Regulation 14 Compensation for statements in a qualifying cryptoasset disclosure document or supplementary disclosure document

(1)

A person responsible for a qualifying cryptoasset disclosure document or supplementary disclosure document is liable to pay compensation to a person who has—

(a)

bought or subscribed for a qualifying cryptoasset to which that document applies, and

(b)

suffered loss in respect of the qualifying cryptoasset as a result of—

(i)

an untrue or misleading statement in that document, or

(ii)

the omission from the qualifying cryptoasset disclosure document or supplementary disclosure document of a matter that is required to be included by regulation 13 (general requirements to be met by a qualifying cryptoasset disclosure document or supplementary disclosure document).

(2)

If a qualifying cryptoasset disclosure document or supplementary disclosure document is required to include information about the absence of a particular matter, the omission from that document of that information is to be treated as a statement in that document that there is no such matter.

(3)

Where the relevant rules require a qualifying cryptoasset disclosure document or a supplementary disclosure document to include a summary containing key information, a person is not to be subject to liability solely on the basis of the summary unless the summary, when read with the rest of that document—

(a)

is misleading, inaccurate or inconsistent, or

(b)

does not provide the key information that is required by those rules to be included in the summary.

(4)

In paragraph (3), “summary” means anything that is described by the relevant rules as a summary.

(5)

A person who fails to comply with a requirement of the relevant rules relating to the publication of a supplementary disclosure document is liable to pay compensation to a person who has—

(a)

bought or subscribed for a qualifying cryptoasset of the kind in question, and

(b)

suffered loss in respect of the qualifying cryptoasset as a result of the failure.

(6)

In paragraph (5) the reference to a supplementary disclosure document includes a reference to a document which the relevant rules provide is to be treated for the purposes of that paragraph as if it were a supplementary disclosure document.

(7)

A loss is not to be regarded as suffered as a result of the statement or omission mentioned in paragraph (1), or the failure to comply with a requirement mentioned in paragraph (5), unless the person suffering it bought, or subscribed for, the relevant qualifying cryptoasset in reliance on—

(a)

a document mentioned in paragraph (1), or

(b)

information in a cryptoasset disclosure document or supplementary disclosure document that would have been amended or supplemented by the document mentioned in paragraph (5).

(8)

In this regulation, “relevant rules” means—

(a)

designated activity rules made by virtue of regulation 9, or

(b)

rules made by a relevant authorised operator.

(9)

In Schedule 2—

(a)

Part 1 contains exemptions from liability under paragraphs (1) and (5), and

(b)

Part 2 contains exemptions from liability under those paragraphs and from other liability.

(10)

This regulation and Part 1 of Schedule 2 do not affect any liability which may be incurred otherwise than by virtue of this regulation.