Terms and Conditions for AltMarket, Inc.

Introduction

This document embodies AltMarket’s ongoing corporate commitment to free, fair, and transparent markets for all participants for not only the benefit of cryptocurrency, but for an ongoing patronage of the arts. In pursuit of AltMarket’s vision of an alternative financial system fueled by artistic creation and imagination free from manipulation and fraud, we are pleased to provide an experience of unprecedented transparency into the operation of our platform. We hope that it sets a standard which the entire industry shall rise to meet.

These Terms will be applied fully and affect to your use of this Website. By using this Website, you agreed to accept all terms and conditions written in here. You must not use this Website if you disagree with any of these Website Standard Terms and Conditions.

Minors or people below 13 years old are not allowed to use this Website.

Selection of Assets

The selection of assets to be traded and the base asset against which they are traded are important facets of how AltMarket addresses issues of market transparency and fairness.

AltMarket does not offer for trading those assets which are deemed securities.

True Cryptocurrencies

Base trading pair: BTC or USD

  • A true cryptocurrency must be in operation for at least two years prior to being
  • considered for listing.
  • If it is a proof of work cryptocurrency it must have sufficient hash power for its algorithm so that it will not be prone to vandalism or double spends.
  • It must have an active development team, preferably not just the founders.
  • Token distribution is expected to be somewhat concentrated, however no less than 70% of tokens in circulation must exist outside of exchange wallets.
  • AltMarket reserves the right to determine if a given token is within regulatory compliance as a blockchain commodity.

Exchange Tokens

Base trading pair: ETH or USD

  • Exchange tokens are those tokens launched by other cryptocurrency exchanges in order to facilitate their operation.
  • An exchange must meet the regulatory requirements for the geographic location in which they are domiciled.
  • The exchange must be in operation for no less than six months, and have an identifiable management team.

Icon Tokens

Base trading pair: TAO

  • Icon tokens (formerly referred to as Initial Artist Offerings) are cryptographic collectible merchandise bearing the likeness of a celebrity or popular figure.
  • Icon tokens are issued and maintained by AltMarket under contract with the rights holder of the brand to be employed.

Non-Native Entertainment Industry Tokens

Base trading pair: TAO

  • Tokens which bear the likeness of a celebrity, other licensed trademark, or copyrighted material must be able to provide a copy of an enforceable rights assignment letter which authorizes the issuer to use that likeness
  • Token issuers must be registered with FinCEN as money transmitters.
  • Tokens must be a product and not be for the purposes of capital formation.
  • AltMarket reserves the right to determine if a given token is within regulatory compliance as a blockchain commodity.

Icon Tokens

Icon tokens are limited issue cryptographic collectibles which bear the likeness of a celebrity or popular figure. Icon tokens are issued exclusively by AltMarket and may not be traded on other venues without explicit permission.

Icon tokens are issued solely as collectible merchandise and not as speculative instruments or for the purposes of capital formation: the intrinsic value of the token relies solely with the brand associated with it and no guarantees of value or appreciation are neither expressed nor implied.

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Sale Process

Icon tokens will be offered for sale in a process known as an Initial Artist Offering (IAO) in order to make the initial sale of the token distinct from secondary market trading. The IAO will be conducted on the AltMarket platform and full terms and conditions of each sale will be presented for each IAO being offered. Those entities which operate the brand represented in the token may or may not choose to offer special incentives similar to membership benefits, to be disclosed at the time of sale.

  • An IAO will be promoted to the public for participation for 30-90 days prior to the start of the sale.
  • Participation in an IAO sale requires an individual to have an active AltMarket account in good standing and to have completed all AML/KYC procedures.
  • Terms of the sale shall be expressed in plain, common English, with assistive infographics when necessary.
  • The stated price per token will be clearly presented to the user at the time of sale.
  • The price of the token is established at the start of the sale and does not change.
  • There are no maximum number of tokens to be sold unless otherwise specified.
  • Sales will have a fixed time period in which they will be offered. Once the time period expires no further tokens will be issued.
  • Purchased tokens shall not be made available until the sale has concluded.
    • Users shall be informed prior to sale that their tokens may not be immediately available.
    • Users shall be informed via email when their tokens have been made available.
    • Users shall have the facility to view all tokens purchased but not yet delivered.
  • AltMarket employees may not participate in IAOs.
  • No rights to content or monies generated by the artist are either expressed nor implied.

Non-Public Information

AltMarket is occasionally privy to non-public information regarding various assets. It is AltMarket corporate policy that employees found to be disclosing NPI may be subject to disciplinary actions, immediate termination, or both.

AltMarket does not provide third party access to NPI under any circumstances.

Upon the leak of NPI, AltMarket shall conduct an internal investigation and publicly disclose the results with all actions taken on the AltMarket website.

Fee Auction

AltMarket will hold regular public auctions at Sotheby’s Los Angeles (2029 Century Park E #2950, Los Angeles, CA 90067) for the purposes of liquidating those commodity assets which have been collected as fees. Asset lots will be determined at the time of auction.

Security

Fiat Custody

Consumer banking information is stored on PCI compliant capable servers with strict IP-level access controls and without access to the Internet. The custody of fiat funds is provided by JP Morgan Chase, N.A.

Cryptocurrency

Hot Wallet

Hot wallets consist of multi-part private keys which are never exposed to the Internet. Transactions are submitted to an IP-access restricted “signing server” which returns a signed transaction suitable for submission to the cryptocurrency network.

Cold Wallet

Cold wallets consist of a multi-part private key which is never exposed to the Internet which allows for the secured storage of cryptocurrencies. Private keys themselves are stored offsite at an unspecified, secured location.

AML/KYC

AltMarket is designed to create an open, transparent financial system which serves a diverse set of consumers. Our anti-money laundering and know-your-customer procedures are very flexible to fit the needs of our users.

Anti-Money Laundering Policy

It is the policy of AltMarket promote an open, transparent financial system as well as to prohibit and actively prevent money laundering and any activity that facilitates money laundering or the funding of terrorist or criminal activities. Money laundering is generally defined as engaging in acts designed to conceal or disguise the true origins of criminally derived proceeds so that the proceeds appear to have derived from legitimate origins or constitute legitimate assets. Generally, money laundering occurs in three stages. Cash first enters the financial system at the "placement" stage, where the cash generated from criminal activities is converted into monetary instruments, such as cryptocurrency, or deposited into accounts at financial institutions. At the "layering" stage, the funds are transferred or moved into other accounts or other financial institutions to further separate the money from its criminal origin. At the "integration" stage, the funds are reintroduced into the economy and used to purchase legitimate assets or to fund other criminal activities or legitimate businesses.

Cash is often deposited into AltMarket accounts, and the cryptocurrency industry is unique in that it can be used to launder funds obtained elsewhere, and to generate illicit funds within the industry itself through fraudulent activities. Examples of types of fraudulent activities include insider trading, market manipulation, ponzi schemes, cybercrime and other investment-related fraudulent activity.

Terrorist financing may not involve the proceeds of criminal conduct, but rather an attempt to conceal either the origin of the funds or their intended use, which could be for criminal purposes. Legitimate sources of funds are a key difference between terrorist financiers and traditional criminal organizations. In addition to charitable donations, legitimate sources include foreign government sponsors, business ownership and personal employment. Although the motivation differs between traditional money launderers and terrorist financiers, the actual methods used to fund terrorist operations can be the same as or similar to methods used by other criminals to launder funds. Funding for terrorist attacks does not always require large sums of money and the associated transactions may not be complex.

Our AML policies, procedures and internal controls are designed to ensure compliance with all applicable BSA regulations and FINRA rules and will be reviewed and updated on a regular basis to ensure appropriate policies, procedures and internal controls are in place to account for both changes in regulations and changes in our business.

Anti-Money Laundering Compliance Person

The firm has designated Kamal Hubbard as its Anti-Money Laundering Program Compliance Person (AML Compliance Person), with full responsibility for the firm’s AML program. Mr. Hubbard has a working knowledge of the BSA and its implementing regulations and is qualified by experience, knowledge and training, including certification as a fraud examiner. The duties of the AML Compliance Person will include monitoring the firm’s compliance with AML obligations, overseeing communication and training for employees. The AML Compliance Person will also ensure that the firm keeps and maintains all of the required AML records and will ensure that Suspicious Activity Reports (SARs) are filed with the Financial Crimes Enforcement Network (FinCEN) when appropriate. The AML Compliance Person is vested with full responsibility and authority to enforce the firm’s AML program.

The firm will provide FINRA with contact information for the AML Compliance Person through the FINRA Contact System (FCS), including: (1) name; (2) title; (3) mailing address; (4) email address; (5) telephone number; and (6) facsimile (if any). The firm will promptly notify FINRA of any change in this information through FCS and will review, and if necessary update, this information within 17 business days after the end of each calendar year. The annual review of FCS information will be conducted by Kamal Hubbard and will be completed with all necessary updates being provided no later than 17 business days following the end of each calendar year. In addition, if there is any change to the information, Kamal Hubbard will update the information promptly, but in any event not later than 30 days following the change.

Providing Information to Law Enforcement

We will respond to a Financial Crimes Enforcement Network (FinCEN) request concerning accounts and transactions (a 314(a) Request) by immediately searching our records to determine whether we maintain or have maintained any account for, or have engaged in any transaction with, each individual, entity or organization named in the 314(a) Request as outlined in the Frequently Asked Questions (FAQ) located on FinCEN’s secure website. We understand that we have 14 days (unless otherwise specified by FinCEN) from the transmission date of the request to respond to a 314(a) Request. We will designate through the FINRA Contact System (FCS) one or more persons to be the point of contact (POC) for 314(a) Requests and will promptly update the POC information following any change in such information. (See also Section 2 above regarding updating of contact information for the AML Compliance Person.) Unless otherwise stated in the 314(a) Request or specified by FinCEN, we are required to search those documents outlined in FinCEN’s FAQ. If we find a match, Mr. Hubbard will report it to FinCEN via FinCEN’s Web-based 314(a) Secure Information Sharing System within 14 days or within the time requested by FinCEN in the request. If the search parameters differ from those mentioned above (for example, if FinCEN limits the search to a geographic location), Mr. Hubbard will structure our search accordingly.

If Mr. Hubbard searches our records and does not find a matching account or transaction, then Mr. Hubbard will not reply to the 314(a) Request. We will maintain documentation that we have performed the required search by printing a search self-verification document from FinCEN’s 314(a) Secure Information Sharing System confirming that your firm has searched the 314(a) subject information against your records OR maintaining a log showing the date of the request, the number of accounts searched, the name of the individual conducting the search and a notation of whether or not a match was found.

Mr. Hubbard will review, maintain and implement procedures to protect the security and confidentiality of requests from FinCEN similar to those procedures established to satisfy the requirements of Section 501 of the Gramm-Leach-Bliley Act with regard to the protection of customers’ nonpublic information.

We will direct any questions we have about the 314(a) Request to the requesting federal law enforcement agency as designated in the request. Unless otherwise stated in the 314(a) Request, we will not be required to treat the information request as continuing in nature, and we will not be required to treat the periodic 314(a) Requests as a government provided list of suspected terrorists for purposes of the customer identification and verification requirements.

Know Your Customer

AltMarket reserves the right to reverse or refuse any fiat deposit for any reason and without appeal.

Suspicious Activity

Red flags that signal possible money laundering or terrorist financing include, but are not limited to:

Customers – Insufficient or Suspicious Information
  • Provides unusual or suspicious identification documents that cannot be readily verified.
  • Reluctant to provide complete information about nature and purpose of business, prior banking relationships, anticipated account activity, officers and directors or business location.
  • Refuses to identify a legitimate source for funds or information is false, misleading or substantially incorrect.
  • Background is questionable or differs from expectations based on business activities.
  • Customer with no discernable reason for using the firm’s service.
Efforts to Avoid Reporting and Recordkeeping
  • Reluctant to provide information needed to file reports or fails to proceed with transaction.
  • Tries to persuade an employee not to file required reports or not to maintain required records.
  • “Structures” deposits, withdrawals or purchase of monetary instruments below a certain amount to avoid reporting or recordkeeping requirements.
  • Unusual concern with the firm’s compliance with government reporting requirements and firm’s AML policies.
Certain Funds Transfer Activities
  • Wire transfers to/from financial secrecy havens or high-risk geographic location without an apparent business reason.
  • Many small, incoming wire transfers or deposits made using checks and money orders. Almost immediately withdrawn or wired out in manner inconsistent with customer’s business or history. May indicate a Ponzi scheme.
  • Wire activity that is unexplained, repetitive, unusually large or shows unusual patterns or with no apparent business purpose.
Certain Transactions
  • Customer engages in prearranged or other non-competitive trading, including wash or cross trades of illiquid cryptocurrencies.
  • Two or more accounts trade an illiquid cryptocurrency suddenly and simultaneously.
  • Customer journals securities between unrelated accounts for no apparent business reason.
  • Customer has opened multiple accounts with the same beneficial owners or controlling parties for no apparent business reason.
  • Customer’s trading patterns suggest that he or she may have inside information.
Transactions Involving Low Cap Cryptocurrencies
  • Cryptocurrency has no business, no revenues and no product.
  • Cryptocurrency has experienced frequent or continuous changes in its business structure.
  • Officers or insiders of the issuer are associated with multiple cryptocurrency issuers.
  • Cryptocurrency undergoes frequent material changes in business strategy or its line of business.
  • Officers or insiders of the issuer have a history of securities violations.
  • Cryptocurrency has not made disclosures in SEC or other regulatory filings.
  • Cryptocurrency has been the subject of a prior trading suspension.
Activity Inconsistent With Business
  • Transactions patterns show a sudden change inconsistent with normal activities.
  • Unusual transfers of funds or journal entries among accounts without any apparent business purpose.
  • Maintains multiple accounts, or maintains accounts in the names of family members or corporate entities with no apparent business or other purpose.
  • Appears to be acting as an agent for an undisclosed principal, but is reluctant to provide information.
Other Suspicious Customer Activity
  • Unexplained high level of account activity with very low levels of transactions.
  • Funds deposits for purchase of a long-term investment followed shortly by a request to liquidate the position and transfer the proceeds out of the account.
  • Law enforcement subpoenas.
  • Large numbers of securities transactions across a number of jurisdictions.
  • Buying and selling cryptocurrency with no purpose or in unusual circumstances (e.g., churning at customer’s request).
  • Payment by third-party check or money transfer without an apparent connection to the customer.
  • Payments to third-party without apparent connection to customer.
  • No concern regarding the cost of transactions or fees (i.e., surrender fees, higher than necessary commissions, etc.).

Market Manipulation and Fraud Detection

While it is not in the best interests of AltMarket to delve into the specifics of our market manipulation and fraud detection, it is beneficial to outline the broad methods employed for the real-time detection of known types of market manipulation and fraud.

Conflicts of Interest

  • Tao Network – The Tao cryptocurrency was launched in 2016 and is primarily maintained by the CEO of AltMarket, Inc., Bryce Weiner. For the cryptocurrency to be employed by AltMarket, Mr. Weiner is obligated to never be in possession of more than 0.1% of the total Tao tokens in circulation for the duration of his employment.
  • Unobtanium Network – The CEO of AltMarket, Inc., Bryce Weiner, is lead developer of Unobtanium. For the cryptocurrency to be employed by AltMarket, Mr. Weiner is obligated to never be in possession of more than 0.1% of the total Unobtanium tokens in circulation for the duration of his employment.
  • SYScoin Network - The CEO of AltMarket, Inc., Bryce Weiner, has previously and repeatedly consulted on the development of SYScoin. For the cryptocurrency to be employed by AltMarket, Mr. Weiner is obligated to never be in possession of more than 0.1% of the total SYScoin tokens in circulation for the duration of his employment.
  • Boogie Shack Music Group – AltMarket, Inc. owns a 10% stake in Boogie Shack Music Group, which is the entity responsible for maintaining rights assignments for Initial Artist Offerings.
  • Infiniti Music – Tao Records LLC DBA Infiniti Music owns a 1% stake in AltMarket and provides artist development and studio production for artists within the AltMarket ecosystem. The majority of shareholders of Infiniti Music also own the Tao network token.

Regulatory Compliance

Applicable Laws

AltMarket is a fully licensed business and money transmitter under California law and operates within complete regulatory compliance for a money services business in the United States. AltMarket operates within full accord with the following legislation:

  • Securities Act of 1933
  • Securities Exchange Act of 1934
  • Bank Secrecy Act of 1970
  • Commodity Futures Trading Commission Act of 1974
  • USA PATRIOT Act of 2001

Applicable Agencies

AltMarket recognizes the regulatory authority over certain aspects of cryptocurrency transactions of the:

  • Franchise Tax Board of California
  • Office of the Secretary of State of California
  • Financial Crimes Enforcement Network (FinCEN)
  • Securities Exchange Commission
  • Commodities and Futures Trading Commission
  • Federal Trade Commission
  • Office of the Comptroller of Currency

Audits and Transparency

AltMarket shall have audited all consumer and operational accounts performed by a GAAP certified auditor on a quarterly schedule. Audits shall be certified by the auditor and presented on the AltMarket website for public review, with proprietary information redacted.

All Initial Artist Offerings shall also be GAAP certified by credible auditors prior to the disbursement of funds or assets to relevant parties. As such, all IAO tokens will be deliverable no sooner than 30 days prior to the close of the sale to allow for certification of the audit.

Risk to Funds

Cryptocurrency Network Failure

In order to deposit a cryptocurrency into an AltMarket account, a user must have previously accepted the license for that cryptocurrency. Most true cryptocurrencies are licensed under the MIT License, which states:

“THE SOFTWARE IS PROVIDED "AS IS", WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT. IN NO EVENT SHALL THE AUTHORS OR COPYRIGHT HOLDERS BE LIABLE FOR ANY CLAIM, DAMAGES OR OTHER LIABILITY, WHETHER IN AN ACTION OF CONTRACT, TORT OR OTHERWISE, ARISING FROM, OUT OF OR IN CONNECTION WITH THE SOFTWARE OR THE USE OR OTHER DEALINGS IN THE SOFTWARE.”

Under the terms of the MIT License, AltMarket does not and cannot assume responsibility or liability for funds lost due to failure of the cryptocurrency software. AltMarket is committed to developing and following best practices for the deployment and utilization of cryptocurrencies.

Data Breach

AltMarket treats consumer data with the utmost respect and care, however no security implementation is beyond the potential for exploitation from the human component. AltMarket provides as many tools as possible to provide a user with the ability to secure their own funds and data from the possibility of loss. AltMarket only shares data with those parties required for the purposes of regulatory compliance. At no time is consumer data provided to third parties for the purposes of monetization.

Intellectual Property Rights

Other than the content you own, under these Terms, AltMarket, Inc. and/or its licensors own all the intellectual property rights and materials contained in this Website. You are granted limited license only for purposes of viewing the material contained on this Website.

Restrictions

You are specifically restricted from all of the following:

  • publishing any Website material in any other media;
  • selling, sublicensing and/or otherwise commercializing any Website material;
  • publicly performing and/or showing any Website material;
  • using this Website in any way that is or may be damaging to this Website;
  • using this Website in any way that impacts user access to this Website;
  • using this Website contrary to applicable laws and regulations, or in any way may cause harm to the Website, or to any person or business entity;
  • engaging in any data mining, data harvesting, data extracting or any other similar activity in relation to this Website in any manner other than those provided for those purposes;
  • using this Website to engage in any advertising or marketing.
  • Certain areas of this Website are restricted from being access by you and AltMarket, Inc. may further restrict access by you to any areas of this Website, at any time, in absolute discretion. Any user ID and password you may have for this Website are confidential and you must maintain confidentiality as well.

Your Content

In these Terms and Conditions, "Your Content" shall mean any audio, video text, images or other material you choose to display on this Website. By displaying Your Content, you grant AltMarket, Inc. a non-exclusive, worldwide irrevocable, sub licensable license to use, reproduce, adapt, publish, translate and distribute it in any and all media. Your Content must be your own and must not be invading any third-party's rights. AltMarket, Inc. reserves the right to remove any of Your Content from this Website at any time without notice.

Limitation of liability

In no event shall AltMarket, Inc., nor any of its officers, directors and employees, shall be held liable for anything arising out of or in any way connected with your use of this Website whether such liability is under contract. AltMarket, Inc., including its officers, directors and employees shall not be held liable for any indirect, consequential or special liability arising out of or in any way related to your use of this Website.

Indemnification

You hereby indemnify to the fullest extent AltMarket, Inc. from and against any and/or all liabilities, costs, demands, causes of action, damages and expenses arising in any way related to your breach of any of the provisions of these Terms.

Severability

If any provision of these Terms is found to be invalid under any applicable law, such provisions shall be deleted without affecting the remaining provisions herein.

Variation of Terms

AltMarket, Inc. is permitted to revise these Terms at any time as it sees fit, and by using this Website you are expected to review these Terms on a regular basis. AltMarket, Inc. will make best efforts inform users of any material changes to these Terms.

Assignment

The AltMarket, Inc. is allowed to assign, transfer, and subcontract its rights and/or obligations under these Terms without any notification. However, you are not allowed to assign, transfer, or subcontract any of your rights and/or obligations under these Terms.

Entire Agreement

These Terms constitute the entire agreement between AltMarket, Inc. and you in relation to your use of this Website, and supersede all prior agreements and understandings.

Governing Law & Jurisdiction

These Terms will be governed by and interpreted in accordance with the laws of the California of the United States, and you submit to the non-exclusive jurisdiction of the state and federal courts located in the United States for the resolution of any disputes.