This written explanation is a document requiring user agreement in accordance with Articles 16 and 17 of the Cabinet Office Ordinance on Virtual Currency Exchange Services as well as self-imposed regulations from the Japan Virtual Currency Exchange Association.
The virtual currencies handled by bitFlyer, Inc. (hereafter “the Company”) are different from the fiat currencies of Japan and other countries. The value of virtual currency is not guaranteed by an established party.
9-7-1 Akasaka, Minato-ku, Tokyo 107-6208
Registered Virtual Currency Exchange Operator (Registration No. 00003, issued by the Director of the Kanto Local Finance Bureau)
See About the virtual currencies we handle for further information.
Please ensure that you have thoroughly studied the risks and the structure of trading in advance and trade at your own responsibility.
The following are examples of risks that may lead to potential losses. For more information on risks and details on other risks, please read the risks of Spot Trading, Lightning FX, and Lightning Futures.
Virtual currency exchange transactions carry the possibility of loss due to price fluctuations in the virtual currency of transaction as well as other price fluctuations. Note that unexpected or specific events, including, but not limited to, changes to the balance of supply and/or demand, changing prices of commodities, fiat currencies, or other markets, natural disasters, wars; changes to laws, regulations, statutes, and governments, and changes to virtual currencies may cause drastic price fluctuations of virtual currencies. The price may even fall to zero. For bitFlyer Lightning FX and Lightning Futures, as the transaction amount is proportionately greater than the margin deposited by the registered user for the transaction, with the potential for losses to be amplified proportionally when using leverage, the amount of loss may exceed the margin pledged.
While leverage trading may result in obtaining large profits, it also carries the risk of incurring large losses. Since trades on Lightning FX and Lightning Futures are for an amount that is comparatively larger than the amount that the registered user places into their margin deposit, it is possible to incur large losses proportional to the leverage rate used, which may exceed the amount in the margin deposit. When performing leveraged trades, supplemental margin deposits may be required in advance. Leverage trades are processed using the funds in the margin account. Unless the margin account becomes negative, the customer must manually transfer funds from their spot account to their margin account.
For bitFlyer Lightning FX and Lightning Futures, the Company has established sell out rules where countersales automatically occur when losses exceed a predetermined rate, but there is a possibility that fluctuations in virtual currency prices, etc., may cause the transaction to exceed the amount in the customer’s margin account.
In situations such as when system maintenance is underway, virtual currency exchange transactions and their associated requests can not be carried out. During these times, there is the risk of market prices fluctuating significantly. In addition, during these periods, some requests related to virtual currency exchange transactions cannot be accepted.
Virtual currencies are electronically recorded and may be lost during transfer across the network. Virtual currency transactions (transaction confirmation on blockchains) will be held for a certain period of time until an adequate amount of trade confirmations have been received. There is also a risk of losses being incurred if any serious problems occur during the transfer process. There are also risks of virtual currency being lost or prices decreasing due to cyber attacks, etc.
As a result of causes that include, but are not limited to, damage to the telecommunications networks, systems, and equipment used by the Company and customers, damage to a connection, natural disasters such as earthquakes, lightning, and fires, and cyber attacks, etc., the electronic trading system may be rendered unusable temporarily, and transmission of customer orders may be delayed or fail to process, resulting in invalidation or completion in an unintended manner. Note that in the event of electronic trading system failure, all or part of the Service, including the execution of trades may be suspended or restricted by the Company.
Login or other information (including, but is not limited to, email addresses, login IDs, API keys, passwords, API secrets, private keys, authentication codes, personal identification numbers (PIN), and the same when referred to by other names; collectively “login information”) used to electronically authenticate on the electronic trading system that it is stolen, intercepted, or otherwise leaked, may result in damages or losses to customers in the event that it is used maliciously by a third party.
There is a risk that the Company will be unable to continue doing business due to reasons such as changes in the external environment. In the unlikely event that the Company is unable to continue doing business, bankruptcy procedures (which include dealing with customer assets) will be carried out in accordance with applicable laws (the Bankruptcy Act, the Companies Act, the Corporate Reorganization Act, the Civil Rehabilitation Act, etc.). The fiat currency and virtual currencies deposited to us by the Company’s customers are stored separately and managed separately from the Company’s own assets.
The Company stores and manages monetary deposits in a bank account named “bitFlyer, Inc. Customer Account” (Kabushiki Gaisha Bittofuraiyaa Kokyaku Azukari Guchi). The Company's own monetary assets are stored and managed in separate accounts. The following banks are used for deposits.
Please reference “Methods for Managing User Assets” below.
If users suffer virtual currency losses as a result of a cyberattack that the company is deemed responsible for, the company shall reimburse the losses in accordance with laws and ordinances. When compensating losses, the company shall respond to specific cases of substantial losses as soon as possible. In order to appropriately return the losses suffered by the users at the time of compensation, the method of compensation (including, but not limited to, compensation in fiat or virtual currency) shall be determined based on the amount of virtual currency lost, difficulties in supply, price movement after the loss, and other relevant factors.
The Company manages its data so that virtual currencies held by us and virtual currencies held by each customer can be distinguished immediately. Furthermore, regarding the distinction between the Company’s wallets for storing virtual currencies and customers’ wallets for storing virtual currencies, even on the blockchains, the Company's assets and customers’ virtual currencies are managed separately in accordance with the Company's policy.
Additionally, the majority of our customers’ assets for each virtual currency the Company lists are stored in separately managed cold wallets.The Company also manages a portion of virtual currency with multi-sig.
Cold wallets are a method of storing virtual currency. A cold wallet differs from other wallets by storing virtual currency in an environment that is not connected to the Internet. The Company’s cold wallets are protected by multiple physical security measures and a 24-hour surveillance system for extra protection. The management of each virtual currency handled in cold wallets is a standard prescribed by the Company. In addition to cold wallets, private keys are always encrypted so that even if a private key were to be leaked, it would be impossible to be used by a third party.
Multisig technology requires multiple private keys to authorize remittance. Multisig technology can be used to create highly secure wallets. With the proper configuration of multisig, even if a private key, the most important piece of data, were to be leaked, it would still be impossible to move the corresponding virtual currency without the other required key(s). In general, it is significantly difficult for an attacker to penetrate two or more highly secure platforms at the same time.
The Company shall maintain the necessary equipment, and sufficient personnel to operate the equipment, for moving the fiat and virtual currencies that are user assets. Additionally, the Company shall establish strict internal regulations on the procedures involving private keys required to move virtual currency.
*Although Lightning Futures (leveraged trades settled through net settlement) is not covered by the Payment Services Act, the Company voluntarily carries out segregated management for these trades as if it were required in the Payment Services Act.
Fees and other charges to be paid by registered users are as set forth in the Fees list.
The necessary fees are purchase and sales fees, Japanese yen withdrawal fees, bank transfer fees (specified by each financial institution), Quick Deposit fees, virtual currency withdrawal fees, and other fees. For transactions on Lightning FX, there are also margins, swap points, and/or SFD. Transactions on Lightning Futures also have margins and/or swap points.
For more information on transactions and services, please contact us here.
The Tokyo Bar Association's Dispute Resolution Center, the Dai-ichi Tokyo Bar Association's Arbitration Center, and the Daini Tokyo Bar Association's Arbitration and Mediation Center are all available for resolving disputes between the Company and customers of the Company. he Japan Virtual Currency Exchange Association’s complaint form may also be used.
Japan Virtual Currency Exchange Association
Parties who wish to use the Company's services as they relate to virtual currency exchange must register for these services. Once user registration is complete, it remains valid until the date on which that user’s registration is cancelled. If you would like to have your user registration cancelled, please notify us using the inquiry form found on the Company's website. There are no contract cancellation fees.
When depositing JPY to be used for the Company’s services, please make deposits by making a bank transfer to the account in your name at the financial institution designated by the Company. When depositing virtual currency to be used for the Company’s services, please transfer it to the virtual currency address designated by the Company. For deposits of either JPY or virtual currency, the amount is not deposited at the point in time at which the customer has finished the transfer procedure, but rather at the point in time at which the Company has confirmed and received the amount.
To confirm the status of your deposited assets or your trading history, log in and view “My Assets” or the “Trade Report.”
It is the customer’s own responsibility to set, manage, and store their login information. Please do not use the same password on other services or passwords that are easy to guess. The Company requires two-factor authorization for when “sending virtual currency or using bitWire”, but we sincerely recommend also enabling two-factor authentication for “when logging in”, “registering an external virtual currency address”, and “making JPY withdrawals.” You can change your security settings from the “Settings” menu after logging in.
The upper limits for virtual currency and JPY deposits vary by account class. More information is available here.
This document was originally written in Japanese and has been translated to English. Should there be any discrepancies, the Japanese text shall take precedence.