TERMS OF BUSINESS

FIAT, Virtual Currencies, Tokens and CFD Trade

An off-the-shelf solution allowing the launch of a new trading platform from scratch.

Automated purchase/sale of virtual currencies, tokens, as well as purchase and sale for fiat money and CFD trading on virtual currencies.

CASH ACCOUNTS

TOB CA 2018 / 01

 

These Terms of Business (the “TOB”) form an integral part of the Customers Agreement and govern all transactions with regard to the processing and execution of Customer's orders on the Cash Accounts within the Exchange Platform between Kinetic Revolution Ltd (hereinafter referred to as "Company" or “we”) and any individual or legal entity or other corporate body (hereinafter referred to as "Customer" or “You”) who has completed the application to open a Cash Account.

 

Your consent acknowledges that You have carefully read, in its entirety, and understood these Terms of

Business and Customer Agreement, and that You agree to all of the provisions contained therein.

 

CONTENTS

 

  1. 1. COMMON TERMS .....................................................................................................................................

 

  1. 2. CALCULATION OF ASSET VALUES FOR EXCHANGE TRANSACTIONS ..........................................

 

  1. 3. EXCHANGE FEE .......................................................................................................................................

 

  1. 4. ASSETS .....................................................................................................................................................

 

  1. 5. BLOCKING CERTAIN AMOUNTS OF ASSETS FOR PENDING ORDER EXECUTION ........................

 

  1. 6. EXCHANGE RATE ....................................................................................................................................

 

  1. 7. ROUNDING RULES ...................................................................................................................................

 

  1. 8. EXCHANGE ORDER .................................................................................................................................

 

  1. 9. COMMUNICATIONS ..................................................................................................................................

 

  1. 10. DISPUTE RESOLUTION ...........................................................................................................................

 

  1. 1. COMMON TERMS

 

1.1.      The Exchange Platform Cash Accounts is a software technology designed for exchanging assets. It allows the Customer to place an order to exchange a certain amount of one Asset owned by Customer for a specific amount of another Asset determined by the Customer. The essence of this service is to give a Customer the opportunity to exchange his/her Assets for other Customers' Assets according to the rules of www.kineticex.com (hereinafter – the “Exchange Service”). Among other features, the Exchange Service offers the Customer an opportunity to view all active asset exchange orders placed by other Customers.

 

1.2.      The Exchange Platform software solution includes the following features:

 

1.2.1.The system of Asset Subaccounts, designed to maintain a separate record of each Asset.

 

1.2.2.The Asset Exchange Service functionality allows the user to view the history of all exchange transactions made in the Cash Account (in the form of graphs or tables) and perform technical analysis for each pair of Assets.

 

1.2.3.Full information on the active exchange offers. Freezing and releasing certain amounts of Assets to ensure unconditional execution of pending exchange orders.

 

1.2.4.Statements reflecting transactions related to each particular Asset for a selected period of time are available in different formats.

 

1.3.      The Customer has the right to:

 

1.3.1.exchange any Assets using the Exchange Platform;

 

1.3.2.perform non-exchange transactions via the Customer's Personal Area (My Kineticex Area) of the Exchange Platform web-site;

 

1.3.3.control Customer’s Assets;

 

1.3.4.discontinue the use of the Cash Account and Exchange Platform;

 

1.3.5.receive the information about exchange offers placed by other customers;

 

1.3.6. revoke Assets provided that a specific amount of Asset has been frozen (if necessary) to ensure unconditional execution of pending orders.

 

1.4.      The number of Cash Accounts is not limited. The number of Subaccounts is not limited.

 

  1. 2. CALCULATION OF ASSET VALUES FOR EXCHANGE TRANSACTIONS

 

2.1.      The Ask price is used for a "buy" Transaction. The Bid price is used for a "sell" Transaction.

 

2.2.      Transaction BUY X/Y. When executing the transaction BUY X/Y, Asset Y is exchanged for Asset X at the exchange rate Rate X/Y (ASK), available in the terminal at the time of transaction. As the result, the values of balances expressed in Assets X and Y in the Customer’s Cash account change. The Company uses the formulas below to calculate the values by which the balances have changed (without Exchange fees):

 

Asset X new = Asset X prev. + Vol. Filled X

Asset Y new = Asset Y prev. - Vol. Filled X * Rate X/Y Filled, where

Asset X new, Asset Y new – the volumes of Assets X and Y respectively, after the execution of the transaction.

Asset X prev., Asset Y prev. – the volumes of Assets X and Y respectively, before the execution of the transaction.

Vol. Filled X – the volume of Asset X, which is the object of exchange in this case.

Rate X/Y Filled – the exchange rate of the selected Pair of Assets that are the object of exchange.

 

Example:

X/Y - BTCUSD

Asset X prev. = 2.22222, Asset Y prev. = 777.77

Vol. Filled X = 0.1

Rate X/Y Filled = 229.496

Asset X new = 2.22222 + 0.1 = 2.32222 (BTC)

Asset Y new = 777.77 - 0.1 * 229.496 = 777.77 - 22.95 = 754.82 (USD)

 

2.3.      Transaction SELL X/Y. When executing the transaction SELL X/Y, Asset X is exchanged for Asset Y at the exchange rate Rate X/Y (BID), which is available in the Terminal at the time of transaction. As the result, the values of balances expressed in Assets X and Y in the Customer’s Account change. The Company uses the formulas below to calculate the values by which the balances have changed (not including Exchange fee):

 

Asset X new = Asset X prev. - Vol. Filled X

Asset Y new = Asset Y prev. + Vol. Filled X * Rate X/Y Filled,

 

Example:

X/Y - BTCUSD

Asset X prev. = 2.22222 Asset Y prev. = 777.77

Vol. Filled X = 0.1

Rate X/Y Filled = 227.502

Asset X new = 2.22222 - 0.1 = 2.12222 (BTC)

Asset Y new = 777.77 + 0.1 * 227.502 =777.77 + 22.76 = 800.53 (USD)

 

When calculating Assets for pending orders the values Vol. Requested X, Rate X/Y Requested are used.

 

  1. 3. EXCHANGE FEE

 

3.1.      Exchange Fee is the commission charged by the Exchange Service for making exchange transactions available to Customers. The calculation of Exchange Fee is based on the amount of Asset being exchanged. Exchange Fee always has a negative value and it decreases the amount of Asset received by the party as the result of the transaction. The Company uses the following formula to calculate Exchange Fee (Commission):

 

3.1.1.Exchange Fee for transaction BUY X/Y

 

Commission (Buy X/Y) = Vol. Filled X * K com

 

3.1.2.Exchange Fee for transaction SELL X/Y

 

Commission (Sell X/Y) = Vol. Filled X * Rate X/Y Filled * K com,

 

Where K com – Exchange Fee coefficient (When Commission = 2%, K com = 0.02).

 

3.2.      To calculate the values of Exchange Fee for pending orders the values Vol. Requested X, Rate X/Y Requested are used.

 

  1. 4. ASSETS

 

4.1.      An Asset - is a parameter used to determine the volume of Fiat of Crypto currency owned by the

Customer.

 

4.2.      The Company calculates the values of Assets owned by the Customer after each exchange transaction or a balance operation.

 

4.3.      Asset calculation for transaction BUY X/Y:

 

Asset X = Asset X new - Commission (Buy X/Y) Asset Y = - Asset Y new

4.4.      Asset calculation for transaction SELL X/Y:

 

Asset X = - Asset X new

 

Asset Y = Asset Y new - Commission (Sell X/Y)

 

4.5.      For Deposits and Withdrawals of Assets respectively:

 

Asset X = Asset X + Deposit – Withdrawal

 

  1. 5. BLOCKING CERTAIN AMOUNTS OF ASSETS FOR PENDING ORDER EXECUTION

 

5.1.      To ensure the execution of a transaction, the Exchange Service freezes the full amount of Asset

intended for exchange in the Customer’s Account.

 

5.2.      Calculating the value of Asset frozen for transaction BUY X/Y:

 

Asset Y = Volume X Requested * Rate X/Y Requested

 

5.3.      Asset calculation for transaction SELL X/Y:

 

Asset X = Volume X Requested,

 

Where Volume Requested X – the volume of Asset indicated in the order.

 

  1. 6. EXCHANGE RATE

 

6.1.      If the value of the order exceeds the amount of Asset available at the best price, the Company calculates the weighted average exchange rate based on the Level 2 liquidity.

 

For example: If order Sell X/Y with Volume X Requested = 51 has been executed using the available the Level

2 liquidity, as shown below,

 

The Best price 213.150 – Vol 12.47

 

213.120 – Vol 38.02

 

213.100 – Vol 2.7,

 

Rate X/Y Filled is calculated using the following weighted average value:

 

Rate X/Y Filled = (12.47*213.150 + 38.02*213.120 + 0.51*213.100) / (12.47 + 38.02 + 0.51)

 

  1. 7. ROUNDING RULES

 

7.1.      The following rounding rules apply:

 

If:

X – the first Asset in the Symbol

Y – the second Asset in the Symbol

The minimum tradable volume - 0.01 lot (expressed in X - the first Asset in the Symbol) K – Fee coefficient

Rate X/Y – Exchange Rate

Vol. X, Vol. Y – Asset Volumes

Vol. Filled (X) – the volume of the executed Exchange Order

 

Rate X/Y Filled – the Exchange Rate at which the Order has been executed

Com. Rounded – Commission - Rounded Fee - Fee

Rounding rules – rounding upward. For example: $12.3417 => $12.35, BTC 0.07865309286 => BTC 0.07865310

Rounding Rules – rounding downward. For example: $12.3417 => $12.34, BTC 0.07865309286

=> BTC 0.07865309

 

7.2.      Rounding rule for the Orders tab.

 

Client ordered: Vol. X, Rate X/Y System calculates and rounds:

Volume Y = (Vol. X * Rate X/Y) round up to min decimal number for Y

For BUY: Com. rounded (X) = (Vol. X / 100 * K) round up to min decimal number for X (put in tab with minus sign)

For SELL: Com. rounded (Y) = (Vol. Y / 100 * K) round up to min decimal number for Y (put in tab with

minus sign)

 

X/Y (BTCUSD)

Vol. X

Vol. Y

Rate X/Y

Commission (1%)

Locked Vol.

BUY

0.03

10.42068         =>

10.43

347.356

-0.0003 BTC

10.43 USD

SELL

0.03

10.42068         =>

10.43

347.356

-0.1042068    =>    -0.11

USD

0.03 BTC

 

7.3.      For History and Assets History tabs.

 

System calculates and rounds:

For Buy:

  1. 1. Asset II (Y) = (Vol. Filled (X) * Rate X/Y Filled) round up to min decimal number for Y (put in tab with minus sign)
  2. 2. Com. rounded (X) = (Vol. Filled (X) / 100 * K) round up to min decimal number for X (put in tab with minus sign)
  3. 3. Asset I (X) = (Vol. Filled (X) – Com. Rounded (X)) (put in tab with plus sign)

For SELL:

  1. 1. Asset I (X) = Vol. Filled (X) (put in tab with minus sign)
  2. 2. Com. rounded (Y) = (Vol. Filled (X) * Rate X/Y Filled / 100 * K) round up to min decimal number for

Y (put in tab with minus sign)

  1. 3. Asset II (Y) = ((Vol. Filled (X) * Rate X/Y Filled) round up to min decimal number for Y - Com. rounded (Y)) (put in tab with plus sign)

 

X/Y (BTCUSD)

Vol.     Filled

(X)

Rate          X/Y Filled

Commission

Asset I

Asset II

BUY

0.03

347.356

-0.0003 BTC

0.0297

BTC

-10.42068   =>   -10.43

USD

SELL

0.03

347.356

-0.104207    =>    -0.11

USD

-0.03 BTC

10.32 USD

 

 

  1. 8. EXCHANGE ORDER

 

8.1.      All orders that are currently in the Exchange Platform are displayed in Level 2 trading panel of the Exchange Platform web terminal though the visible Depth of the Level 2 is defined by the web terminal Customer’s Settings. Level 2 includes the following additional information:

 

8.1.1.Highest Bid prices: the highest prices that the customers are willing to accept to sell;

 

8.1.2.Bid Volumes: the amount in Lots/Millions that are available at each of the highest Bid prices.

 

8.1.3.Lowest Ask prices: the lowest prices that the customers are willing to accept to buy.

 

8.1.4.Ask Volumes: the amount in Lots/Millions that are available at each of the lowest Ask prices.

 

8.1.5.The number of market depth “levels” displaying the lowest Ask and the highest Bid prices is

specified at the Company’s website  www.kineticex.com.

 

8.2.      To place a Cash Account Order (hereinafter – the “Order”), the Customer should identify the following:

 

8.2.1.Symbol from the list of available Symbols to exchange on the Exchange Platform. For the

purposes of this TOB the term “Symbol” shall mean the particular Asset Pair;

 

8.2.2.Transaction Volume.

 

8.3.      The Exchange Platform will automatically check whether there are enough available funds on the

Asset Subaccount the Customer wish to sell.

 

8.4.      Calculation occurs as follows: Available funds = Total funds - Locked funds.

 

8.5.      If the result is positive and sufficient for the indicated transaction volume, the order will be placed and the volume of the selling Asset will be locked on the respective Subaccount.

 

8.6.      Each Order has its own Order Number in the Exchange Platform.

 

8.7.      The process of placing of an Order is followed by the relevant record in the Exchange Platform Log

File.

 

8.8.      The Customer may delete (cancel) or modify the Order until it is not filled, i.e. matched with one or

more other customers’ orders.

 

8.9.      Modification is possible only in respect of the Order price, expiration date/time and comment.

 

8.10.    The Company executes Orders of the Customers at the Exchange Platform by a technology that automatically matches buy and sell orders of incoming prices generated by the Customers, i.e. the Customers may participate in the Exchange Platform as price-takers and/or price-givers.

 

8.11.    There are two types of orders available on the Exchange Platform to enter into transaction: Market

Order and pending Limit Order (Buy Limit and Sell Limit):

 

8.11.1. “Market Order” – is used to buy or sell an Asset at the best available current price. Execution of the Market Order occurs immediately at the available volume at current prices. However, the price at which a Market Order will be executed is not guaranteed and can differ from the currently displayed quote but will not be worse than the worst price in the Level 2 at the moment of order placing. Placing a Market Order, the Customer participates as price-taker.

 

8.11.2. “Limit Order” - is a pending order to buy or sell a Asset at a specified price or better. Placing a

Limit Order, the Customer participates as either price giver or price-taker:

 

  • "Buy Limit" - to open a Long Position at the price lower than the current price;

 

  • "Sell Limit" - to open a Short Position at the price higher than the current price.

 

8.12.    The Order’s execution result (price, volume, financial result, duration) depends on the quality of the

connection.

 

8.13.    Execution occurs at the volume and current prices available at the moment and displayed in the

Exchange Platform.

 

8.14.    The Limit Order is placed in the queue in order to be executed according to the FIFO method in the following cases:

 

8.14.1. The Buy Limit is placed in the queue in order to be executed if the Best Ask price in the Quotes

Flow becomes equal or lower than the Order Level;

 

8.14.2. The Sell Limit is placed in the queue in order to be executed if the Best Bid price in the Quotes

Flow becomes equal or higher than the Order Level;

 

8.15.    Buy Limit and Sell Limit are executed at the Order level or better. A Buy Limit order can only be executed at the limit price or lower, and a Sell Limit order can only be executed at the limit price or higher. During periods of high volatility or low liquidity Limit Orders could be partially executed - meaning that Orders would open all size available as it becomes available resulting in multiple transactions versus one whole transaction.

 

8.16.    The Customer may place, modify or delete (cancel) an Orders within 24/7 period.

 

8.17.    The Company may reject, cancel, delete or adjust all types of Orders or block Your Cash Account, under the circumstances listed below:

 

8.17.1. The Customer has insufficient available funds on the particular Subaccount;

 

8.17.2. As a result of any of the conditions listed in the clause 11 of the Customer Agreement.

 

8.18.    Subject any of the above appears the Company will notify the Customer including but not limited to by the following massages:

 

8.18.1. “Rejected” in respect of the particular transaction, will be accompanied with the reasons for rejection;

 

8.18.2. “Your account is “read only”;

 

8.18.3. “Your account is blocked” – message will appear on the Exchange Platform Terminal when logging on.

 

 

  1. 9. COMMUNICATIONS

 

9.1.      In order to communicate with the Customer, the Company may use:

 

  • Exchange Platform internal mail;
  • E-mail;
  • Fax;
  • Telephone;
  • Post;
  • Company Webpage News Section;

 

9.2.      All the Company’s notifications to the Customer referring to Dispute resolutions shall be made on the Customer’s registered e-mail indicated by the Customer during the account opening process or via Exchange Platform internal mail. The Customer is considered to be duly informed immediately upon sending the notification by the Company. The Company’s Exchange Platform Server log files are sufficient and indisputable evidence of notification send.

 

9.3.      The following Instructions are accepted only through Exchange Platform:

 

  • To place an Order;
  • To delete (cancel) or modify an Order.

 

9.4.      Any telephone conversation between the Customer and the Company may be recorded.

 

  1. 10. DISPUTE RESOLUTION

 

10.1.    If any conflict situation arises when the Customer reasonably believes that the Company, as a result of any action or failure to act, breaches one or more provisions of these Terms of Business, the Customer has the right to file a complaint with the Company within one Business Day after the grievance has arisen.

 

10.2.    Any complaints or disputes relating to operation of the Cash Account (issues concerning orders execution, deposit and/or withdrawal of funds and similar – collectively “Complaints”) must be made via electronic mail to the following address:  compliance@kineticex.com

 

10.3.    A complaint shall include:

 

  • Full name of the Customer;
  • Customer's login;
  • Order(s) number(s);
  • Details of the conflict;
  • Description of the conflict situation supported by screenshots.

 

10.4.    If the Exchange Platform Log-File has not recorded the relevant information to which the Customer refers, the argument based on this reference may not be considered.

 

10.5.    The Company will resolve all Disputes considering the nature of the Dispute.

 

10.6.    The Company has the right to choose the method of Dispute resolution at its sole discretion.

 

10.7.    Both the Company and the Customer have the right to initiate the process of Dispute resolution.

 

10.8.    No complaints are accepted if the Customer is not able to place or modify any Order:

 

10.8.1. Because the Internet connection is poor either on the side of the Customer or the Company or both;

 

10.8.2. As a result of the failure of the Exchange Platform software/hardware and the Exchange

Platform Log-File has no record to prove that Customer sent instruction;

 

10.8.3. For other reasons specified in Company’s Complaints Policy.

 

10.9.    During the Dispute process, the Customer acknowledges that no changes may be made on the order(s) that are being investigated.

 

10.10.  Unless expressly set forth otherwise by an applicable law and/or regulation, the Company’s decision

with respect to a Complaint shall be final and binding and shall not be subject to any appeal.