“0x Protocol" means the open-source protocol that facilitates peer-to-peer ERC-20 Cryptoasset exchange interoperability among decentralized applications that is deployed on the Ethereum blockchain. The underlying code is available at https://github.com/0xProject.
“Appeals Officer” means the employee or agent of Veil International that is responsible for reviewing all appeals by Trading Members of actions taken by Veil International and reaching a decision on such matters.
“Applicable Law” means, with respect to any person, any domestic or foreign law, rule, statute, regulation, by-law, order, protocol, code, decree, or other directive, requirement or guideline, published or in force which applies to or is otherwise intended to govern or regulate any person, property, transaction, activity, event or other matter, including any rule, order, judgment, directive or other requirement or guideline applicable to such person.
“Augur Protocol” means the open-source protocol for creating and settling prediction markets deployed on the Ethereum blockchain. The underlying code is available at https://github.com/AugurProject.
“Augur Unit” means an interest that entitles the holder to receive Cryptoassets upon the Resolution of a Market if the holder is a Market Payee.
“Cryptoasset” means a cryptographic asset that exists on a blockchain.
“Customer” means a third-party principal on behalf of whom a Trading Member engages in Trades as agent.
“Digital Wallet” means an application or software that a Trading Member or Trading Member applicant uses to secure their private keys and send blockchain transactions.
“Dispute Round” means each 7-day period during which Augur Protocol users have the opportunity to dispute a Market’s tentative outcome.
“Draft Market” means a Member-Generated Market that is not yet activated and therefore all Orders in such Market are merely commitments to trade.
“Ether” means the Ethereum blockchain Cryptoasset that may be used to purchase computational resources to run decentralized applications or perform actions on the Ethereum blockchain.
“ERC-20” refers to a technical standard for issuing fungible Cryptoassets on the Ethereum blockchain that are standardized and compatible with applications that support this technical standard.
“Expiration” means the calendar day and time of day, if applicable, that the Market expires.
“KYC/AML Vendor” means any vendor that Veil has designated as a provider of know-your-customer and anti-money laundering services.
“Limit Order” shall have the meaning provided in Rule 3.4 of this Rulebook.
“Market” means any event or outcome market in which tradeable Units are offered on the Veil Platform, enabling Trading Members to take a position on the event or outcome.
“Market Emergency” means any occurrence or circumstance which, in Veil International’s opinion, requires immediate action, and which threatens, or may threaten, the Veil Platform in any way, including the integrity of the Veil Platform, or any Markets listed on the Veil Platform.
“Market Specifications” means the terms and conditions of a Market as published on the Veil Platform.
“Market Order” shall have the meaning provided in Rule 3.4 of this Rulebook.
“Market Payee” means a Trading Member that has a position that an Augur Protocol Smart Contract deems to be correct and therefore the Trading Member is entitled to a payment from the Market Smart Contract in Veil Ether.
“Member-Generated Market” means a Market that is created by a Trading Member.
“Memorandum and Articles of Association” means Veil International, Ltd.’s Memorandum and Articles of Association.
“Membership Registration Form” means the application materials that Veil International requires each Trading Member to complete and are posted to the Website.
“Message” means a transmission of an Order through the Veil Platform by a Trading Member.
“Notice of Violation” means a notice sent to a Trading Member by email that describes the nature of the Trading Member’s violation(s) of this Rulebook and the penalties for said violation(s).
“Order” means either a bid or an offer for Units entered on the Veil Platform.
“Order Book” means the listing place of all Orders entered on the Veil Platform.
“Prohibited Market” means a Member-Generated Market that is prohibited from being offered on the Veil Platform pursuant to Rule 3.7.
“Regulatory Agency” means any government body and any organization granted authority under statutory or regulatory provisions to regulate activity that occurs on or in connection with the Veil Platform.
“REP” means the Cryptoasset “reputation,” the native Cryptoasset of the Augur Protocol, which is used by reporters in connection with a Dispute Round.
“Resolution” means the date and time of the ultimate conclusion of a Market whereby Trading Members’ Cryptoassets locked in the Augur Smart Contract as collateral are distributed to the Market Payee(s).
“Resolution Source” means the data feed, website, or publication that the Market Specifications identify as the source for determining the correct outcome of a Market.
“Rulebook” means the Veil International Rulebook.
“Smart Contract” means pre-programmed self-executing contract that performs a function upon the occurrence of a condition.
“Terms of Service” means the Veil International Terms of Service, available at https://veil.co/legal/terms.
“Trading Member” means a person that Veil International has approved to trade directly without intermediation by a third-party broker on the Veil Platform.
“Trading Member Notices” means notices distributed by Veil International to Trading Members by email.
“Trade” means any purchase or sale of a Unit settled to the Ethereum blockchain by the 0x Protocol.
“Unit” means an ERC-20 Cryptoasset, each unit of which represents a unit of a particular Augur Unit that is locked up in a Smart Contract.
“User ID” means the unique identifier registered with Veil International that Veil International assigns to an Trading Member and which is included on each Order to enable Veil International to identify the person entering such Orders.
“Veil Ether” means an ERC-20 Cryptoasset, each unit of which represents one unit of Ether that is locked up in a Smart Contract.
“Veil International” means Veil International, Ltd.
“Veil Platform” means the Veil International Order transmission and matching platform.
“Web3 Application” means an application that enables persons to run Ethereum decentralized applications in their browser or an application without running a full Ethereum node. Such an application allows websites to retrieve data from the Ethereum blockchain and users to securely manage their Digital Wallet and sign Trades.
“Website” means the Veil International website (https://veil.co).
Rule 1.1: Ownership
Veil International is a Cayman Islands exempted company. The management and operation of Veil International is governed by the Memorandum and Articles of Association, as may be amended from time to time, and this Rulebook. Trading Member status does not confer any equity interest or voting right in Veil International.
Rule 1.2: Regulatory Status
The Veil Platform is a non-custodial peer-to-peer Order messaging and matching platform that enables Trading Members to transmit Messages, matches Orders, and transmits matched Orders to a 0x Protocol Smart Contract, which executes and clears these Trades on the Ethereum blockchain. Veil International is not licensed as a securities investment business under the Securities Investment Business Law (Revised) of the Cayman Islands (the “SIB Law”) in respect of its operation of the Veil Platform. Veil International is excluded from licensure under SIB Law because its activities in respect of the Veil Platform would be considered excluded activities under SIB Law. Neither Veil International nor the Veil Platform is licensed or registered in any capacity with any financial services regulator and therefore access to the Veil Platform is restricted to persons that are (1) able to meet the Trading Member qualifications contained in this Rulebook, including the jurisdiction requirement; and (2) not prohibited by Applicable Law from entering Orders on or transacting via the Veil Platform. Veil International is not responsible for determining or confirming whether it is legal for a Trading Member to use the Veil Platform in the Trading Member’s jurisdiction. Each Trading Member must determine whether the laws and regulations of their jurisdiction prohibit them from using the Veil Platform.
Rule 1.3: Emergency Rules
In the event of a Market Emergency or potential Market Emergency, Veil International may suspend use of the Veil Platform or take any other reasonably and commercially appropriate actions to address such issue. During this time, Trading Members may not be able to transmit Messages through the Veil Platform and the matching engine and Order Book may not partially or fully function. Veil International will make reasonable efforts to provide notice to Trading Members before or after acting to address the Market Emergency or potential Market Emergency, as practicable.
Rule 1.4: Hours of Operation
The Veil Platform is available for Order entry 24 hours each day; 7 days a week. However, the Veil Platform may close or be unavailable from time to time for the purposes of software upgrades, in the event of a Market Emergency, and for other reasons, in the sole discretion of Veil International. Veil International will provide reasonable notice to Trading Members in advance of such closure whenever it is commercially feasible to do so.
Rule 1.5: Open-Source Protocols
The Veil Platform relies on open-source software protocols built on top of and deployed to the Ethereum blockchain. Specifically, the Veil Platform utilizes the Augur Protocol to offer and resolve Markets and the 0x Protocol to structure Orders and execute and clear trades on the Ethereum blockchain. Veil International does not govern or control these protocols. These open-source protocols are governed in unique ways.
Augur is a decentralized protocol that is not controlled by any person, company or organization. The Forecast Foundation is a non-profit organization that publishes open-source software updates for Augur, which users of Augur may accept or disregard. The Forecast Foundation does not run or operate the Augur protocol.
The 0x Protocol is an open-source project that is designed to facilitate peer-to-peer ERC-20 Cryptoasset exchange interoperability among decentralized applications built on the Ethereum blockchain. Trades using the 0x Protocol are conducted by Smart Contracts, developed by an open-source team, that exchange ERC-20 tokens directly between the parties on the Ethereum blockchain.
For more information about these protocols, please refer to https://www.augur.net and https://0x.org.
Rule 2.1: Qualification for Trading Membership
- Access to the Veil Platform is restricted to Trading Members. Persons that are not Trading Members may not access or use the Veil Platform.
- To be eligible to become and remain a Trading Member, applicants must meet and certify that they meet the following criteria:
- The applicant must not be located in, organized in, or a resident of the United States, Cuba, Iran, Syria, North Korea, the Crimea region, or any other jurisdiction where Applicable law prohibits the applicant from accessing or using the Platform, and the applicant must not be named on the Office of Foreign Asset Control of the U.S. Department of the Treasury’s Specially Designated and Blocked Persons List. The applicant must not be an agent of or have Customers located in, organized in, or that are a resident of the same.
- The applicant agrees to submit to jurisdiction in the Cayman Islands.
- For firms, each natural person who has authority to use the Veil Platform and will do so on behalf of the firm must apply separately to be a Trading Member.
- The applicant must be eighteen (18) years of age or older and of appropriate age to enter a legally enforceable contract in their jurisdiction.
- If the applicant represents a firm, the firm must be validly organized, in good standing, and of good reputation and business integrity.
- If the applicant will trade on behalf of Customers, the applicant must provide Veil International and its AML/KYC Vendor with a Customer list and must provide Veil International and its AML/KYC Vendor with an updated Customer list before trading on behalf of new Customers.
- The applicant must hold all necessary licenses, authorizations, and consents, or benefit from applicable exemptions, to allow it to enter into peer-to-peer Trades with Trading Members.
- The applicant agrees to provide Veil’s AML/KYC Vendor with all information and documentation that the AML/KYC Vendor requests to allow it to verify the applicant’s identity, criminal background, country of origin, and other criteria for membership. Furthermore, the applicant understands and agrees that Veil or its AML/KYC Vendor may request further information from time to time.
- The applicant must have a Digital Wallet that it will link to its Trading Member account and use for purposes of transferring and receiving Cryptoassets and Units in connection with peer-to-peer Trades with Trading Members.
- The applicant must download a third-party Web3 Application that it will use to interact with the Veil Platform.
- The applicant must procure their own Ether and exchange such Ether for Veil Ether for use in peer-to-peer Trades with Trading Members.
Rule 2.2: Registration for Trading Membership
- Natural persons may apply to become a Trading Member by completing the Membership Registration Form available on the Veil International Website at https://app.veil.co/signup.
- By clicking through and submitting the Membership Registration Form, the applicant certifies that all information and documentation is accurate and agrees to promptly update Veil International and its KYC/AML Vendor in the event that the Trading Member determines that any of the information or documentation is inaccurate or expired.
- After an applicant’s Membership Registration Form has been approved by Veil International, the applicant becomes a Trading Member. As a Trading member, such person will be able to access the Veil Platform and transmit Messages.
Rule 2.3: Duties of Trading Members
- During the Trading Member application process, the applicant will be required to choose a User ID. Once registered as a Trading Member, the Trading Member will be required to enter the User ID and use their Digital Wallet to log onto and access secure portions of the Veil International Website and the Veil Platform. Each time that the Trading Member submits its User ID to Veil International and uses its Digital Wallet in order to log into the Website or Veil Platform, the Trading Member affirms that it understands and agrees to be bound by this Rulebook and other policies of Veil International, as amended.
- Each Trading Member must comply with this Rulebook and Applicable Law in their jurisdiction or otherwise. Each Trading Member agrees to cooperate promptly and fully with Veil International, its agents, and the Cayman Islands Monetary Authority in any investigation, call for information, inquiry, audit, examination, or proceeding. If any Trading Member fails to comply therewith, Veil International may revoke or suspend the Trading Member’s privileges in full or in part. Each Trading Member may also be subject to civil or criminal prosecution.
- Each Trading Member must keep and maintain records of their Orders and Trades for personal purposes and to comply with Applicable Law. Veil International will generate an Order and Trades log for each Trading Member, but each Trading Member is responsible for storing such records, as they may be removed from the Website from time to time. Trading Members must keep such records for a minimum of the greater of five years or the period required by Applicable Law.
- Each Trading Member consents to allow Veil International to use all information Veil International has about the Trading Member for purposes of maintaining the integrity of the Veil Platform, enforcement of the Rulebook, and compliance with Applicable Law.
- Each Trading Member consents to allow Veil International to provide all information Veil International has about the Trading Member to any Regulatory Agency, law enforcement authority, or judicial tribunal, including (as may be required by information-sharing agreements or other arrangements or procedures or other contractual, regulatory, or legal provisions) foreign regulatory or self-regulatory bodies, law enforcement authorities, or judicial tribunals.
- Each Trading Member that acts as agent for a Customer or other person must provide Veil International and its KYC/AML Vendor with a complete list of all Customers or persons for which the Trading Member acts as agent. The Trading Member represents and warrants that it has authority to act as agent for all of the Customers for which it intends to act as agent. The Trading Member has an ongoing obligation to ensure that the list is up to date, and may not act on behalf of any Customer or person that is not on the list or any for which it has not been granted, or no longer has, the authority to act as agent.
- Each Trading Member, upon a request of Veil International or any Regulatory Agency, must promptly respond to any requests for information.
- Each Trading Member must immediately notify Veil International in writing upon becoming aware:
- that the Trading Member or any of the Trading Member’s officers has been convicted of, pled guilty or no contest to, or entered a plea arrangement to any felony in any domestic, foreign or military court, or with any Regulatory Agency, as applicable;
- that the Trading Member or any of the Trading Member’s officers has been convicted of, pled guilty or no contest to, or entered a plea arrangement to a misdemeanor in any domestic, foreign or military court, or with any Regulatory Agency, as applicable, which involves:
- embezzlement, theft, extortion, fraud, fraudulent conversion, forgery, counterfeiting, false pretenses, bribery, gambling, racketeering, or misappropriation of funds securities or properties; or
- any transaction in or advice concerning swaps, futures, options, or securities;
- that the Trading Member or any of the Trading Member’s officers has been subject to, or associated with a firm that was subject to, regulatory proceedings before any Regulatory Agency; or
- of any other material change in any information contained in the Trading Member’s Trading Membership Form.
- Each Trading Member must diligently supervise all activities of the Trading Member’s employees and/or agents relating to Messages transmitted through the Veil Platform. Any violation of this Rulebook by any employee/agent of a Trading Member will constitute a violation of the Rulebook by such Trading Member.
- Each Trading Member will be liable for all costs and any losses that it may incur from Order messages relayed through the Veil Platform by any person, authorized or not, using its User ID and Digital Wallet. Veil International will not be responsible in any way for unauthorized Messages transmitted by a Trading Member or by those using such Trading Member’s User ID.
- Each Trading Member is responsible for contracting with an internet service provider through which it will access the Veil International Website and for having a backup service provider if the Trading Member deems it necessary. Each Trading Member is also responsible for maintaining an internet connection speed adequate for its needs. Veil International will not be responsible in any way for any orders delayed or trades missed or not executed in a timely fashion because of failure of the Trading Member’s internet service provider or slowness of its Internet connection speed.
- Each Trading Member must inform Veil International of: (i) any change to its email address within 24 hours after such change; (ii) any changes to the registration information provided in its Trading Membership Form promptly after any such change, including the addition or subtraction of a Digital Wallet associated with the Trading Member; (iii) other information provided in the Trading Member’s Trading Membership Form promptly after any such change.
- For account security and audit trail purposes, each Trading Member agrees that Veil International may maintain logs of the Trading Member’s Internet Protocol (“IP”) address and the location of all devices used by the Trading Member to access the Veil Platform.
- Veil International may in its discretion suspend a Trading Member’s account. It will provide the Trading Member with the reasoning for the suspension.
- Veil International may prohibit IP addresses and devices from accessing the Veil Platform, in its discretion.
- Each Trading Member must notify Veil International immediately upon becoming the subject of a bankruptcy petition, receivership proceeding, or the equivalent, or being unable to meet any financial obligation as it becomes due.
- Each Trading Member is responsible for maintaining commercially reasonable cybersecurity safeguards on the personal device that they use to access the Veil Platform.
Rule 2.4: Dues, Fees and Expenses Payable by Trading Members
- Trading Members are currently not required to pay dues.
- Trading Members may be charged fees in connection with Orders that are matched by the Veil Platform and Units sold to Veil International in an amount to be reflected from time to time on the Website and in Trading Member Notices.
- If Veil International determines in the future to impose dues or additional fees, Veil International shall notify Trading Members of any dues or additional fees that will be imposed at least 5 business days before they take effect. Veil International may provide such notice via a Trading Member Notice or by posting such notice to its Website, in its discretion.
Rule 2.5: User ID
- Trading Members must use their unique User ID and Digital Wallet to access the Veil Platform.
- No Person may use a User ID to access the Veil Platform except as permitted by this Rulebook, nor may any Trading Member knowingly permit or assist the unauthorized use of a User ID. Each Trading Member shall ensure that no User ID is used by any person not authorized by this Rulebook. Each Trading Member shall establish and maintain policies and procedures to ensure the proper use and protection of User IDs.
Rule 2.6: Limitations of Trading Membership
- The Veil Platform is a non-custodial Order transmission and matching application that allows Trading Members to transmit Messages to other Trading Members. Messages between Trading Members that are transmitted through the Veil Platform are not executed or cleared on or through the Veil Platform but rather are matched and transmitted to the Ethereum blockchain for execution and settlement through the 0x Protocol. The matching of Order messages through the Veil Platform occurs on an “off-chain” basis.
- Veil International does not have any control or ability to affect the Ethereum blockchain or the Augur or 0x protocols. Any Message that is transmitted through the Veil Platform might result in a Trade that cannot be made void, voidable, subject to rescission or otherwise invalidated or rendered unenforceable by Veil International. Trading Members use the Veil Platform to transmit Messages at their own risk.
- Trading Membership is limited to Veil International and does not make a Trading Member eligible to use any exchange or platform operated by Veil International’s affiliates.
Markets and Orders
Rule 3.1: Web3 Application Required
- Trading Members will not be able to transmit Messages through the Veil Platform without using a Web3 Application. Trading Members must download and install a Web3 Application and connect their Digital Wallet to the Web3 Application before using the Veil Platform.
- Trading Members’ Digital Wallets and keys are stored and decrypted in the Trading Member’s web browser or application and not on or through the Veil Platform. Veil International does not have access to this information and cannot assist in the recovery of a lost or compromised Digital Wallet or key.
Rule 3.2: Veil Platform Markets
Markets that are listed on the Veil Platform exist within the Augur ecosystem and rely on the Augur Protocol for settlement. Each Market listed on the Veil Platform is also represented on the Augur Protocol. Any person may purchase and sell Augur Units in a Market that is represented on the Augur Protocol but only Trading Members may exchange Augur Units for Units in a Market that is represented on the Veil Platform, trade Units on the Veil Platform, and sell Units to Veil International.
Rule 3.3: Market Types
- Binary: Trading Members may purchase Units in binary Markets that entitle them to a payout upon the occurrence or non-occurrence of a future outcome or event.
- Categorical: Trading Members may purchase Units in categorical Markets that entitle them to a payout based on whether one of multiple outcomes occurs.
- Scalar: Trading Members may purchase Units in scalar Markets that entitle them to a payout based on the future price of an underlying commodity, event outcome, or data point.
Rule 3.4: Order Type
- Market Order: Trading Members may enter market orders to purchase or sell Units at the best available price from the Order Book for such Units into the Veil Platform to be matched by the Veil Platform immediately, subject to availability. Market Orders are designed to be executed immediately.
- Limit Order: Trading Members may enter limit orders to purchase or sell Units at a fixed price into the Veil Platform to be matched by the Veil Platform if and when the Units are available on the Order Book at that price.
Rule 3.5: Order Entry
- Each Trading Member shall enter Orders using the Veil Platform. Each Trading Member shall be responsible for any and all Message transmitted through the Veil Platform using the User ID assigned to the Trading Member.
- All Orders placed in Draft Markets are merely commitments to trade and will only execute if and when the Draft Market is activated and becomes a Market. All Orders placed in Draft Markets are at the Trading Member’s own risk.
- A Trading Member may enter either a Market Order or Limit Order for the purchase or sale of Units in a Market.
- The Trading Member’s Market Order or Limit Order may be filled in whole or in part, depending upon the availability of the Units on the Veil Platform.
- Trading Members are required to honor all Orders which have not been withdrawn from the market.
- Orders are formatted according to the 0x Protocol order standard and must be cryptographically signed by a Trading Member using their Digital Wallet. Veil International is unable to edit any details of Orders once they have been submitted to the Order Book.
- Orders must be quoted in either Units or Veil Ether. Units in a given Market are redeemable for the same number of units of Augur Units in the same Market as represented on the Augur Protocol. Augur Units are not approved for trading with the 0x Protocol.
- Veil Ether is redeemable for Ether. Ether is not compliant with the ERC-20 standard and therefore not approved for trading with the 0x Protocol.
Rule 3.6: Member-Generated Markets
- Trading Members can create binary and scalar Member-Generated Markets by completing the “Create your own market” form on the Veil Platform. The form will require the Trading Member to input:
- a “market question” with which Trading Members will interact with (e.g., “Will the price of bitcoin reach $X on X date?”);
- an "expiratation" date upon which the Market will close;
- a "resolution source" (e.g., XYZ Co. Bitcoin Index) or rely upon "general knowledge" (i.e., the collective wisdom of multiple reputable data sources); and
- "resolution rules" that specify how the Market will reach Resolution (e.g., "The resolution price is the BTC/USD close price on X Date at 24:00 UTC as resported by XYZ Co.")
- After completing the form, the Trading Member must certify that the Member-Generated Market does not violate the Terms of Service or this Rulebook in order to save the Member-Generated Market as a draft and thereby create a Draft Market, subject to Veil International’s review. All Trading Members that create Member-Generated Markets certify and represent the following: "This Market is not in violation of Veil's Rulebook, including, but not limited to, Rules 3.7 and 7.14, or any applicable law, rule, or regulation."
- Each Draft Market is subject to review by Veil International before Trading Members may review and purchase/sell Units in the Draft Market.
- After the Draft Market passes through the review stage and posts to the Veil Platform, Trading Members may purchase and sell Units in that Draft Market. However, all such purchase and sale Orders are solely commitments to trade at this time. The Trading Member who created the Draft Market must activate the Draft Market, and thereby create a Market, or these Orders will not execute.
- The Trading Member who created the Draft Market must pay a fee to the Augur Protocol to activate the Draft Market. The fee is set by the Augur Protocol and Veil International does not receive any portion of it or have any control over it.
- Once the Trading Member activates the Market, all Orders placed by Trading Members during the period of time that the Market was in Draft Market form will finalize and execute.
- The Trading Member who created the Draft Market may modify it before it is activated and becomes a Market but this will cancel out all Order commitments placed by Trading Members prior to activation.
- Upon Expiration of the Market, the Trading Member who created the Market must submit a report through the Veil Platform specifying the outcome of the Market (i.e., how much money each outcome should be worth) that will be transmitted to the Augur Protocol to facilitate Resolution.
- In order to be eligible to receive fees from Veil International for creating a Member-Generated Market, each Trading Member will need to complete Member-Generated Market know-your-customer screening. After passing successfully through the know-your-customer screening process, the Trading Member who created the Market is entitled to receive 0.25% of each Order placed in the Market as a fee.
Rule 3.7: Prohibited Markets
Trading Members are prohibited from creating the following Prohibited Markets:
- A Market that references or has a “security”, as defined at 15 U.S.C. § 78c(a)(10) and 15 U.S.C. § 80a-2(a)(36), such as a stock, bond, investment contract, or security token, as the underlying asset, and/or is not denominated in, linked to, dependent upon, priced in relation to, or associated with a security.
- A Market that references and is linked to, priced in relation to, or associated with a liquidity event, such as a merger, initial public offering, or dissolution, of a U.S. company.
- A Market that is linked to, priced in relation to, or associated with the assassination of any person, the occurrence of a terrorist attack, or any other act of violence, act of a criminal nature or defamation.
- A Market that violates a third-party’s intellectual property rights.
- A Market where the Trading Member creator has the ability to control, either directly or indirectly, the pricing or valuation of the Market.
Rule 3.8: Failure to Activate a Member-Generated Market
In the absence of unforeseeable circumstances that render it impracticable for a Trading Member to activate a Member-Generated Market, it is prohibited for a Trading Member to fail to activate a Member-Generated Market for any reason other than because there is a reasonable lack of sufficient interest from Trading Members in the Market.
Rule 4.1: Settlement of Markets
Veil International does not maintain or operate a clearinghouse. The settlement of Markets is facilitated by the Ethereum blockchain and the Augur and 0x protocols. After the Veil Platform matches a Trading Member's Order, the Veil Platform transmits the Orders to the 0x Protocol, which executes and clears the Trade on the Ethereum blockchain. The Augur Protocol is responsible for automating the collection of margin, Resolution of Markets, and disbursement of Veil Ether to the Market Payee(s).
Rule 4.2: Full Collateralization of Exchange Contracts Required
Each Trading Member must deposit the applicable amount of Veil Ether required to fully collateralize Orders pursuant to Market Specifications to their Digital Wallet prior to submission of such Orders to the Veil Platform. A Trading Member will not be able to transmit a Message if the Trading Member does not have sufficient Veil Ether in their Digital Wallet. By purchasing a Unit in a Market using Veil Ether, the Trading Member is exchanging that Veil Ether for that Unit. One Unit is redeemable for one Augur Unit.
Rule 4.3: Margin Deposits
- Each Market on the Veil Platform is settled in Ether. Trading Members must obtain and deposit adequate Ether into the relevant Market’s Smart Contract using a Web3 Application to fully collateralize their position. Trading Members will not be able to deposit less than the full amount of collateral required per Market Specifications.
- If the Trading Member has adequate Ether in their Digital Wallet to purchase the Augur Unit(s) in a Market that they wish to purchase, the Trading Member will be able to do so by transferring the Ether to that Market’s Smart Contract. The Smart Contract will accept the Ether to hold as collateral and transfer the Augur Unit(s) to the Trading Member.
- The Smart Contract will not return the Trading Member’s collateral to the Trading Member unless the Trading Member is entitled to receive it under the Market upon the Market’s Resolution.
Rule 5.1: Units
- Upon depositing Ether into the Market’s Smart Contract as margin via a Web3 Application, the Trading Member will receive Augur Units representing their position from the Smart Contract.
- Augur Units entitle the Trading Member to receive a fixed amount of Ether from the Smart Contract at Resolution if the Market resolves such that the Trading Member is a Market Payee.
- The Ether that the Trading Member sends to the Market Smart Contract as margin will be included in the settlement payment that the Smart Contract transfers to the Market Payee(s) upon Resolution.
- Augur Units are extinguished upon transfer of Ether from the Market Smart Contract to the Market Payee(s).
- Every Augur Unit may be converted to one Unit. A Unit is redeemable for one Augur Unit and is approved for trading through the 0x Protocoo.
- Units are transferrable to other Veil International and other Trading Members before Resolution.
Rule 5.2: Redemption of Units
- ading Member may redeem their shares in one of two ways:
- Redemption through Veil International ("Instant Settlement"): The Trading Member may sell their Unit(s) to Veil International after Expiration for Veil Ether at a quoted rate posted on the Veil Platform plus a fee. Veil International assumes the risk that the Market will be disputed during the Dispute Round and that the Unit(s) depreciate in value.
- Redemption through Augur: The Trading Member may wait until Resolution, redeem their Units for Augur Units, and then redeem their Augur Units for Ether through the Augur Smart Contract. However, if redemption is made through Augur, the Trading Member assumes the risk that the Market will be disputed in one or more Dispute Rounds and the Trading Member will not receive the Ether.
Rule 6.1: Designated Reporter
Veil International will be the Designated Reporter for all Markets that are listed on the Veil Platform, meaning that Veil International will report the price of the underlying commodity or event outcome upon Expiration of the Market. Markets that are listed on the Veil Platform all specify a Resolution Source, which may be a data feed maintained by Veil International or a public website on the Internet. When a Trading Member creates a Member-Generated Market, the Trading Member must designate a Resolution Source.
Rule 6.2: Veil International Data Feeds
Data feeds maintained by Veil International are public time series indices of prices or data points. Veil International data feeds are updated at least once per minute.
Rule 6.3: Resolution
If the Trading Member has any Units at Resolution when the Designated Reporter posts the outcome, the Trading Member will have two options for exchanging their Units for Veil Ether. First, the Trading Member may sell their Units to Veil International at the price reported by the Designated Reporter. This option is immediate and is subject to a fee. Second, the Trading Member may withdraw the Units and redeem them for Veil Ether from the Market Smart Contract directly when the Market is finalized on Augur upon Resolution.
In order for the Market to be finalized on Augur, the Market may go through multiple states memorialized in the Augur Protocol: “Waiting for the next fee window”, “Dispute round”, “Fork” and “Finalized.”
When the Designated Reporter submits the initial outcome, that outcome becomes the “tentative outcome” of the Market and the Market enters the “Waiting for the next fee window” state. During this state any form of reporting and dispute process is on hold. This phase can take up to 7 days and is predetermined by the Augur Protocol. Once the next fee window starts, the market enters the “Dispute round” state.
The “Dispute round” is a 7-day long process. Any REP holder can stake REP on an alternative outcome (the Augur whitepaper calls this a “dispute stake”) to dispute the “tentative outcome” of the Market. The dispute process is successful if the REP staked on an alternative outcome is above a certain threshold (the Augur white paper calls this the “dispute bond size”).
If there are no successful disputes, the market is “finalized”, the tentative outcome is final, and the Trading Member can send the Units to the Market Smart Contract in exchange for an amount of Veil Ether determined by the outcome.
If there is a successful dispute, there are two possible scenarios: either (1) if the size of the staked REP is less than 2.5% of all circulating REP, the tentative outcome is updated, and the market enters another dispute round; or (2) if the size of the staked REP is more than 2.5% of all circulating REP, then the market enters the “fork” state which could last up to 60 days.
Trading Practices and Conduct
Rule 7.1: Trading Confined to Veil Platform
All trading in Veil Platform Markets must occur on or through the Veil Platform and in accordance with this Rulebook.
Rule 7.2: Fraud and Manipulation Prohibited
No person shall engage in any fraudulent act, trading strategy or scheme to defraud, deceive, trick or mislead, or any intentional manipulation of the market, whether attempted or completed.
Rule 7.3: Acts Detrimental to the Reputation of Veil International Prohibited
No Trading Member shall engage in any activity on the Veil Platform that tends to impair the reputation, integrity or good name of Veil International.
Rule 7.4: Misuse of the Veil Platform
It is strictly prohibited to misuse the Veil Platform. It shall be deemed an act detrimental to Veil International to permit unauthorized use of the Veil Platform, to assist any person in obtaining unauthorized access to the Veil Platform, to trade on the Platform without an agreement, to alter the equipment associated with the Veil Platform (except with Veil International’s prior consent), to interfere with the operation of the Veil Platform, to intercept or interfere with information provided thereby, or in any way to use the Veil Platform in a manner contrary to this Rulebook.
Rule 7.5: Wash Trades Prohibited
No person shall place or accept Orders in the same Market where the person knows or reasonably should know that the purpose of the Orders is to avoid taking a bona fide market position exposed to market risk (i.e., a “wash trade”). A Trading Member shall not enter Orders for different Customers with the intent to negate market risk or price competition. No person shall execute or accommodate the execution of such Orders.
Rule 7.6: Prearranged, Pre-Negotiated and Noncompetitive Trades Prohibited
No person shall prearrange or pre-negotiate any purchase or sale or noncompetitively transmit any Message.
Rule 7.7: Disruptive Practices Prohibited
- No person shall enter or cause to be entered an Order that is not in good faith and for legitimate purposes.
- No person shall enter or cause to be entered an Order with the intent, at the time of Order entry, to cancel the Order before execution or to modify the Order to avoid execution.
- No person shall enter or cause to be entered an actionable or non-actionable Message or Messages with intent to mislead other Trading Members.
- No person shall enter or cause to be entered an actionable or non-actionable Message or Messages with intent to overload, delay, or disrupt the systems of the Veil Platform or other Trading Members.
Rule 7.8: Trading Against Customer Orders Prohibited
No person in possession of a Customer Order shall knowingly take, directly or indirectly, the opposite side of such Order for its own account, an account in which it has a direct or indirect financial interest, or another Customer.
Rule 7.9: Withholding Customer Order Prohibited
No Trading Member shall withhold or withdraw from the Order Book any Customer Order, or any part of an Order, for the benefit of any person other than the Customer.
Rule 7.10: Crossing Orders
Independently initiated Orders on opposite sides of the market for different beneficial account owners, such as different Customers or a Trading Member’s proprietary account and a Customer account, that are immediately executable against each other may be entered without delay provided the Orders did not involve non-permissible pre-execution communications.
Rule 7.11: Customer Order Priority
No Trading Member shall knowingly enter an Order on the Veil Platform for its own account, an account in which it has a direct or indirect financial interest, or a Customer account, when such person is in possession of a Customer Order that can be but has not been entered on the Veil Platform.
Rule 7.12: Supervision; Information Sharing
- Each Trading Member must establish, maintain and administer reasonable supervisory procedures to ensure that its agents and employees comply with this Rulebook and Applicable Law, and such Trading Member may be held accountable for the actions of such agents and employees with respect to the Veil Platform.
- Trading Members shall cooperate fully with Veil International or a Regulatory Agency in any investigation, call for information, inquiry, audit, examination or proceeding.
- Trading Members shall ensure that all information disclosed to Veil International and its KYC/AML Vendor is accurate, complete and consistent. No existing or prospective Trading Member shall make any false statements or misrepresentations in any communication to Veil International or its KYC/AML Vendor.
Rule 7.13: Standards of Conduct
Trading Members shall conduct trading activities in an honorable and principled manner consistent with this Rulebook and adhere to the following ethical standards:
- Trading Members shall abstain from engaging in conduct that is a violation of this Rulebook or Applicable Law and conduct their business in accordance with Applicable Law, and in good faith, with a commitment to honest dealing.
- Trading Members shall not engage in any fraudulent act or engage in any scheme to defraud, deceive, trick or mislead in connection with or related to any trading activity.
- Trading Members shall not knowingly enter, or cause to be entered, Messages on the Veil Platform other than in good faith for the purpose of executing bona fide Trades.
Rule 7.14: Member-Generated Market Transactions
- Trading Members shall not purchase Units in the Member-Generated Markets that they create for the purpose of generating an artificial impression of liquidity or otherwise encouraging Trading Members to purchase Units in such Markets.
- Trading Members shall not place Orders based on knowledge of whether a Draft Market will be activated.
- Trading Members shall not place Orders in a Member-Generated Market that they believe to be a Prohibited Market under Rule 3.7. Trading Members may notify Veil International about such Markets and inquire as to the nature of them as Prohibited Markets by contacting Veil International at firstname.lastname@example.org.
- Trading Members shall not take any actions to knowingly affect or manipulate the price of any Member-Generated Market.
Enforcement of the Rulebook
Rule 8.1: Market Surveillance
Veil International shall monitor Orders and Order cancellations transmitted by Trading Members through the Veil Platform and investigate potential or alleged violations of this Rulebook. Veil International may also review Digital Wallet address activity of Trading Members. Veil International may enter into information sharing arrangements with other exchanges or Regulatory Agencies as appropriate to comply with Applicable Law or enforce the Rulebook.
Rule 8.2: Complaints
Any person may file a complaint to report potential violations of this Rulebook by email to email@example.com. Veil International will review each complaint and investigate the alleged violations in a timely manner.
Rule 8.3: Investigations
Veil International may open an investigation of a Trading Member based upon its market surveillance efforts or a complaint. To prevent further violation of this Rulebook, Veil International may temporarily suspend a Trading Member’s account during the pendency of an investigation.
Rule 8.3: Notice of Violation
If Veil International reasonably believes that a Trading Member has committed a violation of this Rulebook, it will send a Notice of Violation to the Trading Member by email that states the nature of the violation and any penalties.
Rule 8.4: Penalties for Violation of Rulebook
Veil International may suspend or terminate a Trading Member for violation of any aspect of this Rulebook. It may also pursue legal action against a Trading Member for such a violation. Veil International will report persons that engage in illegal activity on the Veil Platform to the applicable Regulatory Agency or law enforcement. Each Trading Member expressly consents to and submits to the jurisdiction of Veil International for purposes of enforcing the Rulebook and Applicable Law.
Rule 8.5: Appeals
Upon receipt of a Notice of Violation, a Trading Member may, within 10 days of receiving a Notice of Violation, file a written appeal of the decision with Veil International by email to firstname.lastname@example.org. The appeal must include reasoning or evidence in support of the appellant’s position. Veil International’s Appeals Officer will review the appeal and reach a final decision on the matter.
Trading Member Disputes
Rule 9.1: Involvement of Veil International
Veil International will not provide a forum or method for the resolution of disputes between Trading Members or Customers. Veil International will involve itself in such disputes only if required by Applicable Law or if, in its sole discretion, it determines that its participation in the dispute is in the interest of maintaining the integrity of the Veil Platform or enforcing the Rulebook.
Rule 9.2: Disputes Between Trading Members
Veil International does not resolve disputes between Trading Members. Disputes between and among Trading Members shall be settled by the Trading Members in a manner decided upon by the Trading Members involved in the dispute.
Rule 9.3: Disputes Between Trading Members and Customers
Veil International does not resolve disputes between Trading Members and their Customers. Disputes between and among Trading Members and their Customers shall be settled by the Trading Members and Customers in a manner decided upon by the Trading Members and Customers involved in the dispute.
Rule 10.1: Limitation of Liability; No Warranties
- EXCEPT AS OTHERWISE SET FORTH IN THE RULES OR OTHERWISE UNDER APPLICABLE LAW, NEITHER VEIL INTERNATIONAL NOR ANY OF ITS REPRESENTATIVES, AFFILIATES OR AFFILIATES’ REPRESENTATIVES SHALL BE LIABLE TO ANY PERSON, OR ANY PARTNER, DIRECTOR, OFFICER, AGENT, OR EMPLOYEE THEROF FOR ANY LOSS, DAMAGE, INJURY, DELAY, COST, EXPENSE, OR OTHER LIABILITY OR CLAIM, WHETHER IN CONTRACT, TORT OR RESTITUTION, OR UNDER ANY OTHER CAUSE OF ACTION, SUFFERED BY OR MADE AGAINST THEM AS A RESULT OF THEIR USE OF SOME OR ALL OF THE VEIL PLATFORM FOR AN AMOUNT EXCEEDING THE AMOUNT OF FEES PAID BY THE PERSON TO VEIL INTERNATIONAL, IF ANY, IN THE TWELVE (12) MONTH PERIOD IMMEDIATELY PRECEDING THE EVENT GIVING RISE TO THE CLAIM FOR LIABILITY AND BY MAKING USE OF THE VEIL PLATFORM, SUCH PERSONS EXPRESSLY AGREE TO ACCEPT ALL LIABILITY ARISING FROM THEIR USE OF SAME.
- EXCEPT AS OTHERWISE SET FORTH IN THIS RULEBOOK OR OTHERWISE UNDER APPLICABLE LAW, NEITHER VEIL INTERNATIONAL NOR ANY OF ITS REPRESENTATIVES, AFFILIATES OR AFFILIATES’ REPRESENTATIVES SHALL BE LIABLE TO ANY PERSON, OR ANY PARTNER, DIRECTOR, OFFICER, AGENT, OR EMPLOYEE THEREOF, FOR ANY LOSS, DAMAGE, INJURY, DELAY, COST, EXPENSE, OR OTHER LIABILITY OR CLAIM, WHETHER IN CONTRACT, TORT OR RESTITUTION, OR UNDER ANY OTHER CAUSE OF ACTION, SUFFERED BY OR MADE AGAINST THEM, ARISING FROM (A) ANY FAILURE OR NON-AVAILABILITY OF THE VEIL PLATFORM; (B) ANY ACT OR OMISSION ON THE PART OF VEIL INTERNATIONAL, ITS REPRESENTATIVES, AFFILIATES OR AFFILIATES’ REPRESENTATIVES INCLUDING WITHOUT LIMITATION A DECISION OF THE EXCHANGE TO SUSPEND, HALT, OR TERMINATE TRADING OR TO VOID, NULLIFY OR CANCEL ORDERS OR TRADES IN WHOLE OR IN PART; (C) ANY ERRORS OR INACCURACIES IN INFORMATION PROVIDED BY VEIL INTERNATIONAL, ITS AFFILIATES OR THE VEIL PLATFORM; (D) UNAUTHORIZED ACCESS TO OR UNAUTHORIZED USE OF THE VEIL PLATFORM BY ANY PERSON; (E) ANY FAILURE OF THE VEIL PLATFORM, THE ETHEREUM BLOCKCHAIN, THE AUGUR PROTOCOL OR THE 0X PROTOCOL, THE TRADING MEMBER’S OWN SYSTEMS, OR ANY DEVELOPER TOOL OR WEB3 APPLICATION THAT IS USED TO INTERACT WITH THE AFOREMENTIONED; (F) A PERSON NOT RECEIVING ETHER AS A RESULT OF THE UNFAVORABLE RESOLUTION OF AN AUGUR MARKET OR A FAILURE OF THE AUGUR PROTOCOL; OR (G) ANY FORCE MAJEURE EVENT AFFECTING VEIL INTERNATIONAL. THIS LIMITATION OF LIABILITY WILL APPLY REGARDLESS OF WHETHER OR NOT VEIL INTERNATIONAL, ANY VEIL INTERNATIONAL REPRESENTATIVES, ANY VEIL INTERNATIONAL AFFILIATES OR AFFILIATES’ REPRESENTATIVES (OR ANY DESIGNEE THEREOF) WAS ADVISED OF OR OTHERWISE MIGHT HAVE ANTICIPATED THE POSSIBILITY OF SUCH DAMAGES.
- EACH PERSON’S USE OF THE VEIL PLATFORM, VEIL INTERNATIONAL PROPERTY AND ANY OTHER INFORMATION AND MATERIALS PROVIDED BY VEIL INTERNATIONAL IS AT THE PERSON’S OWN RISK, AND THE VEIL PLATFORM, VEIL INTERNATIONAL PROPERTY AND ANY OTHER INFORMATION AND MATERIALS PROVIDED BY VEIL INTERNATIONAL HEREUNDER ARE PROVIDED ON AN “AS IS” AND “AS AVAILABLE” BASIS, WITHOUT WARRANTIES OR REPRESENTATIONS OF ANY KIND, EXPRESS OR IMPLIED, BY STATUTE, COMMON LAW OR OTHERWISE, INCLUDING ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT, AND ANY WARRANTIES ARISING FROM A COURSE OF DEALING, USAGE OR TRADE PRACTICE. VEIL INTERNATIONAL DOES NOT GUARANTEE THAT (A) VEIL INTERNATIONAL PROPERTY OR THE VEIL PLATFORM WILL OPERATE IN AN ERROR-FREE, SECURE OR UNINTERRUPTED MANNER; (B) ANY INFORMATION OR MATERIALS PROVIDED BY VEIL INTERNATIONAL OR ACCESSIBLE THROUGH VEIL INTERNATIONAL PROPERTY OR THE VEIL PLATFORM WILL BE ACCURATE, COMPLETE, RELIABLE, OR TIMELY; OR (C) VEIL INTERNATIONAL PROPERTY OR ANY ASPECTS OF THE VEIL PLATFORM WILL BE FREE FROM VIRUSES OR OTHER HARMFUL COMPONENTS. VEIL INTERNATIONAL SHALL HAVE NO LIABILITY FOR THE CREDITWORTHINESS OF ANY PERSON OR FOR THE ACTS OR OMISSIONS OF ANY PERSON UTILIZING THE VEIL PLATFORM OR ANY ASPECT OF VEIL INTERNATIONAL OR THE VEIL PLATFORM. EACH PERSON ACCESSING THE VEIL PLATFORM IS SOLELY RESPONSIBLE FOR THE SECURITY AND INTEGRITY OF ITS TECHNOLOGY. EACH PERSON’S ACCESS TO THE VEIL PLATFORM MAY BE INTERNET-BASED AND VEIL INTERNATIONAL HAS NO CONTROL OVER THE INTERNET OR A PERSON’S CONNECTIONS THERETO. ANY PERSON ACCESSING THE VEIL PLATFORM ACKNOWLEDGES THAT THE INTERNET, COMPUTER NETWORKS, AND COMMUNICATIONS LINKS AND DEVICES NECESSARY TO ENABLE A PERSON TO ACCESS AND USE THE VEIL PLATFORM ARE INHERENTLY INSECURE AND VULNERABLE TO ATTEMPTS AT UNAUTHORIZED ENTRY AND THAT NO FORM OF PROTECTION CAN ENSURE THAT A PARTICIPANT’S DATA, HARDWARE, OR SOFTWARE OR THE PLATFORM OR OTHER VEIL INTERNATIONAL PROPERTY WILL BE FULLY SECURE. FURTHERMORE, VEIL INTERNATIONAL SHALL HAVE NO OBLIGATION TO MONITOR OR VERIFY ANY INFORMATION DISPLAYED THROUGH THE VEIL PLATFORM.
- NO TRADING MEMBER OR ANY OTHER PERSON SHALL BE ENTITLED TO COMMENCE OR CARRY ON ANY PROCEEDING AGAINST VEIL INTERNATIONAL, ANY OF ITS REPRESENTATIVES, AFFILIATES OR AFFILIATES’ REPRESENTATIVES, IN RESPECT OF ANY ACT, OMISSION, PENALTY OR REMEDY IMPOSED PURSUANT TO THE RULEBOOK.
- NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, IN NO EVENT SHALL VEIL INTERNATIONAL OR ANY OF ITS REPRESENTATIVES, AFFILIATES OR AFFILIATES’ REPRESENTATIVES BE LIABLE FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, PUNITIVE OR SPECIAL DAMAGES (WHETHER OR NOT VEIL INTERNATIONAL OR ANY SUCH PERSON HAD BEEN INFORMED OR NOTIFIED OR WAS AWARE OF THE POSSIBILITY OF SUCH DAMAGES). NO PERSON MAY BRING A CLAIM AGAINST VEIL INTERNATIONAL OR ANY OF REPRESENTATIVES, AFFILIATES OR AFFILIATES’ REPRESENTATIVES FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, PUNITIVE OR SPECIAL DAMAGES.
- ALL DISPUTES ARISING OUT OF OR RELATED TO THIS RULEBOOK AND THE VEIL PLATFORM SHALL BE GOVERNED BY SECTION 12 OF THE TERMS OF SERVICE, AVAILABLE AT HTTPS://VEIL.CO/LEGAL/TERMS.
- THE LIMITATIONS ON LIABILITY IN THIS RULE 10.1 SHALL NOT PROTECT ANY PARTY FOR WHICH THERE HAS BEEN A FINAL DETERMINATION (INCLUDING EXHAUSTION OF ANY APPEALS) BY A COURT OR ARBITRATOR TO HAVE ENGAGED IN WILLFUL OR WANTON MISCONDUCT OR FRAUD.
- RECORDS OF TRADES MAY BE RECORDED ON THE ETHEREUM BLOCKCHAIN AND THEREBY PUBLICLY ACCESSIBLE INDEFINITELY. NEITHER VEIL INTERNATIONAL NOR ANY OF ITS REPRESENTATIVES, AFFILIATES OR AFFILIATES’ REPRESENTATIVES SHALL BE LIABLE FOR ANY DAMAGES THAT RESULT FROM THE EXISTENCE OR MAINTENANCE OF SUCH RECORDS.
Rule 10.2: Amendments to Rulebook
From time to time, this Rulebook may be amended or repealed, or new rules may be adopted. An amendment to a rule, repeal of a rule or adoption of a new rule shall be published by Veil International to the Website together with the effective date for the new rule. Veil International may not provide advance notice of the amendment to a rule, repeal of a rule or adoption of a new rule.
Rule 10.3: Governing Law
This Rulebook shall be governed by the laws of the Cayman Islands, without regard to conflict of law rules or principles (whether of the Cayman Islands or any other jurisdiction) that would cause the application of the laws of any other jurisdiction. You agree that Veil International may initiate a proceeding related to this Rulebook or the enforcement or validity of our intellectual property rights in any court having personal jurisdiction. Save as aforesaid, the courts located in the Cayman Islands will have exclusive jurisdiction over claims against Veil International arising out of or in any way connected with this Rulebook, the Veil Platform, or Veil International. You waive any objection to venue in any such courts.