Financial Instruments and Exchange Act

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.