivity, the Trading Platform and Information. You are responsible for any equipment, software or internet access provided by a third party which You require to access and use Connectivity and the Trading Platform. You acknowledge and agree that we (and affiliated entities) are not responsible for any Connectivity or Trading Platform interface applications with third parties such as execution venues, information vendors and other investment firms such as derivative exchange execution and clearing brokers.

A.5 Information changes: Certain Information may be provided by third parties. If any of the Information ceases to be furnished by any third party vendors in a manner which is compatible with Connectivity or the Trading Platform, we may remove as much Information as is affected, without advance notice, without incurring any liability to You, and without any change to any of Your payment or other obligations. Further, we may modify, amend, alter, update, supplement or replace Connectivity or the Trading Platform software (which, among other things, determines the functionality and appearance of some or all of the Connectivity or Trading Platform features) from time to time, in whole or in part, without any notice (except for material changes to functionality as reasonably practical), without incurring any liability to You, and without any change to any of Your payment or other obligations. You acknowledge and agree that Your use of Connectivity or the Trading Platform after any modification, amendment, alteration, update, supplement or replacement shall constitute Your acceptance of such modification, amendment, alteration, update, supplement or replacement.

A.6 Security: You shall keep any user name, password or access code (referred to in this Appendix 1 as “User Codes“) provided to You for Connectivity or access to the Trading Platform confidential and secure. You shall be responsible for the safeguarding and security of Your User Codes. You shall be solely responsible for all orders and transactions arising from any person’s Connectivity use or access to the Trading Platform using Your User Codes notwithstanding any lack of our access controls or the failure of any access controls we may have implemented. You shall notify us immediately and in writing in the event of (i) any loss or theft of part or all of the User Codes; or (ii) any actual or suspected unauthorised use of the User Codes; or (iii) any actual or suspected breach of security or confidentiality of the User Codes. You shall maintain with respect to Connectivity and the Trading Platform adequate systems and controls to ensure that (i) use is only by authorised personnel; (ii) order accuracy, order size, compliance with credit and order limits is checked and validated; and (iii) order direction, order duplication and order retransmission errors do not occur. You will ensure that no computer viruses, worms or similar items are introduced through Connectivity to our computer systems and networks or to the Trading Platform. You will be responsible for the installation and proper use of any virus detection software which we may require.

A.7 System risk: Connectivity the Trading Platform and Information is provided “as is”. The entire risk as to the quality and performance of Connectivity or the Trading Platform or Information and any third party related goods and services is with You. We (or affiliated entities) make no warranties (express or implied), representations, or guarantees as to merchantability, fitness for any particular purpose, performance, service continuity, absence of interruptions or errors or otherwise with respect to Connectivity or the Trading Platform or Information. Neither we nor our affiliated entities nor licensors, third party vendors or suppliers of Connectivity, the Trading Platform or Information, shall have any obligation or liability to maintain Connectivity, the Trading Platform or Information or to supply any corrections, updates or releases. We reserve the right, in our absolute discretion, and without prior notice, to reject cancel or refuse to display or seek execution of any order for any reason. We may at any time and in our absolute discretion impose and vary limits and conditions upon the placement of orders using Connectivity or the Trading Platform including limits on size, order types and execution venues and conditions concerning collateral requirements.

A.8 No execution guarantee: You acknowledge and agree that Connectivity or Trading Platform order entry does not guarantee order execution. We will not be responsible for any execution of orders that are not received by reason of Connectivity or Trading Platform malfunction or otherwise. When You use Connectivity or the Trading Platform, unless You have received an electronic order acknowledgement, Your order will be deemed not to have been received. In the event You dispute or deny knowledge of any order which has been electronically acknowledged we will in either case be entitled immediately to liquidate or otherwise offset the position in the relevant investment or financial instrument without prejudice to such other rights we may have under this Appendix 1. Execution venues may reject or cancel Your transaction orders for which we accept no responsibility. You acknowledge that: (1) orders may be delayed for many reasons and the price of a security at the time of order entry may not be the same as the price of such security at the time such order is executed; and (2) cancellation of orders may not be possible prior to execution, even if the cancellation order is received prior to the time at which the order was to be executed.

A.9 System compliance training: You shall provide Your employees that use the Connectivity or Trading Platform with adequate information and training upon (i) the terms of this Appendix 1; and (ii) execution venue rules which we or our affiliated entities are subject and which You must also comply to ensure there is no breach of such rules by us or an affiliated entity. With respect to Connectivity or Trading Platform use for transactions on regulated markets, multilateral trading facilities or exchanges You shall neither engage in, nor facilitate, nor fail to take reasonable steps to prevent:

    • any action or any course of conduct that has the effect, or may be expected to have the effect, of artificially and/or abnormally moving the price or value of any cryptocurrency, or securities admitted to the regulated market or exchange, or any instrument underlying such cryptocurrency or securities or the level of any index of which such cryptocurrency or securities are a component;

    • entering artificial orders or otherwise entering into or causing any artificial transaction;

    • reporting a fictitious transaction or any other false data to the regulated market, exchange or other competent authority or causing such data to be input into any of their systems;

    • any action or any course of conduct that creates or may reasonably be expected to create any false or misleading impression as to the market in, or price or value of, any cryptocurrency, securities or related financial instruments;

    • any other action or any other course of conduct that may damage the integrity and the transparency of the regulated market or exchange; or

    • agreeing or acting in concert with, or providing any assistance to, any person with a view to or in connection with any action or course of conduct referred to in paragraphs (a) to (f) inclusive.

A.10 System misuse: You shall not use the Connectivity or Trading Platform for orders or transactions for or in connection with any activity which may constitute a fraudulent or illegal purpose or market abuse or otherwise use the Connectivity or Trading Platform in contravention of any applicable law and regulatory provisions. For the purposed of this Appendix 1 “market abuse” means behaviour in relation to investments which involves insider dealing, market manipulation or market distortion in breach of applicable laws or regulatory provisions. You undertake to familiarise Yourself and comply with any applicable law and regulatory provisions concerning the short sale of securities if You seek to execute a short sale transaction and You will ensure that Your use of the Connectivity or the Trading Platform will not result in a breach by us (or any affiliated entity) of any applicable law and regulatory provisions concerning the short sale of securities or any terms of this Appendix 1 concerning short sale orders or transactions.

A.11 Order entry error: If an order entry is made using the Connectivity or Trading Platform by mistake or does not reflect the intended transaction (an “erroneous order”) then You shall be responsible for amending or cancelling such orders as necessary and for closing any resultant positions subject to our rights in this Appendix 1.

A.12 Pre-execution controls: We reserve the right to limit Your use of Connectivity and the Trading Platform and apply pre-execution trading controls as may be appropriate to preserve compliance with Applicable Regulations or this Appendix 1 or any other trading limits or redirection which may be notified to You. With respect to use of Connectivity or the Trading Platform we shall have the right to reject or cancel orders or enter off-setting orders or restrict Your ability to enter further orders in the event You act in breach of the terms concerning Connectivity or the Trading Platform in this Appendix 1. Connectivity or the Trading Platform, Your access thereto and any information, service feature or function provided by means of Connectivity or the Trading Platform may be changed, limited, suspended, discontinued or terminated by us at any time without notice or liability.

A.13 Disclaimer: Neither ourselves nor any affiliated entity (nor any director, officer or employee thereof) shall have any liability to You or any third party for any losses (including loss of profits), expenses, costs, claims, damages (including punitive, special or exemplary damages) or for any account of profits or other restitutionary relief of any kind whatsoever arising from or incidental to the provision of access to or use of Connectivity or the Trading Platform or Information (including any failure to provide access to Connectivity or the Trading Platform or any operational failure of Connectivity or the Trading Platform or the introduction of any viruses, worms or similar items into Your computer systems and networks through Connectivity or the Trading Platform or any software we provide).

A.14 Indemnity: You shall indemnify and hold us and any affiliated entity harmless (and our respective employees, officers, directors and agents) from and against any and all claims, demands, legal actions or proceedings and all liabilities, damages, losses, expenses and costs (including legal and accounting fees and expenses) (collectively “Losses“) arising out of or incidental to Your use of, or access to, Connectivity or the Trading Platform or any associated third party services or equipment provided under the terms of this Appendix 1 except to the extent that any such Losses, as finally determined by a Court of competent jurisdiction, were caused solely and directly by dishonest or wilful misconduct of us or any affiliated entity.

A.15 Third party software: To the extent that You are using Connectivity or the Trading Platform in conjunction with a third party software (including, but not limited to, an algorithm), we expressly disclaim liability for any Losses arising from such third party software. This disclaimer is without prejudice to any other provision of the Terms or Appendix 1.