Company: CNCKW
Filing Date: 2025-07-30
Form Type: 20-F
Source: 0001628280-25-036727
Chunk: 37

Company: Coincheck Group N.V.
Filing Date: 2025-07-30
Form: 20-F
Item: Item 3
Chunk 37
---

batch overflow bug was found in many Ethereum-based ERC20-compatible smart contract tokens that allowed

hackers to create a large number of smart contract tokens, causing multiple crypto asset platforms worldwide to shut

down ERC20-compatible token trading. Similarly, in March 2020, a design flaw in the MakerDAO smart contract

caused forced liquidations of crypto assets at significantly discounted prices, resulting in millions of dollars of losses

to users who had deposited crypto assets into the smart contract. If any such vulnerabilities or flaws come to fruition,

smart contract-based crypto assets, including those held by us for our customers, may be affected by negative

publicity, be exposed to security vulnerabilities, decline significantly in value, and lose liquidity over a short period

of time.

In some cases, smart contracts can be controlled by one or more “admin keys” or users with special

privileges, or “super users.” These users have the ability unilaterally to make changes to the smart contract, enable or

disable features on the smart contract, change how the smart contract receives external inputs and data, and make

other changes to the smart contract. For smart contracts that hold a pool of reserves, these users may also be able to

extract funds from the pool, liquidate assets held in the pool, or take other actions that decrease the value of the

assets held by the smart contract in reserves. Even for crypto assets that have adopted a decentralized governance

mechanism, such as smart contracts that are governed by the holders of a governance token, such governance tokens

can be concentrated in the hands of a small group of core community members, who would be able to make similar

changes unilaterally to the smart contract. If any such super user or group of core members unilaterally make

adverse changes to a smart contract, the design, functionality, features and value of the smart contract, and its related

crypto assets, may be harmed. In addition, assets held by the smart contract in reserves may be stolen, misused,

burnt, locked up or otherwise become unusable and irrecoverable. These super users can also become targets of

hackers and malicious attackers. If an attacker is able to access or obtain the super user privileges of a smart

contract, or if a smart contract’s super-users or core community members take actions that adversely affect the smart

contract, our customers who hold and transact in the affected crypto assets may experience decreased functionality

and value of the applicable crypto assets, up to