Financial Instruments and Exchange Act

The term "financial instruments business" as used in this Act means performance of any of the following acts (excluding those that are specified by Cabinet Order as acts which, in consideration of their content and other factors, are found not to compromise the protection of investors, and the acts set forth in item (xii), (xiv), (xv), and (xv) xviii) through (xxv) of this paragraph and in the items of Article 28, paragraph (810), when performed by a bank, a cooperative financial institution defined in Article 2, paragraph (1) of the Act on Preferred Equity Investment (hereinafter referred to as a "cooperative financial institution") or other financial institutions specified by Cabinet Order) on a regular basis:

the value, etc. of securities (meaning the value of securities, the amount receivable for options on securities (meaning the right to conduct a transaction provided for in Article 28, paragraph (810), item (iii), (c) on a financial instruments market in accordance with the standards and means prescribed by the person operating the financial instruments market, the right to conduct a transaction similar to the transaction provided for in Article 28, paragraph (810), item (iii), (c) on a foreign financial instruments market, or the right to conduct a transaction set forth in item (iv), (c) or (d) of that paragraph without using a financial instruments market or foreign financial instruments market); the same applies in (b)), and the movement of securities indicators (meaning the price or interest rate of securities and anything else specified by Cabinet Office Order as being equivalent thereto, or figures calculated based thereon)); or

investment decisions (meaning decisions on the classes, issues, volumes, or pricesvalue, etc. of securities targeted for investment, as well as whethercryptoassets (meaning the securities are purchased or sold and by what method and at what timing, and decisions on what should bevalue of cryptoassets, the amount receivable for options (limited to those related to cryptoassets or cryptoasset indicators (meaning the content and timing of any derivatives transactions that are conducted; the same applies hereinafter) based on an analysis of the values, etc. of financial instruments (meaning the value of financial instruments (inprice or interest rate of cryptoassets and anything else specified by Cabinet Office Order as being equivalent thereto, or figures calculated based thereon; the case of those listedsame applies in paragraph (24), item (iii)-3, limited to(b)), and excluding those listed on a financial instruments exchangethat fall under options on securities), amount receivable for options, and trends of financial indexes (in the casemovement of those associated with the financial instruments set forth in that item, limited to those listed on a financial instruments exchangecryptoasset indicators); the same applies hereinafter);or

investment decisions (meaning decisions on the classes, issues, volumes, or prices of securities or cryptoassets targeted for investment, as well as whether the securities or cryptoassets are purchased or sold and by what method and at what timing, and decisions on what should be the content and timing of any derivatives transactions that are conducted; the same applies hereinafter) based on an analysis of the values, etc. of financial instruments (meaning the value of financial instruments (in the case of those listed in paragraph (24), item (iii)-3, limited to those listed on a financial instruments exchange), amount receivable for options, and trends of financial indexes (in the case of those associated with the financial instruments set forth in that item, limited to those listed on a financial instruments exchange); the same applies hereinafter);

conclusion of the following contracts, and the management of money or any other property (including instructions for that management; the same applies hereinafter), based on such contract, as an investment in securities or cryptoassets, or in rights connected with derivatives transactions, based on investment decisions that are grounded in an analysis of the values, etc. of Financial Instrumentsfinancial instruments:

the management (excluding management that falls under the category of act set forth in item (xii)) of money or other property contributed by a person that holds rights indicated on the securities specified in paragraph (1), item (x) or other rights specified by Cabinet Order, as an investment in securities or cryptoassets, or in rights connected with derivatives transactions, based on investment decisions that are grounded in an analysis of the values, etc. of financial instruments;

the management (excluding management that falls under the category of act set forth in item (xii) or the preceding item) of money or other property invested or contributed by a person that holds the following rights or other rights specified by Cabinet Order, as an investment mainly in securities or cryptoassets, or in rights connected with derivatives transactions, based on investment decisions that are grounded in an analysis of the values, etc. of financial instruments:

acts specified by Cabinet Order as being similar to the purchase and sale of cryptoassets (including exchange for other cryptoassets, but excluding those falling under the acts set forth incategory of derivatives transactions; the preceding items.same applies hereinafter);

intermediation, brokerage, or agency for the act set forth in the preceding item;

underwriting of specified cryptoassets (meaning performing any of the acts set forth in the items of paragraph (53) upon specified cryptoasset acquisition solicitation, etc. (meaning the specified cryptoasset acquisition solicitation, etc. prescribed in paragraph (52); the same applies in item (xxii)));

public offering or secondary distribution of specified cryptoassets;

handling of specified cryptoasset acquisition solicitation, etc.;

accepting the depositing of money from customers in connection with the acts set forth in items (xviii) through the preceding item that one performs;

the management of cryptoassets for another person (excluding cases where another Act has special provisions concerning the conduct of such management on a regular basis);

borrowing of cryptoassets;

acts specified by Cabinet Order as being similar to the acts set forth in the preceding items.

The term "financial instruments intermediary service" as used in this Act means services that fall under the category of any of the following acts (excluding the act provided for in item (iv) below if performed by a person engaged in investment management business as defined in Article 28, paragraph (4)), which are provided for and under entrustment from a financial instruments business operator (limited to a person that engages in the type-I financial instruments business provided for in Article 28, paragraph (1) (excluding the type-I small amount electronic public offering service prescribed in Article 29-4-2, paragraph (9) and the specially permitted intermediary services for unlisted securities, etc. prescribed in Article 29-4-4, paragraph (8)) or investment management business provided for in Article 28, paragraph (4) (excluding the investment management business for qualified investors prescribed in Article 29-5, paragraph (1))) or a registered financial institution (meaning a bank, cooperative financial institution, or other financial institution specified by Cabinet Order, which is registered as under Article 33-2; the same applies hereinafter):

intermediation for services that fall under the purchase and salecategory of any of securities the following acts (excluding intermediation the act set forth in (d) below if performed by a person engaged in investment management business provided for in Article 28, paragraph (8), item (x));4)), which are provided for and under entrustment from a financial instruments business operator (limited to a person that engages in the type-I financial instruments business provided for in Article 28, paragraph (1) (excluding type-I small amount electronic public offering services provided for in Article 29-4-2, paragraph (9) and specially permitted intermediary services for unlisted securities, etc. provided for in Article 29-4-4, paragraph (8)) or investment management business provided for in Article 28, paragraph (4) (excluding investment management business for qualified investors provided for in Article 29-5, paragraph (1))) or a registered financial institution (meaning a bank, cooperative financial institution, or other financial institution specified by Cabinet Order, which is registered as under Article 33-2; the same applies hereinafter):

intermediation for the purchase and sale of securities (excluding that set forth in paragraph (8), item (x));

the intermediation provided for in paragraph (8), item (iii);

the act set forth in paragraph (8), item (ix); or

the intermediation provided for in paragraph (8), item (xiii);

services that fall under the intermediation set forth category of any of the following acts, which are provided for and under entrustment from a financial instruments business operator (limited to a person that engages in cryptoasset trading business provided for in Article 28, paragraph (8), item (iii);5) (excluding specially permitted cryptoasset trading services provided for in Article 29-6, paragraph (7))):

the act set forth in paragraph (8), item (ix); or

the intermediation set forth in paragraph (8), item (xiii).

the intermediation provided for in paragraph (8), item (xix); or

the act set forth in paragraph (8), item (xxii).

crypto-and other assets (meaning the cryptoassets prescribed in Article 2, paragraph (14) of the Payment Services Act or what is set forth in Article 2, paragraph (5), item (iv) of that Articlethe Payment Services Act which is specified by Cabinet Office Order as anything for which it is found necessary to ensure the protection of investors; the same applies hereinafter);

The term "specified financial index" as used in this Act means a financial index specified by the Prime Minister as a financial index for which the decrease in its credibility is likely to have a material impact on Japan's capital market, in light of the type of derivatives transactions or trading in securities tradingor cryptoassets related to that financial index.

The term "cryptoasset" as used in this Act means the following; provided, however, that this excludes those that indicate the rights provided for in Article 29-2, paragraph (1), item (viii):

a financial value (limited to one that is recorded on an electronic device or any other such object by electronic means, and excluding currencies, currency-denominated assets (meaning the currency-denominated assets provided for in Article 2, paragraph (7) of the Payment Services Act; the same applies hereinafter in this item) and electronic payment instruments provided for in paragraph (5) of that Article (excluding those that fall under currency-denominated assets); the same applies in the following item) that can be used to pay the price to unspecified persons when purchasing or borrowing goods or other financial value (excluding currencies) or receiving the provision of services, and that can be purchased and sold with unspecified persons as the other parties, and that can be transferred by using an electronic data processing system;

a financial value that can be reciprocally exchanged with that set forth in the preceding item with unspecified persons as the other parties, and that can be transferred by using an electronic data processing system.

In this Act, "specified cryptoasset" means a cryptoasset for which only a specified person has the authority to issue that cryptoasset (including those specified by Cabinet Office Order as similar thereto).

In this Act, "specified cryptoasset issuer" means a person that issues or intends to issue a specified cryptoasset (for a specified cryptoasset specified by the Cabinet Office Order prescribed in the preceding paragraph, a person specified by Cabinet Office Order).

In this Act, "public offering or secondary distribution of specified cryptoassets" means, among an offer to provide newly issued specified cryptoassets for value, the solicitation of an offer to acquire them for value, an offer to sell already issued specified cryptoassets, and the solicitation of an offer to purchase them (hereinafter referred to as "specified cryptoasset acquisition solicitation, etc."), those that fall under any of the cases set forth in the following items (excluding those pertaining to the purchase and sale of specified cryptoassets through the services for purchase and sale, etc. of cryptoassets (meaning services pertaining to an act set forth in paragraph (8), item (xviii) or (xix) that is conducted, using an electronic data processing system, by a method specified by Cabinet Order with a large number of persons simultaneously as parties on one side or as parties on both sides; the same applies hereinafter) of a financial instruments business operator (limited to a person that conducts the cryptoasset trading business prescribed in Article 28, paragraph (5); the same applies in item (i) and Chapter II-7) that pertain to a sale by a person other than the specified cryptoasset issuer of the relevant specified cryptoassets (including a person specified by Cabinet Order as having a close relationship with that specified cryptoasset issuer), and those pertaining to a transaction equivalent thereto or any other transaction of specified cryptoassets specified by Cabinet Order):

a case specified by Cabinet Order as a case where it is conducted with a large number of persons (excluding a person that is a qualified institutional investor (including a financial instruments business operator; the same applies hereinafter in this paragraph and Chapter II-7) and falls under a case specified by Cabinet Order as one in which there is little likelihood of the relevant specified cryptoassets being transferred from the qualified institutional investor that is the person that acquires them to a person other than a qualified institutional investor) as the other parties;

in addition to the case set forth in the preceding item, a case that does not fall under any of the following:

a case where it is conducted only with qualified institutional investors as the other parties and which is specified by Cabinet Order as one in which there is little likelihood of the relevant specified cryptoassets being transferred from the person that acquires them to a person other than a qualified institutional investor;

a case other than the case set forth in the preceding item and (a) (excluding a case that meets the requirements specified by Cabinet Order in consideration of the status, etc. of the issuance and solicitation of specified cryptoassets of the same issue as the relevant specified cryptoassets) and which is specified by Cabinet Order as one in which there is little likelihood of the relevant specified cryptoassets being held by a large number of persons.

In this Act, "underwriter of specified cryptoassets" means a person that does any of the following in connection with specified cryptoasset acquisition solicitation, etc.:

acquiring or purchasing all or part of the relevant specified cryptoassets for the purpose of having them acquired by others or selling them;

concluding a contract to acquire or purchase the remainder in the case where there is no other person that acquires or purchases all or part of the relevant specified cryptoassets.

In this Act, "cryptoasset management-related services" means the following services:

services of continuously making available to a financial instruments business operator (limited to one that engages as a business in the act set forth in paragraph (8), item (xxiv); the same applies in the following item and item (iii)) an information system necessary for the management of cryptoassets of customers (limited to those specified by Cabinet Office Order);

services of maintaining or managing (limited to those specified by Cabinet Office Order), upon entrustment by a financial instruments business operator, the information system of that financial instruments business operator prescribed in the preceding item;

in addition to what is set forth in the preceding two items, services specified by Cabinet Office Order, among the services pertaining to the act set forth in paragraph (8), item (xxiv), that are performed upon entrustment by a financial instruments business operator.

In this Act, "cryptoasset management-related service provider" means a person that has made a notification under the provisions of Article 66-94, paragraph (1) (excluding a person that has made a notification to the effect that it falls under Article 66-101, item (ii) pursuant to the provisions of that Article).

With regard to a balance sheet, profit and loss statement, or other documents on financial accounting specified by Cabinet Office Order that are stated in a securities registration statement under Article 5, paragraph (1) as prescribed in the preceding Article (including its amended statement), an annual securities report (including its amended report), or any other document specified by Cabinet Office Order, which are submitted by a company that is an issuer of securities set forth in Article 24, paragraph (1), item (i), or any other person, specified by Cabinet Order (referred to as a "specified issuer" in this paragraph, Article 26-5, paragraph (6), and Article 26-41; and the documents are referred to as "documents on financial accounting" in paragraphs (4) and (7) and in Article 26-41, paragraph (1) and paragraph (2), item (i)), audit certification must be received from a certified public accountant (including a foreign certified public accountant prescribed in Article 16-2, paragraph (5) of the Certified Public Accountants Act (Act No. 103 of 1948); the same applies hereinafter in this Article, Article 26-41, and Article 27-59, Article 43-2, paragraph (3), and Article 43-14, paragraph (3)) or audit corporation (if the specified issuer is a listed company, etc. prescribed in Article 34-34-2 of that Act, limited to a certified public accountant or audit corporation registered under that Article) that has no special interest in that person; provided, however, that the above does not apply in the following cases:

The issuer set forth in each of the following items, pursuant to the provisions of Cabinet Office Order, must provide the holders of the securities set forth in the relevant item with the information about that issuer that is specified by Cabinet Office Order (hereinafter referred to as "information on the issuer") or disclose the same, at least once each business year (if the issuer is not a company or in any other cases specified by Cabinet Office Order, the period specified by Cabinet Office Order; the same applies in paragraph (4), Article 172-11, paragraph (1) and Article 185-7, paragraph (3341), item (iv)); provided, however, that this does not apply in the cases that are specified by Cabinet Office Order as those in which, in consideration of liquidity and other circumstances, not doing so is found not to damage the public interest or result in insufficient investor protection:

Chapter II-7 Disclosure, etc. of Information on Specified Cryptoassets, etc. and Cryptoasset Information, etc.

Section 1 Disclosure, etc. of Information on Specified Cryptoassets, etc. by Specified Cryptoasset Issuers

A public offering or secondary distribution of specified cryptoassets (excluding one that falls under general solicitation involving specified cryptoassets acquired by a qualified institutional investor prescribed in the following paragraph; the same applies hereinafter in this paragraph) may not be conducted unless the specified cryptoasset issuer has disclosed, pursuant to Cabinet Office Order, the following information concerning that public offering or secondary distribution of specified cryptoassets (hereinafter referred to as "information on specified cryptoassets"); provided, however, that this does not apply if information has been disclosed regarding the specified cryptoassets pertaining to the relevant public offering or secondary distribution of specified cryptoassets (excluding one conducted by a specified cryptoasset issuer (including a person specified by Cabinet Order as having a close relationship with that specified cryptoasset issuer) (limited to one pertaining to specified cryptoassets of that specified cryptoasset issuer)), or in any other case specified by Cabinet Office Order:

information specified by Cabinet Office Order as basic information that should be made clear to investors regarding the relevant specified cryptoassets;

information on the particulars specified by Cabinet Office Order as particulars concerning the specified cryptoasset acquisition solicitation, etc. pertaining to the relevant specified cryptoassets;

information on the trade name of the specified cryptoasset issuer of the relevant specified cryptoassets, the business outline pertaining to the relevant specified cryptoassets, the state of accounting, and other particulars specified by Cabinet Office Order as necessary and appropriate in the public interest or for investor protection.

A specified cryptoasset acquisition solicitation, etc. pertaining to specified cryptoassets for which the specified cryptoasset acquisition solicitation, etc. fell under the case set forth in Article 2, paragraph (52), item (ii), (a) or (b) (for the case set forth in item (ii), (b) of that paragraph, limited to a case in which, by excluding a qualified institutional investor pursuant to the provisions of item (i) of that paragraph, the specified cryptoasset acquisition solicitation, etc. comes not to fall under the case set forth in that item) (for the case set forth in Article 2, paragraph (52), item (ii), (b), limited to specified cryptoassets acquired or purchased by a qualified institutional investor excluded pursuant to the provisions of item (i) of that paragraph), that is conducted by a qualified institutional investor toward a person other than a qualified institutional investor (hereinafter referred to as "general solicitation involving specified cryptoassets acquired by a qualified institutional investor"), may not be conducted unless the specified cryptoasset issuer has disclosed information on specified cryptoassets concerning that general solicitation involving specified cryptoassets acquired by a qualified institutional investor, pursuant to Cabinet Office Order; provided, however, that this does not apply if information has been disclosed regarding the specified cryptoassets pertaining to that general solicitation involving specified cryptoassets acquired by a qualified institutional investor, or in any other case specified by Cabinet Office Order.

A case in which information has been disclosed, as prescribed in the proviso to paragraph (1) and the proviso to the preceding paragraph, means any of the following cases:

a case in which disclosure of information on specified cryptoassets under the provisions of the main clause of paragraph (1) concerning a public offering or secondary distribution of specified cryptoassets already conducted for the relevant specified cryptoassets (excluding one that falls under general solicitation involving specified cryptoassets acquired by a qualified institutional investor), or disclosure of information on specified cryptoassets under the provisions of the main clause of the preceding paragraph concerning general solicitation involving specified cryptoassets acquired by a qualified institutional investor already conducted for the relevant specified cryptoassets, has been made (excluding a case in which the specified cryptoasset issuer of the relevant specified cryptoassets has obtained the approval under the proviso to Article 27-50, paragraph (1) for the relevant specified cryptoassets, and any other case specified by Cabinet Office Order);

a case specified by Cabinet Office Order as equivalent to the case set forth in the preceding item.

A financial instruments business operator that intends to engage in the handling of a public offering or secondary distribution of specified cryptoassets subject to the application of the main clause of paragraph (1) or the main clause of paragraph (2) (including general solicitation involving specified cryptoassets acquired by a qualified institutional investor (excluding one that falls under a public offering or secondary distribution of specified cryptoassets); the same applies hereinafter in this Chapter and Article 172-14) (such handling including any act specified by Cabinet Office Order as similar thereto) must, pursuant to Cabinet Office Order, disclose in advance the information on specified cryptoassets to be disclosed under the main clause of paragraph (1) or the main clause of paragraph (2) concerning that public offering or secondary distribution of specified cryptoassets (including amended specified cryptoasset information, etc. pertaining to that information on specified cryptoassets (meaning the amended specified cryptoasset information, etc. prescribed in Article 27-52; the same applies hereinafter in this paragraph, paragraph (2) of the following Article, Article 27-44, item (ii), and Article 27-46, paragraph (1)); except in Article 27-49, paragraphs (1) and (3) and Article 27-52, the same applies hereinafter in this Chapter). In this case, if a financial instruments business operator comes to know that the information on specified cryptoassets contains false information regarding a material particular, lacks information about a material particular that is to be disclosed, or lacks information concerning a material fact that is necessary to prevent it from being misleading (hereinafter in this paragraph referred to as "false information, etc."), it must not disclose the information on specified cryptoassets pertaining to that false information, etc., and must not handle that public offering or secondary distribution of specified cryptoassets, until amended specified cryptoasset information, etc. that resolves that false information, etc. is disclosed.

A specified cryptoasset issuer, a person that conducts a public offering or secondary distribution of specified cryptoassets, an underwriter of specified cryptoassets, a financial instruments business operator, or a financial instruments intermediary service provider (referred to as a "specified cryptoasset issuer, etc." in the following paragraph) must, when having others acquire or selling specified cryptoassets through a public offering or secondary distribution of specified cryptoassets subject to the application of the main clause of paragraph (1) or the main clause of paragraph (2) of the preceding Article, provide, pursuant to Cabinet Office Order, in advance or simultaneously, to the other party the information on specified cryptoassets to be disclosed under the main clause of paragraph (1) or the main clause of paragraph (2) of that Article concerning that public offering or secondary distribution of specified cryptoassets; provided, however, that this does not apply in the following cases:

a case of having a qualified institutional investor acquire the relevant specified cryptoassets or selling them to it (excluding a case where, by the time of having the relevant specified cryptoassets acquired or selling them through a public offering or secondary distribution of specified cryptoassets, the qualified institutional investor has requested the provision of that information on specified cryptoassets);

a case of having a person that holds the same issue of specified cryptoassets as the relevant specified cryptoassets and has consented to not receiving the provision of that information on specified cryptoassets acquire the relevant specified cryptoassets or selling them to that person (excluding a case where, by the time of having the relevant specified cryptoassets acquired or selling them through a public offering or secondary distribution of specified cryptoassets, the person that so consented has requested the provision of that information on specified cryptoassets).

In the case of the preceding paragraph, if a specified cryptoasset issuer, etc. comes to know that the information on specified cryptoassets contains false information regarding a material particular, lacks information about a material particular that is to be disclosed, or lacks information concerning a material fact that is necessary to prevent it from being misleading (hereinafter in this paragraph referred to as "false information, etc."), it must not provide the information on specified cryptoassets pertaining to that false information, etc., and must not have others acquire or sell specified cryptoassets through that public offering or secondary distribution of specified cryptoassets, until amended specified cryptoasset information, etc. that resolves that false information, etc. is disclosed.

A person that conducted a public offering or secondary distribution of specified cryptoassets in violation of the provisions of Article 27-39, paragraph (1) or (2) is liable to compensate a person that acquired or purchased the relevant specified cryptoassets in response to that public offering or secondary distribution of specified cryptoassets for the damage caused by that violation.

If information on specified cryptoassets contains false information regarding a material particular, lacks information about a material particular that is to be disclosed, or lacks information concerning a material fact that is necessary to prevent it from being misleading, the specified cryptoasset issuer that disclosed that information on specified cryptoassets is liable for compensation for damage to a person that acquired or purchased specified cryptoassets in response to the public offering or secondary distribution of specified cryptoassets pertaining to that information on specified cryptoassets; provided, however, that this does not apply if the person that acquired or purchased the relevant specified cryptoassets knew, at the time of the application for the acquisition or purchase, that the information was false or lacking.

The amount for which a person is liable to compensate under the provisions of the preceding Article is the amount obtained by deducting an amount set forth in either of the following items from the amount the claimant paid for the acquisition or purchase of the relevant specified cryptoassets:

the transaction value of the relevant specified cryptoassets at the time of claiming compensation for damage pursuant to the preceding Article (or, if there is no transaction value, their estimated disposal value at that time);

the disposal value of the relevant specified cryptoassets, if they were disposed of before the time of claiming compensation for damage pursuant to the preceding Article.

A specified cryptoasset issuer that is liable to compensate under the provisions of the preceding Article is not liable to compensate for all or part of the damage if it proves that all or part of the amount of the damage the claimant sustained was caused by circumstances other than a decline in the price of the relevant specified cryptoassets that would result from the information on specified cryptoassets containing false information regarding a material particular, lacking information about a material particular that is to be disclosed, or lacking information concerning a material fact that is necessary to prevent it from being misleading.

A claim for compensation under the provisions of Article 27-42 extinguishes by prescription in the following cases:

when the claim is not exercised for three years from the time when the claimant comes to know, or in exercise of reasonable care could have come to know, that the information on specified cryptoassets contains false information regarding a material particular, lacks information about a material particular that is to be disclosed, or lacks information concerning a material fact that is necessary to prevent it from being misleading (referred to as "false information, etc." in the following item); or

when the claim is not exercised for seven years from the time the relevant information on specified cryptoassets was disclosed (if a stay order for the disclosure of all or part of the relevant information on specified cryptoassets was issued under the provisions of Article 27-57, paragraph (2), the period from the day on which that stay order was issued until the day on which the amended specified cryptoasset information, etc. that resolves the relevant false information, etc. was disclosed based on an order to publish under the provisions of paragraph (1) of that Article is not counted).

If information on specified cryptoassets contains false information regarding a material particular, lacks information about a material particular that is to be disclosed, or lacks information concerning a material fact that is necessary to prevent it from being misleading, the following persons are liable to compensate a person that acquired or purchased specified cryptoassets in response to the public offering or secondary distribution of specified cryptoassets pertaining to that information on specified cryptoassets, for damage arising from the information being false or lacking; provided, however, that this does not apply if the person that acquired or purchased the relevant specified cryptoassets knew, at the time of the application for the acquisition or purchase, that the information was false or lacking:

if the specified cryptoasset issuer that disclosed that information on specified cryptoassets is a corporation or other organization, its director, accounting advisor, company auditor, executive officer, board member, or auditor, or a person equivalent thereto, at the time of that disclosure;

the holder of the specified cryptoassets pertaining to the relevant public offering or secondary distribution of specified cryptoassets (excluding the specified cryptoasset issuer of the relevant specified cryptoassets; or, if that holder purchased the specified cryptoassets from the person holding them under a contract providing for the public offering or secondary distribution of those specified cryptoassets, the other party to that contract);

a certified public accountant or audit corporation that, in the audit certification prescribed in Article 27-59, paragraph (1) pertaining to that information on specified cryptoassets, certified information pertaining to that audit certification that is false or lacking as not being false or lacking.

In the case of the preceding paragraph, a person set forth in each of the following items is not liable for the compensation prescribed in that paragraph if that person proves the particular set forth in the relevant item:

a person set forth in item (i) or (ii) of the preceding paragraph: it did not know, and in the exercise of reasonable care could not have known, that the information was false or lacking;

a person set forth in item (iii) of the preceding paragraph: it did not intentionally or negligently make the certification referred to in that item.

If information on specified cryptoassets, etc. (meaning the information on specified cryptoassets, etc. prescribed in Article 27-52, and including amended specified cryptoasset information, etc. pertaining to that information on specified cryptoassets, etc.; except in that Article, Article 27-54, paragraph (1), and Article 27-57, the same applies hereinafter in this Chapter) contains false information regarding a material particular, lacks information about a material particular that is to be disclosed, or lacks information concerning a material fact that is necessary to prevent it from being misleading, the specified cryptoasset issuer that disclosed that information on specified cryptoassets, etc. is liable to compensate a person that, while that information on specified cryptoassets, etc. was being disclosed under the provisions of Article 27-54, paragraph (1), acquired or purchased the specified cryptoassets pertaining to that information on specified cryptoassets, etc. (if that information on specified cryptoassets, etc. is information on specified cryptoassets, limited to a person that acquired or purchased them other than through the public offering or secondary distribution of specified cryptoassets pertaining to that information on specified cryptoassets) or disposed of them, for damage arising from the information being false or lacking (hereinafter referred to as "false information, etc." in this Article), to an extent not exceeding the amount calculated in accordance with the rule provided in Article 27-43, paragraph (1); provided, however, that this does not apply if the person that acquired or purchased, or disposed of, the relevant specified cryptoassets knew of the false information, etc. at the time of the acquisition, purchase, or disposal.

In the case referred to in the preceding paragraph, if the specified cryptoasset issuer that would be liable to compensate proves that it did not intentionally or negligently cause the false information, etc. in the relevant information on specified cryptoassets, etc., that issuer is not liable for the compensation under the provisions of that paragraph.

In the case referred to in the main clause of paragraph (1), if the existence of false information, etc. in the relevant information on specified cryptoassets, etc. is disclosed, a person that has acquired or purchased the relevant specified cryptoassets within the one year prior to the day of the disclosure of the existence of false information, etc. (hereinafter referred to as the "disclosure date" in this paragraph) and that continues to hold the specified cryptoassets on the disclosure date may assert the amount calculated by deducting the average transaction value (or, if there is no transaction value, the estimated disposal value; hereinafter the same applies in this paragraph) of the relevant specified cryptoassets during the one month after the disclosure date from the average transaction value of the relevant specified cryptoassets during the one month prior to the disclosure date, to be the amount of damage arising from the false information, etc. in the relevant information on specified cryptoassets, etc.

The term "disclosure of the existence of false information, etc." as used in the preceding paragraph means that the specified cryptoasset issuer that disclosed the relevant information on specified cryptoassets, etc. or a person that has authority under a law or regulation over the business or property of that specified cryptoasset issuer has taken measures, pursuant to Cabinet Office Order, to put the material particular to be disclosed that the false information, etc. in the relevant information on specified cryptoassets, etc. concerns, or the material fact necessary to prevent it from being misleading, into a form that allows a large number of persons to learn of it.

In the case referred to in paragraph (3), if the specified cryptoasset issuer that would be liable to compensate proves that the whole or part of the damage sustained by the claimant was due to circumstances other than the decline in the value of the relevant specified cryptoassets that could have arisen from the false information, etc. in the relevant information on specified cryptoassets, etc., that issuer is not liable for the whole or such part of the compensation.

In a case referred to in paragraph (3) other than one referred to in the preceding paragraph, if the court finds that the whole or part of the damage sustained by the claimant was due to circumstances other than the decline in the value of the relevant specified cryptoassets that could have arisen from the false information, etc. in the relevant information on specified cryptoassets, etc., but that it is extremely difficult to prove the amount of damage arising from such other circumstances due to the nature of that damage, the court may, based on the entire import of oral arguments and the results of an examination of evidence, determine an appropriate amount as the amount of damage for which there is no liability to compensate.

A claim for compensation under the provisions of the preceding Article extinguishes by prescription in the following cases:

when the claim is not exercised for two years from the time when the claimant comes to know, or in exercise of reasonable care could have come to know, that the information on specified cryptoassets, etc. contains false information regarding a material particular, lacks information about a material particular that is to be disclosed, or lacks information concerning a material fact that is necessary to prevent it from being misleading; or

when the claim is not exercised for five years from the time when the relevant information on specified cryptoassets, etc. was disclosed.

If information on specified cryptoassets, etc. contains false information regarding a material particular, lacks information about a material particular that is to be disclosed, or lacks information concerning a material fact that is necessary to prevent it from being misleading, the following persons are liable to compensate a person that, without knowing that the information on specified cryptoassets, etc. was false or lacking, acquired or purchased the specified cryptoassets pertaining to that information on specified cryptoassets, etc. (if that information on specified cryptoassets, etc. is information on specified cryptoassets, limited to a person that acquired or purchased them other than through the public offering or secondary distribution of specified cryptoassets pertaining to that information on specified cryptoassets) or disposed of them, for damage arising from that information on specified cryptoassets, etc. being false or lacking:

if the specified cryptoasset issuer that disclosed that information on specified cryptoassets, etc. is a corporation or other organization, its director, accounting advisor, company auditor, executive officer, board member, or auditor, or a person equivalent thereto, at the time of that disclosure;

a certified public accountant or audit corporation that, in the audit certification prescribed in Article 27-59, paragraph (1) pertaining to that information on specified cryptoassets, etc., certified information pertaining to that audit certification that is false or lacking as not being false or lacking.

The provisions of Article 27-45, paragraph (2) apply mutatis mutandis to a person that is liable to compensate under the provisions of the preceding paragraph. In this case, the phrase "the preceding paragraph" in paragraph (2) of that Article is deemed to be replaced with "Article 27-48, paragraph (1)", the phrase "item (i) or (ii) of the preceding paragraph" in item (i) of that paragraph is deemed to be replaced with "Article 27-48, paragraph (1), item (i)", and the phrase "item (iii) of the preceding paragraph" in item (ii) of that paragraph is deemed to be replaced with "Article 27-48, paragraph (1), item (ii)".

A person that conducts specified cryptoasset acquisition solicitation, etc. that falls under the case set forth in Article 2, paragraph (52), item (ii), (a) or (b) (for the case set forth in (b) of that item, limited to a case in which, by excluding a qualified institutional investor pursuant to the provisions of item (i) of that paragraph, the solicitation comes not to fall under the case set forth in that item) (for the case set forth in Article 2, paragraph (52), item (ii), (b), limited to one directed at a qualified institutional investor excluded pursuant to the provisions of item (i) of that paragraph; hereinafter in this Article referred to as "exclusive solicitation of specified cryptoassets to qualified institutional investors") must notify the other party of the fact that, because that exclusive solicitation of specified cryptoassets to qualified institutional investors falls under the case set forth in Article 2, paragraph (52), item (ii), (a) or (b), no disclosure of information on specified cryptoassets under the provisions of the main clause of Article 27-39, paragraph (1) has been made concerning that exclusive solicitation of specified cryptoassets to qualified institutional investors, and any other particulars specified by Cabinet Office Order; provided, however, that this does not apply in a case in which information has been disclosed regarding the specified cryptoassets pertaining to that exclusive solicitation of specified cryptoassets to qualified institutional investors (meaning a case in which the information has been disclosed as prescribed in Article 27-39, paragraph (3); the same applies in paragraph (3)), or in any other case specified by Cabinet Office Order.

A person that conducts exclusive solicitation of specified cryptoassets to qualified institutional investors that is subject to the main clause of the preceding paragraph must, when having others acquire or selling specified cryptoassets through that exclusive solicitation of specified cryptoassets to qualified institutional investors, provide to the other party, pursuant to Cabinet Office Order, in advance or simultaneously, information pertaining to the particulars to be notified under the provisions of that paragraph.

A person that conducts specified cryptoasset acquisition solicitation, etc. that falls under the case set forth in Article 2, paragraph (52), item (ii), (b) (excluding exclusive solicitation of specified cryptoassets to qualified institutional investors; hereinafter in this Article referred to as "solicitation of specified cryptoassets to a small number of investors") must notify the other party of the fact that, because that solicitation of specified cryptoassets to a small number of investors falls under the case set forth in Article 2, paragraph (52), item (ii), (b), no disclosure of information on specified cryptoassets under the provisions of the main clause of Article 27-39, paragraph (1) has been made concerning that solicitation of specified cryptoassets to a small number of investors, and any other particulars specified by Cabinet Office Order; provided, however, that this does not apply in a case in which information has been disclosed regarding the specified cryptoassets pertaining to that solicitation of specified cryptoassets to a small number of investors, or in any other case specified by Cabinet Office Order.

A person that conducts solicitation of specified cryptoassets to a small number of investors that is subject to the main clause of the preceding paragraph must, when having others acquire or selling specified cryptoassets through that solicitation of specified cryptoassets to a small number of investors, provide to the other party, pursuant to Cabinet Office Order, in advance or simultaneously, information pertaining to the particulars to be notified under the provisions of that paragraph.

A specified cryptoasset issuer must, if the specified cryptoassets of that specified cryptoasset issuer fall under specified cryptoassets that were subject to the application of the main clause of Article 27-39, paragraph (1) or the main clause of Article 27-39, paragraph (2) with regard to a public offering or secondary distribution of specified cryptoassets, disclose, pursuant to Cabinet Office Order, for each business year (or, where the specified cryptoasset issuer is a person other than a company or in any other case specified by Cabinet Office Order, for a period specified by Cabinet Office Order; the same applies in Article 172-16, paragraph (1) and Article 185-7, paragraph (42)), the information set forth in Article 27-39, paragraph (1), items (i) and (iii) within three months after the end of that business year (or, if it is found that it cannot be disclosed within that period due to unavoidable reasons, within a period approved in advance by the Prime Minister pursuant to Cabinet Office Order); provided, however, that this does not apply if, pursuant to Cabinet Office Order, in consideration of the transferability of those specified cryptoassets and other circumstances, it has obtained the approval of the Prime Minister that this does not damage the public interest or result in insufficient investor protection.

When the Prime Minister has granted the approval under the proviso to the preceding paragraph, the Prime Minister must disclose that fact pursuant to Cabinet Office Order.

A specified cryptoasset issuer that must disclose periodic information on specified cryptoassets (meaning the information that must be disclosed pursuant to the provisions of paragraph (1) of the preceding Article; the same applies hereinafter) must, when it comes to fall under a case specified by Cabinet Office Order as necessary and appropriate in the public interest or for investor protection, promptly disclose, pursuant to Cabinet Office Order, information on the content thereof (hereinafter referred to as "extraordinary information on specified cryptoassets").

A specified cryptoasset issuer that has disclosed information on specified cryptoassets, periodic information on specified cryptoassets, or extraordinary information on specified cryptoassets (hereinafter referred to as "information on specified cryptoassets, etc.") must, if there is a particular to be amended in the relevant information on specified cryptoassets, etc. during the period prescribed in Article 27-54, paragraph (1), disclose, pursuant to Cabinet Office Order, information to the effect that it is amended (hereinafter referred to as "amended specified cryptoasset information, etc.").

A financial instruments business operator must, when it intends to newly conduct services for purchase and sale, etc. of cryptoassets for specified cryptoassets of a given issue (limited to those that fall under the case set forth in Article 27-39, paragraph (3), item (i)), disclose in advance, pursuant to Cabinet Office Order, all the information on specified cryptoassets, etc. pertaining to the relevant specified cryptoassets that is being continuously disclosed pursuant to the provisions of paragraph (1) of the following Article (excluding the information on specified cryptoassets that the financial instruments business operator discloses pursuant to the provisions of Article 27-39, paragraph (4)). In this case, if a financial instruments business operator comes to know that the information on specified cryptoassets, etc. to be disclosed contains false information regarding a material particular, lacks information about a material particular that is to be disclosed, or lacks information concerning a material fact that is necessary to prevent it from being misleading (hereinafter in this paragraph and paragraph (4) referred to as "false information, etc."), it must not disclose the information on specified cryptoassets, etc. pertaining to that false information, etc., and must not commence services for purchase and sale, etc. of cryptoassets for the relevant specified cryptoassets, until amended specified cryptoasset information, etc. that resolves that false information, etc. is disclosed.

When information on specified cryptoassets has been disclosed under the provisions of the main clause of Article 27-39, paragraph (1) or the main clause of Article 27-39, paragraph (2) for specified cryptoassets for which a financial instruments business operator is conducting services for purchase and sale, etc. of cryptoassets (excluding those that fall under the case set forth in Article 27-39, paragraph (3), item (i)), the financial instruments business operator must, except where it discloses that information on specified cryptoassets pursuant to the provisions of Article 27-39, paragraph (4), disclose that information on specified cryptoassets, pursuant to Cabinet Office Order, within the period specified by Cabinet Office Order counting from the day on which that information on specified cryptoassets was disclosed under the provisions of the main clause of Article 27-39, paragraph (1) or the main clause of Article 27-39, paragraph (2).

A financial instruments business operator referred to in the preceding two paragraphs must, when the specified cryptoasset issuer that disclosed the information on specified cryptoassets, etc. referred to in the preceding two paragraphs has newly disclosed information on specified cryptoassets, etc. regarding the specified cryptoassets pertaining to that information on specified cryptoassets, etc., except where it discloses that information on specified cryptoassets, etc. pursuant to the provisions of Article 27-39, paragraph (4), disclose that information on specified cryptoassets, etc., pursuant to Cabinet Office Order, within the period specified by Cabinet Office Order counting from the day on which that specified cryptoasset issuer disclosed that information on specified cryptoassets, etc.; provided, however, that this does not apply if that financial instruments business operator has discontinued the services for purchase and sale, etc. of cryptoassets for the relevant specified cryptoassets, or in any other case specified by Cabinet Office Order.

In the case of the preceding two paragraphs, if a financial instruments business operator comes to know that there is false information, etc. in the information on specified cryptoassets, etc. to be disclosed, it must not, notwithstanding the provisions of the preceding two paragraphs, disclose the information on specified cryptoassets, etc. pertaining to that false information, etc., until amended specified cryptoasset information, etc. that resolves that false information, etc. is disclosed.

A specified cryptoasset issuer that has disclosed information on specified cryptoassets, etc. must, pursuant to Cabinet Office Order, continuously disclose that information on specified cryptoassets, etc. (including amended specified cryptoasset information, etc. pertaining to that information on specified cryptoassets, etc.) until the day on which five years elapse from the day on which it disclosed that information on specified cryptoassets, etc. (or, in a case specified by Cabinet Office Order as one in which it is found that this does not damage the public interest or result in insufficient investor protection, for the period specified by Cabinet Office Order).

A financial instruments business operator that has disclosed information on specified cryptoassets, etc. pursuant to the provisions of Article 27-39, paragraph (4) or paragraphs (1) through (3) of the preceding Article must, pursuant to Cabinet Office Order, continuously disclose that information on specified cryptoassets, etc. until the day on which the period prescribed in the preceding paragraph elapses (or, in a case specified by Cabinet Office Order as one in which it is found that this does not damage the public interest or result in insufficient investor protection, for the period specified by Cabinet Office Order).

A financial instruments business operator prescribed in the preceding paragraph must, if it comes to know that the information on specified cryptoassets, etc. to be continuously disclosed under the provisions of that paragraph contains false information regarding a material particular, lacks information about a material particular that is to be disclosed, or lacks information concerning a material fact that is necessary to prevent it from being misleading (hereinafter in this paragraph referred to as "false information, etc."), suspend, notwithstanding the provisions of the preceding paragraph, the disclosure of the information on specified cryptoassets, etc. pertaining to that false information, etc., until amended specified cryptoasset information, etc. that resolves that false information, etc. is disclosed.

A specified cryptoasset issuer must, when it has disclosed information on specified cryptoassets, etc., notify the Prime Minister of that information on specified cryptoassets, etc., pursuant to Cabinet Office Order, within the period specified by Cabinet Office Order counting from the day on which it disclosed that information on specified cryptoassets, etc.

If a specified cryptoasset issuer has had another person succeed to the authority to issue specified cryptoassets (for a specified cryptoasset specified by Cabinet Office Order under Article 2, paragraph (50), the authority specified by Cabinet Office Order), the successor that has succeeded to that authority succeeds to the predecessor's obligation to disclose periodic information on specified cryptoassets under the provisions of Article 27-50, paragraph (1) regarding those specified cryptoassets.

A successor that has succeeded to the obligation to disclose periodic information on specified cryptoassets pursuant to the provisions of the preceding paragraph must promptly notify the Prime Minister to that effect.