MIRU: Escrow Systems on the Crypto Platform

Transcription

1 MIRU: Escrow Systems on the Crypto Platform Abstract.A digital token backed by escrow platform which provides individuals and organizations with a robust and decentralized method of exchanging value while using a familiar accounting unit. The innovation of crypto tokens is an auditable and cryptographically secured global ledger. Service backed token issuers and other market participants can take advantage of crypto technology, along with embedded consensus systems, to transact in familiar, less volatile currencies and assets.

2 Table of Contents Table of Contents Introduction Technology Stack and Processes Miru Technology Stack Flow of Funds Process Proof of Reserves Process Implementation Weaknesses Main Applications For Exchanges For Individuals For Merchants MIRU Escrow Systems For Seller For Buyer Dispute Redressal Financial Ecosystem Incentives and Benefits of MES Future Innovations Multi sig and Smart Contracts Proof of Solvency Innovations Conclusion

3 Appendix Audit Flaws: Exchanges and Wallets Limitations of Existing Fiat pegging Systems Market Risk Examples Legal and Compliance Glossary of Terms References

4 Introduction There exists a vast array of assets in the world which people freely choose as a store of value, a transactional medium, or an investment. We believe the crypto secured is a better technology for transacting, storing, and accounting for these assets. Most estimates measure global wealth around 250 trillion dollars with much of that being held by banks or similar financial institutions. The migration of these assets onto the various crypto tokens represents a proportionally large opportunity. Some of the primary advantages of crypto currencies are: low transaction costs, international borderless transferability and convertibility, trustless ownership and exchange, pseudo anonymity, real time transparency, and immunity from legacy banking system problems. Common explanations for the current limited mainstream use of crypto currencies include: volatile price swings, inadequate mass market understanding of the technology, and insufficient ease of use for non technical users. The idea for asset pegged crypto currencies was initially popularized in the community by the Mastercoin white paper authored by J.R. Willett in January Today, we re starting to see these ideas built with the likes of BitAssets, Ripple, Omni, Nxt, NuShares/Bits, and others. One should note that all exchanges and wallets (like Coinbase, Bitfinex, and Coinapult) which allow you to hold value as a fiat currency already provide a similar service in that users can avoid the volatility (or other traits) of a particular crypto currency by selling them for fiat currency, gold, or another asset. Further, almost all types of existing financial institutions, payment providers, etc, which allow you to hold fiat value (or other assets) subsequently provide a similar service. In this white paper we focus on applications wherein the token issued is used as a standard measure to goods and services provided, with software that is open source, cryptographically secure, and uses distributed ledger technology, i.e. a true crypto currency. While the goal of any successful crypto currency is to completely eliminate the requirement of trust, each of the aforementioned implementations either rely on a trusted third party or have other technical, market based, or process based drawbacks and limitations.

5 In our solution, our escrow pegged crypto currencies is called MIRU. All Miru will initially be issued on the public ledger via the Omni Layer protocol and so they exist as a crypto currency token. Each Miru unit issued into circulation is backed by a robust and safe system which powers the Financial Escrow platform. Miru may be redeemable/exchangeable for the underlying fiat currency pursuant to Miru Labs LLC terms of service or, if the holder prefers, the equivalent spot value in Bitcoin and as an alternate which will be available in leading crypto exchanges for conversion to alt coins and fiat currencies where the same is on offer by the third party exchanges. Once a Miru has been issued, it can be transferred, stored, spent, etc just like any other crypto currency. Our implementation has the following advantages over other crypto currencies: Miru exist on the public ledger that is developed/tested altcoin ledger and within closed source software running on centralized, private databases. Miru can be used just like other alt coins, i.e. in a p2p, pseudo anonymous, decentralized, cryptographically secure environment. Miru can be integrated with merchants, exchanges, and wallets just as easily as other altcoins or any other crypto currencies. Miru inherit the properties of the secure protocol which include: a centralized exchange; browser based, open source, wallet encryption; Transparency, accountability, multi party security and reporting functions. Miru Labs LLC employs a simple but effective approach for conducting Proof of Reserves which significantly reduces our counterparty risk as the custodian of the assets. Miru issuance or redemption will not face any pricing or liquidity constraints. Users can buy or sell as many Miru s they want, quickly, and with very low fees. Miru will not face any market risks. Miru s backing implementation is easier for non technical users to understand as opposed to collateralization techniques or derivative strategies.

6 Users can purchase Miru from mirulabs.io (our web wallet) or from supported exchanges who support Miru as a deposit and withdrawal method. Users can also transact and store Miru with any wallet that supports our security protocol. Other exchanges, wallets, and merchants are encouraged to reach out to us about integrating Miru as a surrogate for traditional escrow payment methods. We recognize that our implementation isn t perfectly decentralized since Miru Labs LLC must act as a centralized custodian of reserve assets (albeit miru in circulation exist as a decentralized digital currency). However, we believe this implementation sets the foundation for building future innovations that will eliminate these weaknesses, create a robust platform for new products and services, and support the growth and utility of the blockchain over the long run. Some of these innovations include: Mobile payment facilitation between users and other parties, including other users and merchants Instant or near instant fiat value transfer between decentralized parties (such as multiple exchanges) Introduction to the use of smart contracts and multi signature capabilities to further improve the general security process, and enable new features.

7 Technology Stack and Processes As the custodian of the backing asset we are acting as a trusted third party responsible for that asset. This risk is mitigated by a simple implementation that collectively reduces the complexity of conducting both fiat and crypto audits while increasing the security, provability, and transparency of these audits. Miru Technology Stack The stack has 3 layers, and numerous features, best understood via a diagram

8 Here is a review of each layer. 1. The first layer is the public ledger. The Miru transactional ledger is embedded in the blockchain as meta data via the embedded consensus system. 2. The second layer is the Omni Layer protocol. Omni is a foundational technology that can: a. Grant (create) and revoke (destroy) digital tokens represented as meta data embedded in the blockchain. b. Track and report the circulation of Miru via Miru Escrow System c. Enable users to transact and store Miru and other assets/tokens in a: (a) p2p, pseudo anonymous, cryptographically secure environment. (b) Open source, browser based, encrypted web wallet. d. Multi-signature and offline cold storage-supporting system. 3. The third layer is Miru Labs LLC, our business entity primarily responsible for: a. Accepting escrow services for third party participants by issuing the corresponding Miru b. Sending and settling withdrawals and revoking the corresponding Miru c. Publicly reporting Proof of Reserves and other audit results d. Initiating and managing integrations with existing blockchain wallets, exchanges, and merchants e. Operating mirulabs.io, a web wallet which allows users to send, receive, store, and convert Miru conveniently.

9 Flow of Funds Process There are five steps in the lifecycle of a Miru, best understood via a diagram. Step 1 User deposits fiat currency or alt coins to purchase via various methods available. Step 2 Miru Labs LLC generates and credits the user's Miru account. Miru enter circulation. Amount of fiat/altcoin currency deposited by user = amount of Miru issued to user (i.e. 10k USD deposited = 10k worth of Miru issued). Step 3 Users transact with Miru. The user can transfer, exchange, and store Miru via a p2p open source, pseudo anonymous, public ledger platform.

10 Step 4 The user deposits Miru with Miru Labs LLC or other accredited exchanges for redemption into fiat currency or other alt coins. This is subjective to the terms and conditions associated with that particular exchange. Step 5 Miru Labs LLC OR Exchanges credits/debits the miru and sends fiat currency to the user s bank account or other crypto wallets. Users can obtain Miru outside of the aforementioned process via an exchange or another individual. Once a Miru enters circulation it can be traded freely between any business or individual. For example, users can purchase Miru from various more exchanges to follow soon. The main concept to be conveyed by the Flow of Funds diagram is that Miru Labs LLC is the only party who can issue Miru into circulation (create them) or take them out of circulation (destroy them). This is the main process by which the system solvency is maintained. Proof of Reserves Process Proof of Solvency, Proof of Reserves, Real Time Transparency, and other similar phrases have been growing and resonating across the crypto currency industry. Exchange and wallets audits, in their current form, are very unreliable. Insolvency has occurred numerous times in the crypto ecosystem, either via hacks, mismanagement, or outright fraud. Users must be diligent with their exchange selection and vigilant in their use of exchanges. Even then, a savvy user will not be able to fully eliminate the risks. Further, there are exchange users like traders and businesses who must keep non trivial fiat balances in exchanges at all times. In financial language, this is known as the counterparty risk of storing value with a third party. We believe it s safe to conclude that exchange and wallet audits in their current form are not very reliable. These processes do not guarantee users that a custodian or exchange is solvent. Although there have been great contributions to improving the exchange audit processes, like the Merkle tree approach[6], major flaws still remain.

11 Miru Labs LLC issues all Miru via the Omni Layer protocol. Omni operates on top of the Bitcoin blockchain and therefore all issued, redeemed, and existing Miru, including transactional history, are publicly auditable via the tools provided at Omnichest.info. Miru Labs LLC has a bank account which will receive and send fiat currency to users who purchase/redeem Miru directly with us. Subjective to terms and conditions in force. Every Miru issued or redeemed, as publicly recorded by the Ledger will correspond to a deposit or withdrawal of funds from the bank account. The provability of Miru to fiat will rely on several processes: For clarity, we d like to acknowledge that the Miru Escorw System is different than the Miru.io web wallet in terms of Proof of Reserves. In this paper, we mostly focus on Proof of Reserves for the Miru Escrow System; i.e. all Miru in circulation at any point in time. The miru.io wallet is a consumer facing web wallet operating on closed source code and centralized servers. Conducting a Proof of Reserves for this wallet is fundamentally different than what we ve outlined for the Miru Escrow System. We re planning the deployment of a PoR based transparency solution for the Miru.io wallet. We believe it will be the most advanced PoR system in existence today. It overcomes almost all of the challenges outlined in the appendix on this topic. Mind you, users can always secure Miru s through managing the private keys themselves or through Omni Wallet.

12 Implementation Weaknesses We understand that our implementation doesn t immediately create a fully trustless crypto currency system. Mainly because users must trust Miru Labs LLC and our corresponding legacy banking institution to be the custodian of the reserve assets. However, almost all exchanges and wallets (assuming they hold USD/fiats) are subject to the same weaknesses. Users of these services are already subject to these risks. Here is a summary of the weaknesses in our approach: We could go bankrupt Our bank could go insolvent Our bank could freeze or confiscate the funds We could abscond with the reserve funds Observe that almost all digital currency exchanges and wallets (assuming they hold USD/fiat) already face many of these challenges. Therefore, users of these services are already subject to these risks. Below we describe how each of these concerns are being addressed. We could go bankrupt In this case, the business entity Miru Labs LLC would go bankrupt but client funds would be safe, and subsequently, all miru will remain redeemable. Most security breaches on Bitcoin businesses have targeted crypto currencies rather than individual Escrow accounts. Since all Miru exist on the public ledger blockchain they can be stored by individuals directly through securing their own private keys. Our bank could go insolvent This is a risk faced by all users of the legacy financial system and by all exchange operators. Miru Labs LLC currently has accounts with various banks in USA, Hong Kong and Singapore, whom are aware and confident that Miru s business model is acceptable. Additional banking partners are being established in other jurisdictions to further mitigate this concern. Our bank could freeze or confiscate the funds Our banks are aware of the nature of crypto tokens and are accepting of this businesses. They also provide banking services to some of the largest crypto currency exchanges globally. The KYC/AML processes we follow are also used by the other digital currency exchanges they currently bank. They have assured us we are in full compliance.

13 We could abscond with the reserve assets The corporate charter is public as well as the business owners names, locations, and reputations. Ownership of the account is legally bound to the corporate charter. Any transfers in or out of the bank account will have the associated traces and are bound by rigid internal policies. Re centralization of risk to a single point of failure We have some ideas on how to overcome this and we ll be sharing them in upcoming blog and product updates. There are many ways to tackle this problem. For now, this initial implementation gets us on the right track to realize these innovations in following versions. By leveraging the platforms we have chosen, we have reduced the centralization risk to one singular responsibility: the creation and redemption of tokens. All other aspects of the system are decentralized. Main Applications In this section we ll summarize and discuss the main applications of Miru across the blockchain ecosystem and for other consumers globally. We break up the beneficiaries into three user groups: Exchanges, Individuals, and Merchants. The main benefits, applicable to all groups: Properties of Miru bestowed upon other asset classes Less volatile, familiar unit of account World s assets migrate to the crypto blockchain For Exchanges Exchange operators understand that accepting fiat deposits and withdrawals using legacy financial systems can be complicated, risky, slow, and expensive. Some of these issues include: Identifying the right payment providers for your exchange irreversible transactions, fraud protection, lowest fees, etc Integrating the platform with banks who have no APIs

14 Liaising with these banks to coordinate compliance, security, and to build trust Prohibitive costs for small value transfers 3 7 days for international wire transfers to clear Poor and unfavorable currency conversion fees By offering Miru, an exchange can relieve themselves of the above complications and gain additional benefits, such as: Accept crypto fiats as deposit/withdrawal/storage method rather than using a legacy bank or payment provider Allows users to move fiat in and out of exchange more freely, quickly, cheaply Outsource fiat custodial risk to Miru Labs LLC just manage cryptos Easily add other Miru fiat/crypto currencies as trading pairs to the platform Secure customer assets purely through accepted crypto processes Multi signature security, cold and hot wallets, HD wallets, etc Conduct audits easier and more securely in a purely crypto environment Anything one can do with Bitcoin as an exchange can be done with Miru Exchange users know how risky it can be to hold fiat currencies on an exchange. With the growing number of insolvency events it can be quite dangerous. As mentioned previously, we believe that using Miru exposes exchange users to less counterparty risk than continually holding fiat on exchanges. Additionally, there are other benefits to holding Miru, explained in the next section.

15 For Individuals There are many types of individual crypto users in the world today. From traders looking to earn profits daily; to long term investors looking to store their tokens securely; to tech savvy shoppers looking to avoid credit card fees or maintain their privacy; to philosophical users looking to change the world; to those looking to remit payments globally more effectively; to those in third world countries looking for access to financial services for the first time; to developers looking to create new technologies; to all those who have found many uses for Bitcoin. For each of these individuals, we believe Miru s are useful in similar ways, like: Enter into Escrow for the sale/purchase of goods and services globally Cold store USD/fiat value by securing one s own private keys Avoid the risk of storing fiat on exchanges move crypto fiat in and out of exchanges easily Avoid having to open a fiat bank account to store fiat value Easily enhance applications that work with bitcoin to also support Miru Anything one can do with Bitcoin as an individual one can also do with Miru For Merchants Merchants want to focus on their business, not on payments. The lack of global, inexpensive, ubiquitous payment solutions continue to plague merchants around the world both large and small. Merchants deserve more. Here are some of the ways Miru can help them: Assured payment release mechanism for the goods sold Avoid conversion from crypto USD/fiat and associated fees and processes Prevent chargebacks, reduce fees, and gain greater privacy Provide novel services because of fiat crypto features Micro tipping, gift cards, more Anything one can do with Bitcoin as a merchant one can also do with Miru

16 MIRU ESCROW SYSTEM ( MES ) As the custodian of the backing asset we are acting as a trusted third party responsible for that asset. This risk is mitigated by a simple implementation that collectively reduces the complexity of conducting both fiat and crypto audits while increasing the security, provability, and transparency of these audits. This is a safe and secure platform to provide an escrow service for goods and services transactions globally. MES is an advanced system which is powered by Miru crypto token. Our engineers and software team has developed MES whereby users can created a wallet to receive and transfer the Miru token in a secure manner. Once a wallet is created you are automatically in the MES Financial Eco System whereby your business opportunities are unlimited. How MES works is once both buyer and seller agree to the terms of the transaction (within their wallets) the Buyer will use their Miru tokens to secure the transaction. Thereafter, the Seller will ship the goods or provide the services in accordance to the terms and conditions. Once the goods are delivered, the funds (in the form of Miru tokens) would be released to Sellers wallet. For the Seller The payment due to the seller is held in a prepaid escrow Miru tokens. Once the obligations as per the agreement between the buyer is discharged, the payment is guaranteed for release by the buyer to the seller s wallet as Miru tokens which can be converted into other crypto tokens or corresponding fiat currencies. For the Buyer The payment will be held within the MES until the buyer receives the goods or services as per the terms of the agreement with the seller. Once the buyer accepts the goods or service pursuant to the terms and conditions of the agreement, the tokens that are held under the MES would be release to the seller. The Buyer reserves the right to refuse to proceed with the agreement due to any breach of the terms and the token would be refunded in the event that the seller has breached the agreement. In the Event of Dispute The parties must inform Miru Labs in writing immediately that there is a dispute in the transaction. Thereafter, Miru Labs would issue a notice to the buyer and seller giving them 24 hours to resolve the dispute between themselves, failing which the parties would have to submit their written claim/case to the dispute panel within 24 hours and thereafter, the Dispute Panel shall the make a decision within 48 hours whereby the said decision shall be final and binding on the parties.

17 FINANCIAL ECO SYSTEM Once the user creates a wallet they will automatically be a part of MES FINANCIAL ECO SYSTEM whereby there would be unlimited opportunities as there would be 1,000,000 (estimated within 6 months) users/wallets in the MES FINANCIAL ECO SYSTEM. Each and every user that creates a wallet will have their profile available to be view by other users that has created a wallet. The profile would list down the needs and offers of the users within the MES FINANCIAL ECO SYSTEM. This would immediately create commercial opportunities for the users. Currently there are various business partners in America, India, China and South East Asia that are in talks with Miru Labs to use the platform for their trading needs. The total value of their annual trading is estimated to be USD 1,000,000, (USD 1 Billion). This is equivalent to USD50 million income annually based on our current charges of 0.5% per transaction. With the initial capital raised from the ICO we would partner with various platforms which offer goods and services whereby you can buy and sell goods and services using the MIRU tokens. INCENTIVE AND BENEFITS OF MES The majority of transactions with regards to global sales of goods and series are using Banking Instruments such as LC, BG and SBLC as mentioned above. The charges levied by the financial institutions are between 1%-3% per transaction. With the use of MES there will be savings between 2%- 3% by the users. For companies that are commercially involved in global transactions they may save millions of dollars. Currently, many countries in Africa and South America do not have trade contracts with the rest of the world due to their lack of support in their instruments of payment or to guarantee payments for goods and services. With MES, this will open the doors for many different markets globally.

18 Future Innovations Multi sig and Smart Contracts Proof of Solvency Innovations Conclusion Miru constitutes the first crypto based fiat pegged cryptocurrencies for Escrow in existence today. Miru is based on the SHA protocols, the most secure and well tested blockchain and public ledger in existence. Miru are fully reserved, completely independent of market forces, pricing, or liquidity constraints. Miru has a simple and reliable Proof of Reserves implementation and undergoes regular professional audits. Our underlying banking relationships, compliance, and legal structure provide a secure foundation for us to be the custodian of reserve assets and issuer of Miru s. Our team is composed of experienced and respected entrepreneurs from the Crypto ecosystem and beyond. We are focused on arranging integrations with existing businesses in the crypto currency space. Business like exchanges, wallets, merchants, and others. We re already integrated with some exchanges like tradesco and are integrating with many more to come. Please reach out to us to find out more.

19 Appendix Audit Flaws: Exchanges and Wallets Here is a summary of the current flaws found in technology based exchange and wallet audits. In the Merkle tree approach users must manually report that their balances (user s leaf) have been correctly incorporated in the liability declaration of the exchange (the Merkle hash of the exchange s database of user balances). This proposed solution works if enough users verify that their account was included in the tree, and in a case where their account is not included this instance would be reported. One potential risk is that an exchange database owner could produce a hash that is not the true representation of the database at all; it hashes an incomplete database which would reduce its apparent liabilities to customers, making them appear solvent to a verifying party. Here are some scenarios where a fraudulent exchange would exclude accounts and Bitdust Accounts: Inactive or low activity accounts would lower the chance that an uninterested user would check or report inconsistencies. In some cases these long tail accounts could represent a significant percentage of the exchange s liabilities. Colluding Whales Attack: There is evidence that large Bitcoin traders are operating on various exchanges and moving markets significantly. Such traders need to have capital reserves at the largest exchanges to quickly execute orders. Often, traders choose exchanges that they trust. In this way they can be assured that should a hack or liquidity issue arise, they have priority to get their money out. In this case, the exchange and trader could collude to remove the whales account balance from the database before it s hashed. Key Rental Attack: To pass the audit, a malicious exchange could rent the private keys to bitcoins they do not own. This would make them appear solvent by increasing their assets without any acknowledgment that those funds were loaned to them. Likewise, they could borrow fiat currency to do the same. There are more attacks not discussed here.

20 Reaching Statistical Significance (reporting completeness): Even outside of these three attack vectors, a database that has been manipulated may never be detected if a sufficient number of users are not validating balances. The probability of getting 100% of the users to verify balances is likely zero, even with proper incentivization structure for users to verify their balances. Therefore, auditors would need statistical tools to make statements about the validity of an exchange s database based on sampling frequency, size, and other properties. Currently users have no way to receive compensation by legal means in case something goes wrong with the exchange. For example, when Mt.Gox closed operations, many users might not have independently recorded their account balances (prints screens, signed messages to themselves, etc) in a way that could conclusively prove to law enforcement that this exchange s I.O.U s actually existed. Such users are at the mercy of the exchange to somehow publish a record of that hash tree or original database. The proposed structure in which these audits would be performed still contains some subtle but important flaws. In particular, the data reporting (hash tree) on the institution s website gives no guarantee at all to users, as a malicious exchange could publish different states/balances to different groups of users, or retroactively change the state. Thus it is fundamental to publish this data through a secure broadcast channel, e.g. the Bitcoin blockchain. Privacy is a barrier to entry for the adoption of an automated/open auditing system. While some progress has been made towards better privacy there is no perfect solution yet. Further, to build up an accurate user verified liability space, these users will have to report account balances with the exchange and Bitcoin addresses. Some users likely would not report this information regardless of the incentive, therefore providing cryptographically secure privacy whilst obtaining the reporting goal is paramount. Time Series: the Merkle tree hash is a single snapshot of the database at a single point in time. Not having a somewhat continuous time series of the database opens significant attack vectors. Additionally, a time series of user reported information would also be required for piecing together the history of any reported incidents of fraud.

21 Trusted Third Parties: All of the current exchange audits have relied on some reputable trusted third party to make some type of verification. In the Coinbase audit, that was Andreas Antonopoulos, in the Kraken audit that was Stefan Thomas. If we absolutely must rely on a trusted third party then some audit standards and procedures should ensure this weaknesses is fortified. Market Risk Examples In the collateralization method, market risk exists because the price of the asset being used as collateral can move in an adverse direction to the price of the asset it s backing/pegging. This would cause the total value of the collateral to become less than the total value of the issued asset and make the system insolvent. This risk is mitigated by the custodian closing the position before this happens; that is, when the collateral price equals the pegged asset price then the collateral is liquidated (sold on the open market) and the position is closed. A great approach, with merit, and used in many liquid markets across the traditional banking and financial markets. However, as we saw from the global financial crisis, situations can arise in which the acceleration of such events causes a liquidity crunch and thus the collateral is unable to be liquidated fast enough to meet trading obligations, subsequently creating losses. With the cryptocurrency markets being so small and volatile, this type of event is much more likely. Additionally, the overall approach suffers from other liquidity and pricing constraints since there must be a sufficient supply of users posting collateral for the creation of the pegged assets to exist in the first place. In the derivatives approach, the price of the asset is pegged through entering one of several derivatives strategies, such as: swap strategies, covered and naked options strategies, various futures and forwards strategies. Each strategy has their own strengths and weaknesses, the discussion of which we won t engage in here. To summarize, each of these pegging processes themselves have similar market risk characteristics as the aforementioned collateralization method. It should be noted that the two methods are not mutually exclusive and often paired in a specific trading, hedging, or risk management function at legacy system financial institutions. Finally, understand that we believe some combination of the above approaches may become a secure, reliable, and generally risk free process for backing/pegging assets; however, at this point in time, this is

22 not a direction we feel is feasible to take to ensure liquidity and price stability. Further, we believe that a reserve based approach will always be in existence and complement these other approaches as the entire industry grows. As advances in technology continue, we will evaluate and incorporate any benefits available while maintaining the guarantee of 100% redeem ability. Legal and Compliance For the avoidance of doubt, these Terms of Service have two Parties: you and MIRU. Any and all terms, conditions, licenses, limitations, and obligations contained within and on the Site are incorporated into these Terms of Service by reference, including, without limiting the generality of the foregoing, the following Site policies and pages: the Privacy Policy; the Anti-Spam Policy; the Law Enforcement Requests Policy; and the Fees Schedule. In particular, please note that all transactions of Digital Tokens on or off the Site may be subject to fees levied by MIRU as set out and updated in the Fees Schedule from time to time. In the event of any inconsistency between these Terms of Service and any other pages or policies on the Site, these Terms of Service shall prevail. By creating an account on the Site or by using any of the Services, you acknowledge that you have read, understand, and completely agree to these Terms of Service in effect from time to time. If you disagree with these Terms of Service or with any subsequent amendments, changes, or updates, you may not use any of the Services; your only recourse in the case of disagreement is to stop using all of the Services. These Terms of Service may be amended, changed, or updated by MIRU at any time and without prior notice to you. You should check back often to confirm that your copy and understanding of these Terms of Service is current and correct. Your non-termination or continued use of any Services after the effective date of any amendments, changes, or updates constitutes your acceptance of these Terms of Service, as modified by such amendments, changes, or updates. The use of the Site and any Services is void where prohibited by applicable law. Interpretation: Definitions: In these Terms of Service and all documents incorporated herein by reference, the following words have the following meanings unless otherwise indicated: Affiliate means a direct or indirect subsidiary of you, a holding company of you, and any other subsidiary of that holding company; AML means anti-money laundering;

23 Applicable AML/CTF Laws means all Laws applicable to you, your Affiliate(s), or any of the Associates prohibiting money laundering or any acts, attempted acts, or material omissions or misrepresentations to conceal or disguise the identity of proceeds of any crime or terrorism or any party participating in or involved with an illegal or penalized transaction, to evade reporting requirements, or to eliminate transaction monitoring trails, which may also require programs, policies, processes, and controls to detect, prevent, report, and maintain records of money laundering, terrorist financing, or other suspicious activity; Applicable Anti-Bribery/Anti-Corruption (ABAC) Laws means all Laws prohibiting bribery, kick-backs, undue influence, or similar corrupt business practices applicable to the Party, your Affiliate(s), or any of the Associates; Applicable Sanctions Laws means all economic or financial sanctions, trade embargoes, blocking orders, asset freezes, export controls, restrictive trade measures, or anti boycott regimes that are enacted, adopted, issued, entered, promulgated, or applied by any Government to you, your Affiliates, or any of the Associates; Associates means MIRU LABS LLC, and each and every one of their respective shareholders, holding company or companies, direct or indirect subsidiaries, employees, contractors, agents, directors, officers, partners, affiliates, insurers, and attorneys; CTF means counter-terrorist financing; Digital Tokens means blockchain-based assets or rights, or other similar digital representations of rights or assets, including bitcoins, Litecoins, ethers, and Miru Tokens; FATF means the Financial Action Task Force; Government means any national, federal, state, municipal, local, of foreign branch of government, including any court, tribunal, arbitral body, department, agency, subdivision, bureau, commission, or other governmental, government appointed, or quasi-governmental authority exercising executive, legislative, judicial, regulatory, or administrative powers, authority, or functions of or pertaining to a government agency, instrumentality, or component, including any parasternal company or state-owned (majority or greater) or controlled business enterprise; Government Approval means any license, authorization, consent, permit, consent, concession, ruling, permit, filing, registration, certification, exemption, or exception enacted, adopted, issued, entered, promulgated, or applied by or with any Government under applicable Laws. Government Official means any person qualifying as a public official or a foreign official under the Applicable ABAC Laws, including but not limited to an officer or employee of any Government; a director, officer, or employee of any Person in which a Government possesses a majority or controlling interest; a candidate for public office; a political party or political party official; an officer or employee of a public international organization; and any individual who is acting in an official capacity for any Government, candidate for public office, political party, or public international organization, even if such individual is acting in that capacity temporarily and without compensation; Losses has the meaning set out in paragraph 18 of these Terms of Service; Laws means any federal, state, provincial, county, parish, local, or foreign statute, law, constitution, treaty, convention, executive order, judgment, injunction, decree, writ, stipulation, directive, ordinance, regulation, rule, code, rule of common law, or other similar requirement or obligation enacted, adopted, issued, entered, promulgated or applied by a Government to you, your Affiliate(s), or any of the Associates, as they may be amended, extended, consolidated, re-enacted, or replaced, from time to time;

24 Person includes an individual, association, partnership, corporation, other body corporate, trust, and any other form of legal organization or entity, either individually or collectively; Personal Information means information about an identifiable individual, business, organization, or other entity, but does not include the name, title, business address, or telephone number of an employee of a business, organization, or other entity; Prohibited Jurisdictions means any country, jurisdiction, or territory that is now or may become subject to Applicable Sanctions Laws; the Government or Government Officials of any such country, jurisdiction, or territory; any Person that is owned or controlled, directly or indirectly, by the foregoing, and any Person that is acting or purporting to act, directly or indirectly, for the benefit of, on behalf of, or at the direction of the foregoing; Prohibited Use has the meaning set out in paragraph 12 of these Terms of Service; Sanctions List means any list, annex, or supplement designating any Government, Person, vessel, or aircraft as the target of economic or financial sanctions, trade embargoes, blocking orders, asset freezes, export controls, or restrictive trade measures under Applicable Sanctions Laws, as amended, modified, or substituted from time to time, by any Government with jurisdiction over you, your Affiliate(s), or any of the Associates. Sanctioned Person means any Person, Government, or Government Official that is specifically listed in any Sanctions List; or Person owned or controlled in the aggregate by one or more Persons designated in any Sanctions List or by a Prohibited Jurisdiction, and that is not subject to a Government Approval. Service means any of the services, functions, or features offered on the Site; Site means the Internet website Terms of Service means these terms and conditions of service, as they may be changed, amended, or updated from time to time, including the following Site policies and pages: the Privacy Policy; the Anti-Spam Policy; the Law Enforcement Requests Policy; and, the Fees Schedule; MIRU means: MIRU LABS LLC MIRU TOKEN means the Miru Digital Token issued and redeemed by MIRU; Trading Order Book has the meaning set out in paragraph 3 of these Terms of Service; U.S. Person means: in the case of an individual, a Person resident in or acting within the United States; and, in any other case, a Person located or operating in the United States; or, a Person owned 10% or more with equity share voting power by one or more Persons resident in the United States or by one or more corporations or entities incorporated in or formed in the United States; and, you or your means the customer.

25 Headings: The headings and sub-headings in these Terms of Service are for ease of reference only and are not to be taken into account in the construction or interpretation of any provision or provisions to which they refer. Extended Meanings: Unless otherwise specified in these Terms of Service, words importing the singular include the plural and vice versa and words importing gender include all genders. Governing Law: These Terms of Service shall be governed by and construed and enforced in accordance with the laws of the United States of America, and shall be interpreted in all respects as a United States of America contract. Any claim or action arising from or related to these Terms of Service shall be governed by and construed and enforced in accordance with the laws of the United States of America. For the avoidance of doubt, and without limiting the generality of the foregoing, this provision expressly applies to any tort claim against MIRU. The venue and forum for any claim or action against or involving MIRU shall be in the courts of British Virgin Islands. You unconditionally at torn to the exclusive jurisdiction of the International Arbitrator s according to the British Virgin Islands Rules and Laws and all courts competent to hear appeals therefrom. You also unconditionally agree to the exclusive forum and venue of the British Virgin Islands in all claims or actions arising from or any dispute or question of any kind relating to these Terms of Service. The doctrine of forum non convenient shall not apply in the selection of forum under these Terms of Service. License to Use the Site: If you comply with these Terms of Service, MIRU grants you the limited right to use the Site and the Services. The right to use the Site and the Services is a personal, restricted, non-exclusive, non-transferable, revocable, limited license, and it is subject to the limitations and obligations in these Terms of Service. Nothing in these Terms of Service gives you any license (other than as set out in this paragraph), right, title, or ownership of, in, or to the Site or any of the Services. About Miru Tokens: General Restrictions: MIRU issues and redeems Miru Tokens. Miru Tokens may be used, kept, or exchanged online wherever parties are willing to accept Miru Tokens. The range of currencies available to denominate Miru Tokens is within the sole control and at the sole and absolute discretion of MIRU. Miru Tokens are not money themselves. MIRU will not issue Miru Tokens for consideration that is other Digital Tokens (for example, bitcoin), and will not redeem Miru Tokens for other Digital Tokens; only money will be accepted upon issuance, and only money will be provided upon redemption. In order to cause Miru Tokens to be issued or redeemed by Miru, you must be a verified customer of MIRU. No exceptions will be made to this provision. The right to have Miru redeemed or issued is a contractual right personal to you. MIRU must and does at all times reserve the right to refuse to issue or redeem Miru Tokens, without limiting the generality of the foregoing, if any act, conduct, transaction, omission, or misrepresentation: violates; attempts or conspires to violate; causes, aids, or abets the violation of; involves a Prohibited Jurisdiction or Sanctioned Person under; is suspected or believed to be blocked property, frozen assets, or economic resources, or the proceeds of any crime, terrorist financing, or corruption related to any Person or Government Official under; or, exposes MIRU and its Associates to sanctions, restrictions, or penalties pursuant to, any applicable Laws, including but not limited to Applicable AML/CTF Laws, Applicable ABAC Laws, or Applicable Sanctions Laws. MIRU also reserves the right to issue or redeem Miru Tokens upon receipt of any subpoena, request for information, or order under applicable Laws or from any Government or Government

26 Official, including but not limited to any domestic or international law enforcement authority. Absent a reasonable legal justification not to redeem Miru Tokens, and provided that you are a fully verified customer of Miru, your Miru Tokens are freely redeemable. Persons ordinarily resident in, and nationals of, Prohibited Jurisdictions or Sanctioned Persons under Applicable Sanctions Laws; Persons and Government Officials believed or suspected to be transacting in the proceeds of corruption, bribery, or other crimes under Applicable ABAC Laws; and Persons believed or suspected to be engaged in money laundering or terrorist financing under Applicable AML/CTF Laws are not permitted to be customers of MIRU; are not permitted to cause Miru to be issued or redeemed; and, are not permitted to hold or transact in Miru Tokens. Furthermore, residents of certain U.S. states are not permitted to be customers of MIRU; are not permitted to cause Miru to be issued or redeemed; and, are not permitted to hold Miru Tokens. Risks and Limitation of Liability: Important: Digital Token markets are volatile and shift quickly in terms of liquidity, market depth, and trading dynamics. You are solely responsible and liable: for your account on the Site; and, for knowing the true status of your Miru Tokens held on the Site, even if presented incorrectly by the Site at any time. You acknowledge and agree that you are fully responsible for safeguarding access to, and any information provided through, the Site and any of the Services, including, but not limited to, private keys, usernames, passwords, and bank account details. Withdrawals: In the course of processing and sending any withdrawals in money, MIRU may be required to share your customer information with other contractual third parties. You hereby irrevocably grant full permission and authority for MIRU to share this information with such contractual third parties and release MIRU from any liability, error, mistake, or negligence related thereto. No Class Proceedings: You and MIRU agree that any party hereto may bring claims against the others only on an individual basis and not as a plaintiff or class member in any purported class or representative action or proceeding. No adjudicator may consolidate or join more than one person s or party s claims and may not otherwise preside over any form of a consolidated, representative, or class proceeding. Any relief awarded to any one MIRU user cannot and may not affect any other MIRU users. Prohibited Uses: You may not use the Site or any Services in order to disguise the proceeds of, or to further, any breach of applicable laws or regulations, or to deal in any contraband Digital Tokens,, funds, or proceeds; purchase Miru Tokens on the Site, or use any Services, with anything other than funds or Digital Tokens that have been legally obtained by you and that belong to you; use the Site or any Services to interfere with or subvert the rights or obligations of MIRU or the rights or obligations of any other Site customer or any other third party; use any Services relying on inaccurate information presented by the Site or by MIRU, or take advantage of any technical glitch, malfunction, failure, delay, default, or security breach; use the Site or any Services to engage in conduct that is detrimental to MIRU or to any other Site customer or any other third party; falsify any account registration details provided to MIRU;

27 falsify or materially omit any information or provide misleading information requested by MIRU, including at registration; reverse-engineer, decompile, or disassemble any software running on the Site; attempt to harm MIRU or any third party through your access to the Site or any Services, except that nothing in this subparagraph shall be construed as limiting your free speech rights under applicable law; or, violate these terms of service. Terms of Service. Any use as described in this paragraph shall constitute a Prohibited Use. If MIRU determines that you have engaged in any Prohibited Use, MIRU may address such Prohibited Use through an appropriate sanction, in its sole and absolute discretion. Such sanction may include, but is not limited to, making a report to law enforcement or other authorities; confiscation of any funds or Miru Tokens; and, terminating your access to any Services. MIRU may, at its sole and absolute discretion, seize and hand over your property to law enforcement or other authorities where circumstances warrant, in MIRU's sole and absolute discretion. In such circumstance, MIRU has no obligation to disclose to you about any circumstances reported to or shared with any Government or law enforcement authority. Anti-Money Laundering and Counter-Terrorist Financing: MIRU is committed to providing you with safe, compliant, and reputable Services. Accordingly, MIRU insists on a customer due diligence process and implementation and ongoing analysis and reporting. This includes monitoring of and for suspicious transactions and mandatory or voluntary reporting to international regulators. MIRU needs to keep certain information and documentation on file pursuant to applicable law and its contractual relationships, and MIRU hereby expressly reserves the right to keep such information and documentation. This will apply even when you terminate your relationship with MIRU or abandon your application to have an account with MIRU. MIRU reserves the right to refuse registration to, or to bar transactions from or to, or terminate any relationship with, any customer for any reason (or for no reason) at any time. Without limiting the generality of the foregoing, this includes, but is not limited to, any Person ordinarily resident in any Prohibited Jurisdiction; any Sanctioned Person; any Government Official or Politically Exposed Person within the meaning of the FATF s 40 Recommendations; or, anyone that fails to meet any customer due diligence standards, requests, or requirements of MIRU or obligations of Applicable AML/CTF Laws, Applicable Sanctions Laws, or Applicable ABAC Laws. In lieu of refusing registration, MIRU may perform enhanced customer due diligence procedures. At all times, you may be subject to enhanced customer due diligence procedures in your use of the Site and any Service. Intellectual Property: MIRU LABS LLC and the logos, trade names, word marks, and design marks are trademarks of MIRU LABS LLC. You agree not to appropriate, copy, display, or use the Miru or other content without express, prior, written permission to do so. Unless otherwise indicated, all materials on MIRU MIRU LABS LLC.