The Rock Trading Terms of Service

Terms and Conditions

Use of the Website and The Rock Trading Services


1. INTRODUCTION

1. Access to and use of the Website www.therocktrading.com ("Website") are activities governed by these Terms and Conditions of Use ("TEC"). Access, use and any other interaction with this Website imply the reading, knowledge and acceptance of this TEC by the user.

2. Users acknowledge that proof of participation in the services provided by The Rock Trading, through the use of the Website, is the computer recording of the confirmation of the clicks of acceptance of these TECs, the Anti-Money Laundering Policy, the Risk Policy and the Privacy Policy.

3. The Website, with the domain https://therocktrading.com, any second-level domains, accessible via each page of the Website and the contents published therein, except as specified in art. 14, as well as any API (Application Programming Interface) to access specific contents of the Website or widgets containing data from the Website itself are the property of The Rock Trading S.r.l., with registered office in Galleria del Corso, 2, 20122, Milan, Tax Number - VAT Number: IT-10120840961, registered in the Milan Companies Register No. 2507359 ("TRT").

4. The use of the Website, including, but not limited to, registration with the Website, opening an account, accessing the private area, sending material to the Website and using any of the services offered through the Website, qualifies the visitor as a User of the Website and implies full and unconditional acceptance of these TECs.

5. These TECs, the AML Policy, the Risk Policy, the Privacy Policy, the FAQ represent the legal disclaimer of the Website and the Contract Regulation governing the relationship between the User and TRT. In the event of conflicting provisions between these TECs and any of the above documents, the provisions of the latter shall prevail.

6. For any requests for assistance with the Website or the use of the services, the User may visit the "Support" area of the Website and access the "ticketing" system. Before opening a new ticket, the User is invited to verify that the FAQ does not already answer his/her question.

7. Users undertake to inform TRT of unauthorized or non-compliant use of the Website, even in breach of these TECs, by sending an e-mail to documents@therocktrading.com, specifying the data that enables the identification of the content of the unauthorized or non-compliant Website, or of the party who used the Website in an unauthorized or non-compliant manner.

2. INTELLECTUAL PROPERTY RIGHTS

1. The contents of the Site, by way of example, the platform, the DAAs (Data as a Services: web service that makes data available to the User in different formats and for different applications), formulae, source code, images, photos, sounds and videos, documents, drawings, images, logos and any other material, in any format, published on the Website, including menus, web pages, the graphics, colors, schemes, tools, fonts and design, diagrams, layouts, methods, processes, functions and software which are part of the Website are protected by copyright and any other intellectual property right of TRT and other rightholders. The complete or partial representation of the Website and its contents in any form is forbidden without prior written consent by TRT.

2. TRT is entitled to authorize or forbid the direct or indirect, temporary or permanent representation, in any way or format and shape, in whole or in part, of the Website and content thereof.

3. The User undertakes to comply with the copyright of those who publish contents on the Website. Furthermore, the User is not authorized to use, in any way and form, the contents of the Website and any single work protected by copyright and any other intellectual property right. By way of example and not limited to, the user may not alter or, in any other way, modify the contents and copyrighted works without the consent of TRT and, where necessary, of each author of the works published on the Website.

3. TRADEMARKS AND DOMAIN NAMES

1. The name "The Rock Trading" is a trademark currently under registration owned by TRT, which, together with the domain name and all the elements and contents referred to in Article 2, is covered by national legislation and international agreements on copyright and intellectual property.

2. TRT is the sole owner of the "TRT" logos and trademarks and any other trademark covering the words "the rock trading", including the domain name "therocktrading.com".

3. The User is not authorized, without prior consent of TRT, to use these trademarks to identify products or services, even if different from TRT's ones.

4. Any use of trademarks not in compliance with the law, as not authorized, is forbidden. Furthermore, it is forbidden to use the trademarks and any other sign on the Website to take unfair advantage from this distinctive feature or the reputation of these trademarks or otherwise to the detriment of those trademarks and the owners thereof.

4. SCOPE AND COST OF SERVICE

1. TRT provides, mainly, the services of a virtual currency service provider, offering Users, on a professional basis, services aimed at using, exchanging, storing and converting virtual currencies from or into legal tender currencies. In particular, TRT provides blockchain services to Users: an internet platform enabling the purchase and sale of tokens or any other existing virtual or mathematical currency, and the conversion of virtual or cryptographic currencies to each other or to legal tender currencies and vice versa.

2. "Virtual currencies" means digital value representation, not issued by a central bank or public authority, not necessarily linked to legal tender currency, used as a means of exchange to purchase goods and services and transferred, stored and electronically negotiated. Virtual currencies available for purchase, sale or conversion on the Website are only those supported by the Website and communicated to the User by TRT in a dedicated section of the Website; by way of example but not limited to, https://www.therocktrading.com/en/exchange/currency, which will be regularly updated to include new virtual currencies and delete those no longer processed.

3. TRT, as fee for the services provided through the Website, will charge the user fees according to the terms and procedures specified in the relevant section of the Website "Fees".

4. While using the services under these TECs, the User acknowledges and agrees that: (a) TRT does not act as its representative, nominee, broker, intermediary, agent, financial advisor, investment expert or trustee; and (b) the information provided through the Website does not represent advice or recommendations on investments, nor on financial instruments or products.

5. Through the Website, TRT does not offer financial instruments or financial products, nor does it manage User funds, nor provide investment services, payment services, nor any other service or activity the provision of which is limited by current Italian legislation to persons authorised by the Financial Market Supervisory Authority, or by other authorities empowered to issue such authorizations or in any case to supervise such activities and services. By way of example, it should be noted that TRT does not provide, through its platform, any activity of management of financial markets, multilateral or organized trading systems, with the specific exclusion of any activity and/or service involving the trading or exchange of financial instruments (as defined by Legislative Decree 58/98 Consolidated Law on Finance, Annex 1).

6. No information, analysis or other material on the Website represents an opportunity to sell or purchase financial products and/or financial instruments, nor does it constitute a form of investment advice, nor is it suitable to provide grounds for any investment decision.

5. WEBSITE SERVICES: FEATURES AND RESTRICTIONS ON USE

1. Website services are subject to Italian and European law, except for the provision of hosting services or other services necessary to use the Website, provided by third parties, to which conditions of use relating to these services apply.

2. The User may access the Website exclusively for personal or business purposes connected to one of the activities provided by TRT pursuant to art. 4 and to the extent specified in these TECs. If the user, through the Website or other conduct, intentionally or accidentally jeopardizes the functionality of the Website, TRT shall have the right to take all necessary measures to protect the Website and its systems.

3. The use of the services of the Website, due to its very nature, is based on the need to carry out legal transactions, enter into agreements and purchase and sale transactions electronically. Users hereby undertake to be fully aware that acceptance by electronic means shall represent a valid and binding consent. Any expressions of consent or acknowledgement relating to TRT notifications of termination, policy and contract changes, and so on, fall under the same regime.

4. The Website is intended for use by natural persons over 18 years old under Italian law or by non-physical persons (entities) duly incorporated, resident or with registered office outside countries not included in the scope of the provisions specified below.

5. By accessing the Website and opening an account, the User represents and warrants: (i) to accept these TECs, (ii) to be at least 18 years old, (iii) to be in full capacity to accept these TECs, (iv) to use the Website for transactions involving only the purchase, sale or exchange of virtual currencies and legal tender currencies, (v) to have read and accepted Risk Policy, Privacy Policy and Anti-Money Laundering Policy, and (vi) to be a resident natural person or representative of a legal person other than an individual with registered office in Italy or in any country not excluded from the services offered on the Website, as indicated below.

6. The Website, TRT services and the use thereof are offered and may be used by natural or legal persons resident or having registered office within the countries covered by the Single Euro Payment Area (SEPA) and the list of countries, extra-SEPA, updated from time to time in the FAQ section. The Client represents he/she is aware and accepts that in the event of misleading statements or in any case of conduct in breach of the aforementioned restrictions on use of the Website and services: (i) TRT shall interrupt the services provided, and shall suspend all operations, notifying accordingly the relevant authorities.

7. The User of the Site is not permitted to:
  • (a) use the Website in a way that causes or may cause damage to the same Website or may compromise its performance, availability or accessibility;
  • (b) use the Website in any unlawful, illegal, fraudulent or harmful manner or in connection with any purpose or activity whatsoever considered unlawful, illegal or fraudulent;
  • (c) use the Website to copy, store, host, transmit, send, use, publish or distribute any material consisting of (or linked to) spyware, computer viruses, Trojan horses, worms, keystroke loggers, rootkits or any other malicious software;
  • (d) carry out any systematic or automated data collection activity (including, inter alia, scraping, extraction and collection of data) on or in relation to the Site without the express written consent of TRT, except for collection activities provided for by the use of the API;
  • (e) access or otherwise interact with the Site using robots, spiders or other automated tools, except for search engine indexing, or with the express written consent of TRT, or if related to API use;
  • (f) circumvent, or attempt to circumvent, any restrictions on access to the Website;
  • (g) alter, modify or distribute to third parties any material contained in the Website.
8. Notwithstanding the above, users are allowed to forward any TRT newsletters to third parties in electronic format.

9. TRT is entitled to restrict access to certain areas or to the entire Website at its discretion. In addition, TRT is entitled, at any time, to modify the procedures and the functioning of the Site, to introduce new methods of use, new conditions of use and additional obligations relating to the use of services. Such changes will be communicated to the email address or through the User account and may also involve an amendment to TECs, pursuant to art. 15.

6. WEBSITE REGISTRATION

1. An account may be registered on the Website by filling in and submitting the registration form on the Website; to access the services of the Website, and in particular the activity of converting virtual currencies from or into legal tender currencies, it is also necessary to complete the verification process described in Article 8 and in the Anti-Money Laundering policy.

2. The User guarantees that all information provided to TRT through or in relation to the Website is true, accurate, updated and complete, assuming the resulting civil and/or criminal liability should it be ascertained that the information provided was incorrect or - indeed - misleading.

3. TRT is entitled to request the user, at any time and at its sole discretion, to provide further information to allow the correct operation and provision of services.

4. By registering to the Website, the User agrees that all TRT communications are transmitted to the User by e-mail, messaging services to the details provided during registration (e-mail, tel, etc.) or by means of specific and targeted alerts.

5. The User agrees not to use any account other than his/her own, nor to access the account of others, nor to help others to obtain unauthorized access.

6. The User agrees not to allow third parties to use his/her account to access the Website.

7. The creation or misuse of accounts by a User will result in the immediate suspension and subsequent closure of all accounts linked to them, as well as the closure of all purchase or sale orders that may still be pending.

7. USE OF WEBSITE SERVICES

1. Use of the Website services requires the use of suitable devices owned by the user and access to an Internet connection.

2. Before accessing the services of the Website, the User is recommended to read and understand the risk policy.

3. In order to place orders to buy or sell virtual currencies and legal tender currencies, the User, registered on the Website, shall transfer virtual currencies or legal tender currencies ("Asset availability") on a dedicated account, the accessing, using and managing methods are detailed and illustrated in a specific section of the Website. In order to carry out this activity, TRT also makes use of third parties authorized to provide banking or payment services, subject to supervision by the relevant sector authority.

4. Availabilities transferred by the user to the account specified by TRT are used exclusively for the purchase and sale of virtual or legal tender currencies. On the Website, the User may view the balance of Availabilities and place an order to make transactions within the blockchain. The Site is not to be considered a virtual wallet.

5. To purchase or sell virtual currencies, the User must place an order (purchase or sale) with TRT. To this end, the User, registered on the Website, must follow the instructions provided on the order setting page, indicating at least the type of transaction (purchase/sale) and the amount of the same.

6. Availabilities on the account at the Website may only be withdrawn by transfer to the same account from which were sent at the time of the first deposit of virtual currencies or legal tender currencies.

7. The User is solely responsible for the use of all elements and services of the Website. TRT, in particular, is not responsible for the origin of virtual currencies uploaded to user accounts through the Website.

8. AML REQUIREMENTS

1. When registering on the Website, the User is required to provide any necessary information and/or documents that TRT deems, in its sole discretion, to be suitable to maintain compliance with any law, regulation and internal policy (see the Anti-Money Laundering Policy adopted by TRT).

2. During the account verification process, the User must provide all documents that will be required. In particular, by registering an account on the Website, the user agrees to provide TRT, or another party delegated to carry out the anti-money laundering obligations imposed by law on behalf of TRT, with updated, accurate and complete information as required by the registration process, as well as to keep this information updated.

3. In the event of anomalous or not completely transparent operations on the User's account, TRT may request further information from the User, including but not limited to document authentication, and may also freeze all transactions pending the performance of the appropriate checks on the account.

4. TRT is entitled to block, suspend and close accounts of Users who have not been properly verified, notwithstanding any useful efforts by TRT to contact the User and urge the completion of the due verification process.

5. Documents, data, photos and other information material collected during the registration and verification of an account are subject to the retention requirement that TRT has to comply with under the anti-money laundering regulations, also using the services offered by a third party provider.

6. TRT applies regular checks on user accounts also through the request to provide information on the origin of the Assets if and when expressed or converted into virtual currency or legal tender currency. In addition, TRT is entitled to block or freeze any User account, at its discretion and without prior notice, in case of suspected illegal origin of the Assets.

9. ACCOUNT SECURITY

1. The User must keep the password to access the Site confidential and take all reasonable and appropriate measures to keep safe: (i) any device associated with the e-mail address at which he/she registered for his/her account, (ii) any private keys and (iii) the user name, password and any other credential for access or identification relating to his/her account on the Website.

2. The User is responsible for maintaining the confidentiality of the information in his/her account, including passwords and transactions that are published on the account, and should take all reasonable measures to protect his/her account and the Assets and other funds available on the Website, by activating all security procedures available on the Website. Furthermore, the User is liable for any harmful consequence or damage that may arise for TRT or for third parties as a result of incorrect use, loss, theft of such information.

3. The user undertakes to inform TRT immediately in writing to the following email address: legal@therocktrading.com, should he/she become aware of any unauthorized use of his/her account or should he/she become aware of any disclosure of his/her password or other information that could lead to an unauthorized use of his/her account. The user is also obliged to notify TRT in writing immediately regarding any other security breaches.

4. The User is responsible for any activity resulting from any error or negligence in keeping confidential his/her password and other personal information related to his/her account. The User will be held responsible for any loss or damage resulting from any errors or negligence.

5. Should the User breach any of the foregoing provisions, TRT may suspend and subsequently close the account and the User shall be liable for any losses incurred by TRT or any other user of the Website.

10. CLOSURE, SUSPENSION AND BLOCKING OF AN ACCOUNT

1. Without prejudice to what is specified in other clauses of these TECs, TRT may at any time, at its own discretion, without prior notice or explanation, including, without limitation, in the event of attempts to obtain unauthorised access to the Website, for other security reasons or for breaches of TECs or other documents referred to therein, may:
  • suspend, restrict, terminate or close a User's account or the services to which he/she has access;
  • freeze an account, block the use of deposits and the functions of the Website, also on the recommendation of the judicial or tax authorities;
  • terminate the account, without prejudice to the possibility, if permitted by law, for the User to transfer his or her Assets to other accounts;
  • deny access to the Website and/or a User account;
  • take any technical measures or legal action to prevent the user held responsible for breaches from further using the Website and services.

11. DORMANT ACCOUNT

1. In the event that the User's account is dormant for a period of at least 12 months and Assets are available on the account, TRT will require the User to communicate the bank account details in the User's name to which the Assets are to be transferred, once converted, should they not be, into legal tender currency. If the User has not provided TRT with the destination details of the assets, which may have been converted into legal tender currency, despite TRT's reminders and after 30 days from the first notification, TRT shall arrange for the transfer of the available assets by means of the so-called "Real offer". In this case, TRT shall convert the virtual currencies into legal tender currencies independently, if necessary, and in accordance with the terms and conditions set out in the relevant legislation, shall formalize the offer of the sums to the User through a notary public or other public official, and shall then, in the event of failure to accept the offer, deposit the amounts with another bank and notify the User of the deposit at the same time. In cases where this solution is difficult to apply, TRT will seek alternative solutions to establish contact with the User and transfer the sums to the latter. All costs related to these activities are borne by the User.

12. CONFIDENTIALITY AND DATA PROTECTION

1. Upon accessing the Website, TRT (or Google Analytics on behalf of TRT) may place data files called cookies on the computer or other device used to access the Website (so-called technical cookies). TRT makes use of these technologies to recognize Users as occasional users or registered users, to customize the Website and advertising, to measure promotional effectiveness and to collect information on the computer or other access devices, to reduce risks, to help prevent fraud and to promote trust and confidence.

2. Users are invited to read carefully the privacy policy which also applies in the event of Users accessing or registering to the Website without using the relevant services. The privacy policy specifies how TRT collects and uses personal data for whatever purpose.

13. LIABILITIES AND WARRANTIES

1. TRT makes no representations or warranties with regard to the "legal disclaimer" on the Website.

2. The Website is supported by appropriate security measures based on current standards.

3. TRT (and/or its members, and/or banking and financial partners, and/or employees and/or partners) cannot be considered liable for loss or damage to Users' computers during use of the Website, or for incorrect or inappropriate use of the Website by third parties, or due to the hosting service provider.
TRT shall not be liable for any damages, loss of profits, loss of revenue, loss of business, loss of opportunity, loss of data, indirect or consequential loss, or any other loss resulting from negligence or willful misconduct or misuse of the Website by the User.
Risks arising from the use of the services of the Website are the sole responsibility of the User.

4. TRT is not responsible for any damage resulting from the inaccessibility of the services on the Website or from any damage caused by viruses, damaged files, errors, omissions, interruptions to service, content erasure, problems connected to the network, providers or telephone and/or telematic connections, unauthorized access, data alterations, failure and/or faulty functioning of the User's equipment.

5. TRT is not responsible for delays or shortcomings in the process of transfer of funds by the banking system, or in the verification of transactions by the networks underlying each virtual currency.

6. TRT cannot be considered liable if it temporarily suspends deposits or credits for force majeure events.

7. These TECs do not exclude or limit liability for fraud, breach of TECs, or any other liability which cannot be limited or excluded by law.

8. Notwithstanding the above, where and if applicable, TRT's overall liability - in relation to claims based on damaging events that are the immediate and direct consequence of the use of the Website and/or the services by the individual User, both for contract and for any offence (including negligence) - may in no case exceed: (a) Assets available on the account minus any amount for commissions and fees payable by the user; or alternatively (b) 100% of the amount of the transactions claimed by the user in the agreed form and within the agreed terms, minus any amount for commissions and fees due to TRT and payable in relation to such transaction(s).

14. NETWORK SERVICES PROVIDED BY THIRD PARTIES

1. The existence of a link to other sites, or the use of services or applications provided by third parties, including the hosting service, does not in any case imply the existence of any relationship between TRT and the owner of the website or portal from which or to which the link is made, or through which the use of the Website is determined.

2. TRT is not responsible for the contents or services made available to the public on the Website through the hyperlink, or through the use of applications provided by third parties. Furthermore, TRT assumes no responsibility for damage or loss resulting from the content, information, opinions, products and services offered on other websites accessible via links on the Website.

3. TRT is not responsible for the use of such third party services, links or applications by its own Users and for any release of confidential information by these Users.

4. TRT is entitled to revoke, at any time and without notice, any link to other websites and/or the accessibility of third party applications through its Website.

5. Links and contents of the Website are attributable only to TRT with reference to contents directly managed by TRT, as specified in these TECs, since the latter is not able to manage information linked to third party websites and/or applications, or is legitimately entitled to represent acceptance of other information or services offered on a linked website. The User is therefore recommended to pay attention when connecting to third party websites, through the links on the Website and is encouraged to read carefully their terms of use and privacy regulations.

15. AMENDMENT OF TECs AND DOCUMENTS REFERRED TO THEREIN

1. TRT is entitled to modify or integrate all or part of these TECs, the commissions and the documentation referred to therein, at any time and at its complete and exclusive discretion. New TECs are binding as soon as they are published on the Website, in the dedicated section.

2. The User will be notified of any changes in advance through his/her account or by email and is invited to accept the same. Following such notification, it is User's responsibility to review the terms of the amended conditions.

3. In the event of refusal or delay in accepting the changes, TRT shall be entitled to close, suspend or block the user account in accordance with Art. 10. The user accepts and acknowledges from now on that TRT cannot in any way be held liable towards the User and/or third parties for the suspension or termination of the Website services due to the customer's refusal to accept the amendments.
The use of the Website following the publication of a notice of modification implies, however, acceptance of the modifications by the User and all subsequent transactions carried out by the latter are subject to the new contractual terms.

16. SETTLEMENT OF DISPUTES

1. Users resident in an EU State, for all disputes or claims arising out of or in connection with these TECs, including disputes relating to their validity, breach, resolution or voidness, and for any disputes or claims arising out of or in connection with the use of the Website, may benefit from online dispute resolution through the use of the ODR platform, provided by the European Committee, allowing, within 30 days, in agreement with TRT, to identify the out-of-court settlement authority having jurisdiction in Italy, as well as to use the procedure made available by the said authority directly through the platform concerned, available in all EU languages.

2. Before accessing the ADR procedure referred to in the previous paragraph, the User undertakes to submit a complaint directly to TRT by email to legal@therocktrading.com. TRT is entitled to reply within 60 days following the date of receipt of the complaint by the User.

GLOSSARY

Assets Availability: transfer of virtual or legal tender currencies owned by the User on a dedicated account.
Virtual Currency Services Provider: any natural or legal person providing services to third parties, on a professional basis, for the use, exchange, storage and conversion of virtual currency from or into legal tender;
Website: www.therocktrading.com;
TEC: terms and conditions of use of the Website and The Rock Trading Services;
TRT: The Rock Trading S.r.l., with registered office at Galleria del Corso, 2, 20122, Milan, Tax Number - VAT Number : IT-10120840961, registered with Milan Companies Register No. 2507359;
Virtual currencies: digital representation of value, not issued by a central bank or public authority, not necessarily linked to a legal tender currency, used as a means of exchange for the purchase of goods and services and transferred, stored and electronically negotiated.
Last Update: 26-Apr-2018 12:00am

Privacy Disclosure

The Rock Trading S.r.l., with registered office at Galleria del Corso, 2, 20122, Milan, Tax Number- VAT Number: IT-10120840961 is the data controller ("TRT", or even "Data Controller") of users who access and visit www.therocktrading.com website and of customers who access the services thereof ("Site").

TRT, as Data Controller, provides the following disclosure ("Privacy Policy"), pursuant to Article 13 of Legislative Decree No. 231/2001. 196/2003 "Personal Data Protection Code" ("Privacy Code") and amendments thereto, as well as art. 13 of EU Regulation 2016/679 (or General Data Protection Regulation, hereinafter also referred to as the GDPR).

This Privacy Policy covers the methods for personal data collection, processing and treatment during website browsing and does not apply to other websites accessed through links; it has been drafted in a clear and intelligible way accessible to the general public, by means of icons as well, as provided for by art. 12, par. 7 of the GDPR, which will be amended at a later date, once those officially approved by the European Commission are available.

Privacy Policy is divided into the following paragraphs:

1. Data processed

As a rule, the Website can be used without having to provide any personal data. Should the Website be accessed for information only (opening no account), we are not going to collect any personal data, except for those transmitted by the user's browser or terminal device and IP address in order to enable access to the Website. In this case, data transmitted to TRT shall be, by way of example: (i) date and place of the request; (ii) the type and version of the browser used; (iii) the OS; (iv) page views and navigation paths of the Website; and (v) information on the timing, frequency and layout of the use of the Website, and in general all the use-related data offered by TRT automatic tracking system, whereby, in any case, anonymous information is collected to report use-related trends.

Personal data are collected within specific sections of the Website via electronic forms, only to access TRT services. In this case, personal data collected between the user and TRT for service use consist of two different categories, depending on whether you want to use the services only for the exchange and trading of virtual currencies, or you also want to access the services of conversion, purchase and sale of virtual currencies in exchange for currency legal tender or vice-versa.

In the first case, TRT, as Data Controller, collects and processes personal data, such as given name, family name, business name, address and e-mail address (hereinafter "Personal Data" or "Data"), communicated by the user when opening an account and registering on the Website. In the latter case, since the account is to be verified for personal identification purposes, Personal Data required will also be those necessary for identification, and may include, without limitation: (i) first name and surname; (ii) date of birth; (iii) place of birth; (iv) place of residence; (v) domicile, if different from residence; (vi) tax number, if issued; (vii) references to identification document and date of issue and expiry, etc.

TRT does not collect data from persons younger than 18 and does not process sensitive data revealing racial or ethnic origin, religious, philosophical or other beliefs, political opinions, membership of parties, trade unions, associations or organizations of a religious, philosophical, political or trade union nature, or health status.

2. Checking and Identification

Once the user has registered on the website in order to use the services by accepting the Terms and Conditions relating to the Website and the services, TRT is obliged to fulfill its obligations as a service provider relating to the use of virtual currency, as per Legislative Decree 231/2001. 21 November 2007, no. 231, as amended by Legislative Decree 25 May 2017, no. 90, concerning anti-money laundering and the fight against terrorist financing, limited to the conversion of virtual currencies from or into legal tender currencies.

TRT is obliged to verify the User's identity by means of a valid identification document, keep specific information taken from this document, check the authenticity of such document together with all additional information, including documents, which must be requested and which, during the relationship, must be updated. Therefore, the User must provide all the information additional to that required for opening the account, which will be requested through electronic forms also providing for the possibility to upload documents, or through questionnaires that will be submitted and that TRT will request to fill off-line.

In order to comply with all obligations regarding anti-money laundering, TRT, as Data Controller, makes use of third-party services, duly authorized to process Personal Data through specific outsourcing contracts with TRT, or specific mandates to process such Personal Data; third parties are required, pursuant to the GDPR, to comply with TRT's Privacy Policy and with instructions on the storage and non-disclosure, nor misuse of Personal Data other than for the purpose of data processing.

A detailed and updated list of these parties is available to the user; a formal request should be addressed to TRT.

3. Legal basis and purpose for processing

Personal Data of the user are processed:

A) with no specific consent of the data subject (Article 6(b), (c) and (f) GDPR), for the following purposes:
  • use the Website services;
  • comply with pre-contract, contract and tax obligations of TRT or carry out all measures and actions upon request of the data subject, as well as arising from all existing relationships with users, customers, collaborators, business partners, suppliers, and consultants;
  • comply with the obligations set out under the law, any Regulation, EU legislation or any Authority order ( as, for example, concerning anti-money laundering);
  • pursue legitimate rights and interests (such as the right of defense before the Court);
B) only upon specific and separate consent (Articles 23 and 130 of the Privacy Code and Article 7 GDPR), for the following marketing purposes:
  • send by e-mail, post and/or sms and/or telephone contacts, newsletters, commercial communications and/or advertising material on products or services offered by the Data Controller and assess the satisfaction rate on service quality;
  • send via e-mail, mail and/or sms and/or telephone contacts commercial and/or promotional communications from third parties (such as, for example, business partners).
In any case, TRT shall, insofar as possible, ask the data subject's consent even when the legal basis for Personal Data processing is based on the purposes referred to in paragraph 3.A).

4. Data provision

Personal Data must be provided for the purposes referred to in paragraph 3.A).

If the data are not provided by the data subject, TRT cannot guarantee the provision of business services, nor can it perform its contractual obligations towards customers, employees, suppliers, business partners and, in general, all those connected with TRT. In such cases, the Company further states that even the partial or incorrect provision of Personal Data may result in the impossibility to provide services and in any case prevents TRT from fulfilling the pre-contract, contract and tax requirements it is required to fulfill.

If consent to personal data processing is required to the data subject and the latter discontinues the consent to the provision of Personal Data already made, it shall remain mandatory and basic condition for the performance of all the purposes specified under paragraph 3.A) above. Should the data subject fail to provide his/her Personal Data, given that TRT is unable to fulfill its obligations, TRT shall not be deemed liable, resulting in the termination of any previous relationship or otherwise being unable to continue the same.

Data provision for the purposes referred to in paragraph 3.B) is optional.

The data subject may therefore decide not to provide any Personal Data or to subsequently refuse the possibility of processing any data already provided. In this case, the data subject shall not receive newsletters, commercial communications and advertising material relating to the services offered by the Data Controller, whilst remaining entitled to use company and contractual services referred to in paragraph 3.A), without prejudice to the foregoing.

5. Data processing and retention

Personal Data processing is carried out by means of procedures indicated in art. 4 Privacy Code and art. 4 no 2) GDPR. Specifically, data processing is carried out through: data collection, recording, management, retention, consultation, processing, modification, selection, extraction, comparison, application, interconnection, blocking, communication, erasure and destruction.

Personal Data are processed both in paper and electronic and/or automated form with methods and tools in compliance with the security measures set forth in art. 32 of the GDPR and Annex B of the Privacy Code, by parties specifically appointed by TRT in compliance with the provisions of art. 30 of the Privacy Code, or parties in charge of personal data processing under the direct control of TRT as provided for by Article 4, paragraph 10, of the GDPR. As anticipated, the treatment may be entrusted, by means of specific agreements, also to third parties, appointed as data processors and acting on written order of TRT itself, as Data Controller.

Data Controller or Data Processor shall process and retain Personal Data for the shortest time necessary to fulfill the purposes set out in paragraph 3, and only for the time necessary to complete the retention as provided for by the GDPR. Both the processing and retention, however, are set for no more than 10 years from the term of the processing agreement entered into for service purposes, and for no more than 12 months from data collection for marketing purposes. After these retention periods, Personal Data will be blocked, destroyed or made anonymous in accordance with legal requirements.

6. Data-access and international data-migration

Personal Data may be accessed for the purposes referred to in paragraphs 3.A) and 3.B):
  • to employees or consultants of the Data Controller who are in charge of the processing under the direct authority and instructions of TRT;
  • to TRT's partner companies, in Italy and abroad, in their capacity as data controllers and/or system administrators pursuant to art. 28 of the GDPR acting as Personal Data Processors on behalf of the Data Controller and having provided sufficient guarantees to put in place appropriate technical and organisational measures to ensure that the processing thereof complies with legal requirements;
  • to third parties or other parties, such as, without limitation, financial institutions, payment institutions or other financial intermediaries, firms, consultants, insurance carriers, which carry out activities on behalf of the Data Controller and act as independent data controllers with their own privacy policies, available to the data subject.
Without specific consent (art. 24 letters a), b), and d) Privacy Code and art. 6 letters b) and c) GDPR), the Data Controller may disclose Personal Data of the data subject for the purposes set forth in paragraph 3.A) to Supervisory Boards (such as FIU, Bank of Italy, OAM, IVASS, etc.), Judicial Authorities, insurance companies for the provision of insurance services, as well as to whom the communication is compulsory by law for the fulfillment of said purposes. Said parties will process the data in their capacity as autonomous data controllers and the Personal Data of the data subject will not be disclosed.

Personal Data will be retained on servers located within the European Union. Should it become necessary, Data Controller will be entitled to move servers also to non-EU countries.

In such a case, Data Controller hereby ensures that the transfer of data to non-EU countries will take place only upon specific consent of each data subject, to countries that guarantee an adequate level of protection of Personal Data and only after entering into agreements containing standard clauses approved by the European Commission, which guarantee that the processing of Personal Data complies with legal principles and requirements set out in the GDPR.

7. Cookies

Cookies are used on the Website. By using cookies, TRT can provide Website users with more user-friendly services that would not be possible without cookie setting. By means of a cookie, the information on the Website may be optimized as cookies enable the identification of Website users. The purpose of this identification is to make it easier for users to access the Website. The user, for example, is not obliged to enter the access data every time they visit the Website, since these data are already acquired by the Website through the cookies saved in the user's IT system.

The data subject may at any time prevent the setting of cookies when accessing the Website by setting the corresponding Internet browser used, and can therefore permanently deny the setting of cookies. In addition, cookies that have already been set can be deleted at any time via an Internet browser or other software. This is possible with every common Internet browser. If the data subject disables cookie settings in the Internet browser used, not all functions of the Website may be fully available.

More information on cookies is contained in the Cookie Policy, available from the Website in a special section therefore the user is recommended to read it.

8. Rights of data subjects and how to apply

The data subject is entitled to the rights set forth in Article. 7 Privacy Code and Art. 15 GDPR and precisely the following:
  • i) obtain confirmation as to whether or not personal data concerning him/her exist, regardless of their being already recorded;
  • ii) obtain the indication: a) of the origin of Personal Data; b) of the purposes and methods of processing; c) of the logic applied in the case of processing with the aid of electronic tools; and d) of the identification details of the Data Controller, Data Processors and other persons in charge;
  • iii) obtain: a) the updating, correction or integration of data; b) the erasure, anonymization or blocking of data processed unlawfully, including data whose retention is unnecessary for the purposes for which they have been collected; c) certification that the operations as per letters a) and b) have been notified, also with regard to their contents, to those whom the data were communicated or disseminated, unless this requirement proves impossible or involves a clearly disproportionate effort
  • iv) object, in whole or in part: a) on legitimate grounds, to the processing of personal data concerning him/her, even though they are relevant to the purpose of the collection; b) to the processing of personal data concerning him/her, where it is carried out for the purpose of sending advertising materials by means of traditional marketing systems, or automated call without operator, by e-mail, telephone and/or mail
The data subject is also entitled to the rights under Articles 16-21 GDPR, namely the right to be forgotten, the right to restrict processing, the right to data portability, and the right to submit a complaint to the Data Protection Authority.

Lastly, if consent is required to the processing of personal data by the data subject, the latter may revoke the provision of the Personal Data already carried out.

The interested party may, at any time, apply his/her rights by sending a request drawn up on the basis of the form prepared by the Personal Data Protection Authority, available at the following link: http://194.242.234.211/documents/10160/10704/MODELLO+esercizio+diritti+in+materia+di+protezione+dei+dati+personali.pdf, to be sent by: 1) registered letter with return receipt addressed to The Rock Trading S.r.l., at its registered office in Galleria del Corso, 2, 20122, Milan; or 2) by e-mail to: privacy@therocktrading.com.

9. Data controller, data processor and persons in charge

Data controller is The Rock Trading S.r.l., with registered office in Galleria del Corso, 2, 20122, Milan, in the person of its pro-tempore legal representative.

In order to comply with the GDPR, TRT has been drafting a privacy organisational model, identifying roles and responsibilities in the processing of Personal Data, and identifying in particular, as internal privacy contact persons, the Persons in charge of the Organisational Units or Offices who, limited to the processing of data under their responsibility, are responsible for implementing the data protection model in compliance with legal requirements. Data Controller shall appoint in writing as Data Processors, pursuant to art. 30 of the Privacy Code, employees of the company functions responsible for pursuing the above purposes and providing suitable instructions.

Personal Data may be processed by third parties the Company relies on for purposes of identification procedures, verification of the authenticity of identity documents, database access, or to perform payment services made available to customers. These persons will be independent Data Controllers or will be appointed as Data Processors.

The updated list of data processors and persons in charge of processing is kept at the registered office of the Data Controller.

10. Amendments to the Privacy Policy

This Disclosure may change; we recommend reviewing updates that will be notified time by time.
Last Update: 26-Apr-2018 12:00am

Anti-money laundering and anti-terrorism policies

WHEREAS

The Rock Trading S.r.l. ("TRT"), as a provider of services relating to the use of virtual currency and in compliance with the regulations on anti-money laundering and against international terrorism financing (see Legislative Decree no. 231/2007 - "Anti-Money Laundering Decree"), implemented suitable measures to manage the relevant risk in order to prevent TRT involvement in criminal events that may have negative effects on its stability and reputation on the market.

Money laundering and terrorist financing are criminal offences, which, in view of their transnational dimension, may seriously threaten the lawful economy. These are factors that cause a great deal of damage to the entire economic system: the reinvestment of illicit profits in legal activities and the presence of economic players and entities involved in crime deeply alter market mechanisms, affect the efficiency and correctness of financial activities and weaken the economic system.

It is known that TRT provides users with services linked to blockchain technology: an internet platform that allows them to buy and sell tokens or any other existing "virtual" or "mathematical" currency, as well as allowing the conversion of virtual or cryptographic tokens between them or legal tender countervalue and vice versa. In this context, transactions are protected through encryption, potentially vulnerable, due to their anonymity, to leakage of money laundering and international terrorist financing events, as indicated by the Financial Action Task Force (FATF).

Given all this, the action to prevent and contrast money laundering and terrorism financing by TRT is carried out through the introduction of controls aimed at guaranteeing proper customer verification, traceability of financial transactions, identification of suspicious transactions and storage of customer data and documents. This document ("AML Policy"), in particular, describes the general principles and criteria - which are in turn subject to further and timely internal regulation - implemented and managed by TRT for the fulfilment of the obligations required by the AML Decree in relation to its core business, which employees, collaborators, customers, corporate representatives and business partners are required to comply with.

LEGISLATIVE GROUNDS

Following the implementation of Directive 2015/849/EU (known as the Fourth AMLD) into our legal system, the relevant national legislation has been significantly amended, extending its scope to service providers relating to the use of virtual currency, limited to the performance of the activity of converting virtual currencies from or into legal tender currencies.

The IV AMLD has been implemented in our legal system with the Legislative Decree. 90/2017, which amended and supplemented the Anti-Money Laundering Decree. The Anti-Money Laundering Decree consists of three main pillars:
  • proper customer verification;
  • retention of customer data and information;
  • suspicious transaction reports.
The regulatory provisions of the Anti-Money Laundering Decree provide for an accurate identification of customer information and introduce the concept of a "risk-based approach" according to the "sensitivity" of customers, comparing customer due diligence obligations with the risk related to the customer, the product and the geolocation.

Authorities at national level called upon to supervise compliance with the regulations are the Ministry of the Economy of Finance, the Financial Information Office (FIU) at the Bank of Italy, the Supervisory Authorities of each sector where the parties required to apply the regulations operate, the Anti-Mafia Investigative Directorate (DIA) and the Tax Authorities.

DEFINITIONS

In order to clarify the terminology used in this AML/KYC Policy, the following definitions are specified:
  • Client: The person, who enters into a continuous relationship with TRT, opens an account on the Website and carries out purchase and sale transactions or requests or obtains the provision of a professional service by TRT.
  • Identifying data: given name and family name, place and date of birth, domicile, if different from the registered residence, the references of the identification document and, if granted, the tax number or, in the case of persons other than natural persons, the name, registered office and, if granted, the tax number.
  • Agent/Trader: The person authorized to deal with the Client's name and on his/her behalf or who is in any case vested with representative powers enabling him/her to deal with the Client's name and on his/her behalf.
  • Terrorist financing: Any activity carried out in any way and aimed at the provision, collection, intermediation, deposit, custody or disbursement of funds and economic resources, directly or indirectly, in whole or in part, suitable for the performance of one or more conduct aimed at terrorism, in accordance with the provisions of criminal law, regardless of the actual disbursement of funds and economic resources for the commission of the aforementioned conduct.
  • Fractionated transaction: It is a single transaction in terms of economic value, for an amount equal to or exceeding thresholds set by this decree, carried out through several transactions, each lower than the above thresholds, carried out at different times and within a limited time period set at seven days, without prejudice to the existence of the fractionated transaction should there be elements to consider it as such.
  • Occasional Transaction: A transaction not attributable to a continuing business relationship as such; an intellectual or commercial service, including those with the immediate execution of the transaction, rendered in favor of the customer also represents an occasional transaction
  • High Risk Countries: These are countries outside the European Union whose legal systems suffer from strategic weaknesses in their national systems to prevent money laundering and terrorist financing, as identified by the European Commission.
  • Politically Exposed Persons - PEPs: These are natural persons who have been entrusted or no longer have been (for less than one year), with prominent public functions, as well as their family members and those who have close links with such persons, as listed below:
    1. individuals who have or have held prominent public offices, those who hold or have held the role of:
    • 1.1 President of the Republic, President of the Council, Minister, Vice-Minister and Undersecretary, President of the Region, Regional Alderman, Mayor of the provincial capital or metropolitan city, Mayor of the municipality with a population of non-less than 15,000 inhabitants and similar positions in foreign states;
    • 1.2 Members of Parliament, Senators, Members of the European Parliament, Regional Councilors and equivalent offices in foreign countries;
    • 1.3 member of the central governing boards of political parties;
    • 1.4 Judge at the Constitutional Court, Judge at the Italian Supreme Court or the Court of Auditors, State Councilor and other members of the Administrative Justice Committee for Sicily and similar positions in foreign countries;
    • 1.5 member of the governing boards of central banks and independent authorities;
    • 1.6 ambassador, business representative or comparable positions in foreign states, senior military officer or comparable positions in foreign states;
    • 1.7 member of the administrative, management or control authorities of companies subsidiaries, even indirectly, of the Italian State or of a foreign State, companies controlled by Regions, provincial capitals and metropolitan cities and by municipalities with a total population of not less than 15,000 inhabitants;
    • 1.8 General Manager of ASL, Hospital, University Hospital and other National Health Service Institutes;
    • 1.9 Director, Deputy Director and member of the management board or entity performing similar functions in international organizations;
    2. relatives of politically exposed persons include: parents, spouses or persons in a non-marital partnership or institutions deemed equivalent to the politically exposed person, children and spouses thereof, and persons in a non-marital partnership or in a de-facto partnership or institutions treated as such;

    3. The following are persons whom politically exposed persons are recognized to maintain close links with:
    • 3.1 natural persons linked to the politically exposed person by virtue of joint beneficial ownership of legal entities or other close business relationships;
    • 3.2 natural persons who only formally control a whole entity known to be effectively established in the interest and for the benefit of a politically exposed person.
  • Ongoing relationship: It is a long-term relationship, falling within the scope of the activity of an institution carried out by the responsible parties, which is not limited to a single transaction.
  • Money laundering: Money laundering is defined as the following criminal offences:
    • a) conversion or transfer of property, being aware that such property results from criminal activity or participation therein, for the purpose of concealing or disguising the unlawful origin of the property or helping any person involved in such activity to avoid legal effects of such activities;
    • b) concealment or disguise of the true nature, source, location, disposition, movement, ownership of, or rights in respect of property, being aware that such property is the result of criminal activity or participation therein;
    • c) purchase, possession or use of property, being aware, at the time of receipt, that such property resulted from criminal activities or from participation therein;
    • d) involvement in, attempt to commit, aiding, abetting, or counselling someone to commit any of the activities listed in (a), (b) and (c), or facilitating the commission thereof.
  • Beneficial Owner: The natural person(s), other than the client, in whose interest the ongoing relationship is ultimately established, the professional service is rendered or the transaction is carried out.

KNOW YOUR CUSTOMER (KYC) PROCESS

KYC (know your customer) is an essential element of national and European legislation governing financial transactions between agents/traders and customers.

Careful customer control, in addition to being a valid tool for combating money laundering and terrorist financing, protects traders against commercial and reputational risks together with the enforcement of administrative, civil and criminal penalties and fines.

TRT carries out the appropriate customer verification and monitors the activity through the analysis of the following parameters:
  • identification data/personal details;
  • legal status (for corporate entities);
  • prevailing activity;
  • source of funds;
  • conduct occurring at the time of opening the ongoing relationship or at the time of completion of the transaction;
  • geographical region of origin;
  • purpose for opening the relationship;
  • transaction or relationship details;
  • transaction amount;
  • significance of the transaction and the relationship.
In gathering customer information, TRT makes use of the activities carried out by third parties entrusted with the task of adequate verification. In particular, the authorised party shall acquire at least the customer's identification document and verify its identity. In any case, the acquisition of internal and external data allows TRT to determine the relevant money laundering risk profile for each customer, monitored periodically based on the risk profile mentioned above.

TRT constantly updates customer due diligence during the relationship with the same, both during the review phase (scheduled according to the risk level) and when any events occur, such as, but not limited to: anomalies detected by the IT applications used, reports by the Authorities, identification of transactions carried out by the customer not consistent with the nature of the relationship underlying the transaction.

COMPLIANCE WITH KEY AML/CFT REQUIREMENTS

AML Policy adopted by TRT is based on the risk-based approach principles. In particular, TRT:
  • does not enter into transactions with shell banks with no physical presence in the country where they are incorporated and authorized to engage in such activity;
  • pays greater attention to and adopts enhanced measures in cases where situations involving a greater risk of money laundering arise or when verifying persons who hold or have held important public offices (PEPs);
  • does not carry out transactions involving for any reason (originators or payees) persons listed within court orders;
  • checks incoming and outgoing transactions ( controls on payees and originators) and assesses movements rejected due to similarities with anti-terrorist lists;
  • carries out, by automated means, personal data checks and makes comparisons with the names on the lists provided by the UN and EC Regulations and other international and domestic agencies.

INFORMATION SECURITY AND CONFIDENTIALITY

In order to comply with the storage obligations, TRT has implemented an IT register, ensuring that data management is clear and complete, so that information is easy to access and readily available. TRT has entrusted the maintenance of the register to a third party.

Information and data obtained are retained for ten years as provided for by the existing Legislative Decree 231/2007.

ANTI-MONEY LAUNDERING FUNCTION

TRT has appointed a Manager of the AML Department.

TRT's internal control system, however, involves the entire corporate structure from corporate boards to control functions. TRT ensures that adequate internal controls are maintained to protect the integrity of the money laundering risk management process and the relevant reputational risk by drafting strict guidelines on the topic, as well as by means of an adequate internal organizational structure.

The Anti-Money Laundering Policy updates, as well as the assessment of the compliance with procedures and internal provisions adopted by TRT, is entrusted to the AML Department which, in partnership with other internal functions or external professions, is responsible for ensuring the effectiveness of the activities implemented to mitigate the risks related to money laundering and terrorist financing.

ORGANISATIONAL/REGULATORY SUPERVISION

TRT has implemented dedicated organizational/regulatory supervision to fulfil the obligations set out in the AML Decree. In particular, adequate internal regulatory procedures have been prepared to govern the requirements established in order to provide TRT corporate functions with internal reference and support tools useful for understanding the issues involved.

Furthermore, TRT adopted specific IT tools for the analysis of the anti-money laundering risk profiles to be attributed to customers and for the monitoring of "anomalous" transactions for which an analysis is carried out by the relevant structures in order to assess the same.

SUSPICIOUS TRANSACTION REPORTING

In order to cooperate with the Authorities to ensure the stability of the financial system and to avoid TRT involvement in money laundering and terrorist financing, the latter has adopted a structured process for reporting suspicious transactions regarding the illicit origin of transferred funds. For this purpose, TRT has identified a reporting party responsible to report suspicious transactions, required to transmit reports to the Financial Intelligence Unit (FIU) in the form and manner required by the Authority.

TRAINING

As provided for by the Anti-Money Laundering Decree, TRT annually provides a Training Program (e-learning, specific courses) mandatory for all personnel, consultants and company representatives.
Last Update: 26-Apr-2018 12:00am

Risk Disclosure

with regard to the services rendered by The Rock Trading S.r.l.


1. THE ROCK TRADING - MISSION

The Rock Trading S.r.l., with registered office in Galleria del Corso, 2, 20122, Milan, Tax Number - VAT number: IT-10120840961, registered in the Milan Companies Register no. 2507359 ("TRT") is the company owner of www.therocktrading.com ("Website").

By means of the Website, TRT mainly operates as a service provider concerning virtual currency use, by providing users, on a professional basis, with services functional to the use, exchange, maintenance of virtual currencies and its conversion from or into legal tender currencies in particular, TRT provides blockchain services to users: an internet platform enabling customers to buy and sell tokens or any other existing virtual or mathematical currency, and allowing virtual or cryptographic currencies to be converted among each other or against legal tender and vice versa.

According to Italian legal system, TRT activity falls within the definition of "Service provider related to virtual currency" (see Legislative Decree 231/2007, art. 1, paragraph 2, letter "ff"), required by art. 17-bis, c. 8-bis, Legislative Decree 141/2010, to enroll in a special section of the register managed by OAM (currently not yet established).

TRT, as service provider for virtual currency, is obliged to comply with the obligations required by the AML Law on entities, see, pursuant to Legislative Decree 231/2007.

Furthermore, the Website, TRT services and their use are neither offered to nor used by persons, natural or not, having their residence or registered office in the United States of America and in all other countries indicated by the European authorities as "blacklisted" in the relevant lists (updated on a case by case basis) accessible through the following link: https://www.ecb.europa.eu/paym/retpaym/paymint/sepa/html/index.en.html.

2. WHAT "VIRTUAL CURRENCIES" ARE

Virtual currencies are a digital representation of value that is neither issued by a central bank or a public authority, nor necessarily attached to a FC, but is accepted by natural or legal persons as a means of payment and can be transferred, stored or traded electronically (For further information please refer to the EBA Opinion on Virtual Currencies of 4 July 2014, available here, also referred to in the joint communication of the Bank of Italy and the Financial Intelligence Unit dated 30 January 2015, furthermore see the definition of the Legislative Decree. 231/2007, art. 1, paragraph 2, letter "ff".).

3. VIRTUAL CURRENCY FEATURES

To identify the risks associated with virtual currencies, the main features of virtual currencies need to be understood.

Although each virtual currency has its own functioning mechanisms, most of them, as indicated by the Bank of Italy in the aforementioned communication, have the following characteristics:
  • are created by a private issuer (in the case of centralized currencies), or, on a widespread basis, by users who use highly sophisticated software within open networks (in the case of decentralized currencies);
  • are operated through electronic wallets [e-wallet], which can be saved on computers or smartphones, or accessed via the Internet following registration and authentication mechanisms;
  • can also be purchased with legal tender currency on an exchange platform offering the service of buying, selling and converting virtual currencies with legal tender currency, or received online directly from someone who owns them, and then held on a wallet "inside" the exchange platform, or on its own wallet outside it;
  • transactions through which virtual currencies are transferred have a technical irreversible character (once a transaction has been made, it is not possible to request its cancellation).

4. WHAT DIGITAL OR CRYPTOGRAPHIC TOKENS ARE

Digital tokens are Cryptographic Account Units issued in connection with an ICO or Initial Coin Offering process carried out specifically to collect money from the public through the sale thereof and exchange with other virtual currencies, or, in certain cases, with legal tender currencies.
In an ICO, a company, a start-up or an entity not yet organised in corporation form issues currency or cryptographic tokens and offers them for sale in exchange for legal tender, or, much more often, in exchange for virtual currencies, such as Bitcoin or Ether.

5. RISKS ASSOCIATED WITH THE USE OF VIRTUAL CURRENCIES

Trading in the purchase, sale and conversion of virtual currency and digital tokens involves a number of risks. Risks include but are not limited to:
  • (a) Lack of information: Failing disclosure requirements, it may be difficult to find reliable indications to understand the functioning, costs, value and risks of each type of virtual currency.
  • (b) Lack of legal and contractual protection: purchase, exchange and use of virtual currencies are not supported by legal and/or contractual protection similar to that provided by legal tender transactions; virtual currency transactions are almost always technically irreversible.
  • (c) Lack of regulation and supervision: Issuance and management of virtual currencies, including conversion into legal tender, are activities not subject to supervision by any other authority in Italy.
  • (d) Lack of protection or guarantee of the deposits: in the case of fraudulent conduct, bankruptcy or interruption of trading platforms activity, there are no specific regulatory safeguards to cover the losses incurred. Similarly, virtual currency deposits held with third parties are not covered by traditional protection instruments such as Deposit Guarantee Schemes.
  • (e) High volatility of the value and risk of loss: the value of virtual currencies is highly volatile, partly due to price formation mechanisms and the absence of a central authority to intervene to maintain their value. This may result in losses in the event of owning virtual currency.
  • (f) Risk of use for criminal and illegal purposes1: virtual currency network can be used for transactions related to criminal activities, including money laundering to be avoided by adequate anti-money laundering measures;
  • (g) Legal risk: Legal status of virtual currencies and specific digital tokens is uncertain. This may imply that possession or exchange in certain countries may be subject to express regulation, as well as prohibition by public authorities.
  • (h) Market risk: The market for virtual currencies and cryptographic tokens is still new and uncertain. No one should invest funds in this market or speculate if not willing to make losses, or if not ready to lose the entire investment.
  • (i) Counterparty risk: virtual currencies or digital tokens on deposit, including through the provision of third party services, entail custody risks. Such risks include security breaches, risk of loss, interruption of Exchanger operations (i.e. websites that allow virtual currencies to be exchanged for legal tender and vice versa or virtual currencies). End users are obliged to exercise all possible caution to avoid - or as far as possible eliminate - stocks of virtual currencies and digital tokens in the internal wallets made available by the exchange platforms.
  • (j) Conversion, purchase and sale risks: in addition to liquidity risks, the values of virtual currencies and cryptographic tokens in any market are highly volatile and can change rapidly. Holders who exchange, buy or sell virtual currencies and digital tokens should pay particular attention to how the value can be affected by sudden changes or information. In addition, Holder is exposed to the risk of not being able to convert virtual currencies and digital tokens into legal tender for a long period of time.
  • (k) Liquidity risk: virtual currency and digital token markets have different levels of liquidity. Some are rather liquid, while others may be less liquid. The latter may amplify price volatility.
1 Risks from letters a) to f) are highlighted by the Bank of Italy in the Communication already mentioned in this document dated 30 January 2015.

See for further details the joint communication of the Bank of Italy and the Financial Intelligence Unit dated 30 January 2015 (click here to get access) and the warning published jointly by ESMA, EBA and EIOPA on risks related to virtual currencies (click here to get access).

6. RISKS CONNECTED WITH PARTICIPATION IN AN ICO

Buying cryptographic tokens is equivalent to investing in an ICO, as defined above. As indicated by the European Securities and Markets Authority (see ESMA in its warning dated 13 November 2017, available at the link by clicking here), the main risks involved in investing in an ICO are the following:
  • unregulated area, subject to potential fraud or illegal activities: Depending on how cryptographic tokens offered in an ICO are structured, they may fall outside the existing rules and may fall within an unregulated area without investor protection;
  • high risk of losing invested capital: the vast majority of ICOs are launched by companies or start-ups that are at an early stage of development with a high risk of failure;
  • lack of exit options and extreme price volatility: Investors may not be able to exchange digital tokens for legal tender currencies as not all cryptographic tokens are negotiable on trading platforms and their price is extremely volatile as linked to services to be developed by the issuer;
  • inadequate information: Information made available to investors, e.g. white papers, is in the majority of cases uncertified, incomplete or even misleading; investors may therefore not fully understand the potential risks they take when purchasing cryptographic tokens;
  • flaws in technology: The blockchain technology underlying cryptographic tokens, unlike virtual currencies, is still largely not verified and there may be software development flaws. Thus, on the one hand, investors may not be able to access or control their digital tokens, which may be stolen or removed, for example in the case of a hack, and, on the other hand, register technology may not quickly and safely operate, for example during peaks in activity.
Please note, however, that through the Site you can not participate in or join the ICO.
Last Update: 26-Apr-2018 12:00am