Company: CNCKW
Filing Date: 2025-07-30
Form Type: 20-F
Source: 0001628280-25-036727
Chunk: 44

Company: Coincheck Group N.V.
Filing Date: 2025-07-30
Form: 20-F
Item: Item 3
Chunk 44
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We are exposed to certain credit risks due to our reliance on third-party cryptocurrency exchange brokers

with whom we execute cover transactions to hedge our exposure to specific crypto assets. Our counterparties in our

hedging transactions (which we refer to as our cover counterparties) are composed of a relatively small number of

financial institutions and cryptocurrency exchange brokers. We borrow crypto assets from our customers and, in

order to be able to hedge by executing cover transactions, hold a portion of those borrowed crypto assets in our

accounts with such cryptocurrency exchange brokers. If such cover counterparty should go bankrupt or retain such

crypto assets for some other unanticipated reason, we would still be responsible for returning such crypto assets to

our customers. We self-impose, as a risk management policy, an overall risk limit amount and specific limits per

cover counterparty on a daily basis. We also seek to stay alert for information that could lead to credit, legal or

reputational concerns about a cryptocurrency exchange broker we deal with. If concerns arise, we take measures to

avoid or reduce the risk, such as reducing the amount on deposit with the affected cover counterparty and

transferring the assets to alternative cover counterparties. If credit, legal or reputational concerns regarding all of the

cryptocurrency exchange brokers we transact with for a particular crypto asset were to arise, we would likely then

attempt to use our own Exchange platform or other OTC counterparties capable of netting settlement to execute

cover transactions. If these alternatives are not feasible for a particular crypto asset, however, we may need to

temporarily suspend the trading and handling of the affected crypto asset, which could adversely affect our results of

operations and our business reputation. On March 24, 2023, Binance, one of our cover counterparties, suffered an

outage and suspended the trading of all crypto assets for a number of hours. As of the same date, our crypto assets

deposited with Binance had increased to ¥194 million due to an increase in crypto asset prices. Although we were

able to successfully use alternative counterparties without disruption to our services in this instance, we may not be

successful in doing that in the future if a similar situation with a cover counterparty arises. We are still obligated to

complete transactions which have already been placed by customers and accepted by our system, even if we are

unable to execute cover transactions.

We transact with both Japanese and international counterparties, and our largest single credit exposure as