Exchange Trading Rules
Last updated: November 19, 2023
Introduction
These exchange trading rules (“Rules”) specify the requirements and conditions for Users to trade on the Virtual Asset exchange platform, mobile application or other platforms (collectively, “Platform”) operated by Trek Labs Ltd FZE d/b/a Backpack Exchange (“Backpack Exchange”), a company established in the Emirate of Dubai and licensed and regulated by Dubai Virtual Assets Regulatory Authority (“VARA”) under license number VL/23/07/001.
These Rules govern the use of the Platform including access to the Order Book and the Orders placed via Platform.
Capitalized terms not defined herein shall have the meanings ascribed to them in the Backpack Exchange User Agreement (“User Agreement”) entered into between the User and Backpack Exchange.
Each User expressly agrees to be bound and comply with these Rules and any rules, procedures, notices, instructions or directions issued by Backpack Exchange pursuant to these Rules.
Users must read and acknowledge the Risk Disclosure Statement, before trading on the Platform.
These Rules form part of the User Agreement entered into between each User and Backpack Exchange and in the event of any conflict between these Rules and the User Agreement, these Rules shall prevail.
These Rules along with the User Agreement and the Risk Disclosure Statement constitute a binding contract between Backpack Exchange and each User of the Platform.
Applicability
These Rules shall be applicable to all Users and to all transactions facilitated on the Platform.
These Rules and amendments thereto shall be effective from the date of the publication.
Users of the Platform shall be subject to these Rules until they cease to be a User, for any reason whatsoever. A former User shall be bound by these Rules in respect of all activities which took place prior to termination of the User’s access and privileges.
Scope of Backpack Exchange’s powers
Backpack Exchange is empowered under these Rules to supervise its market. Without limitation, Backpack Exchange reserves the right to:
notify terms, conditions, rules, restrictions, and procedures for registration of Users;
notify terms, conditions, rules, restrictions and procedures to be complied with for admission and continued inclusion, of Virtual Asset(s) or other tokens, for trading on the Platform;
stipulate the terms, conditions, rules, restrictions, and procedures, including the time, mode and manner, for Execution of trades between Users and the trading and settlement procedures for Backpack Exchange’s market in compliance with the Applicable Laws and Regulations;
determine fees and other charges payable to Backpack Exchange by Users;
initiate disciplinary proceedings against Users and impose disciplinary actions as per Rules 13 and 14 of these Rules;
take such actions as Backpack Exchange deems necessary to ensure fair and orderly trading in the market;
notify the terms, conditions and procedures to suspend or terminate a User’s access to the Platform;
Impose restrictions on a User’s usage of the Platform including trading limits;
impose suspension of trading;
amend these Rules from time to time;
undertake any measures or steps as may be mandated by VARA, or any other Competent Authority in relation to Backpack Exchange’s Platform, the listed Virtual Assets or the Users;
exercise any other powers which Backpack Exchange may have under the User Agreement; and
exercise any powers which it may have under Applicable Laws and Regulations.
User Access and Code of Conduct
Backpack Exchange enables Users to directly trade on the Platform, without the involvement of any intermediary or member, upon successful completion of the onboarding process of Backpack Exchange.
Backpack Exchange conducts due diligence of each new User before onboarding and monitors their ongoing compliance with the Applicable Laws and Regulations.
The admission of any applicant as a User shall be at the sole discretion of Backpack Exchange.
Backpack Exchange will grant access to the Platform or its services only to an applicant who has completed Backpack Exchange's onboarding requirements, including AML-KYC procedures.
As part of the onboarding process, applicants are required to provide Backpack Exchange with relevant information and documentation for identity verification and other screening procedures. Based on Backpack Exchange’s risk assessment, Backpack Exchange may at its discretion, require an applicant to provide additional documents/information.
Backpack Exchange shall, on an ongoing basis, review client due diligence (“CDD”) records to ensure that the records are up-to-date and that no identification documents provided have expired.
The User acknowledges that Backpack Exchange, either directly or through a third party, may conduct necessary checks to verify the User's identity, identify traces of money laundering, terrorist financing, fraud or other financial crimes or for other lawful purposes. These checks may include but are not limited to (a) verifying the User's identity information in public reports, such as their name, address, past addresses, or date of birth; and (b) taking actions that Backpack Exchange deems reasonably necessary based on the results of such verifications and reports.
Backpack Exchange may, in its absolute discretion, accept the applicant as a User, if the applicant complies with Rule 4.2 and Rule 4.3, and satisfies the criteria in Rule 5.
Backpack Exchange retains the absolute right, without any liability or obligation to provide an explanation, to suspend or terminate a User's access to the Platform in accordance with the terms outlined in the User Agreement and these Rules. In case of such suspension or termination of access, Backpack Exchange will notify the user via email or other forms of communications permitted by the User.
Backpack Exchange shall engage in ongoing monitoring of the User's transactions on the Platform and retains the right to request supplementary documentation or information from the User concerning any transaction conducted on the Platform.
Backpack Exchange reserves the right to classify the User as a Retail Investor or an Institutional Investor, in accordance with the Applicable Laws and Regulations.
Eligibility Criteria
By registering to open and use a Backpack Exchange Account, the applicant represents and warrants that the applicant:
is a natural person above 21 years of age or a legal person validly organized and in good standing under the Applicable Laws and Regulations;
as a natural person or legal person has full legal capacity and sufficient authorizations to be bound and comply with these Rules;
has not previously been suspended or terminated as a User of Backpack Exchange or any other Virtual Asset exchange;
does not have an existing account with Backpack Exchange;
if a natural person, is applying for an Account exclusively for their own use and not on behalf of any other person;
if acting as an employee, agent of or on behalf of a legal entity, the applicant has all the necessary rights and authorizations to bind such legal entity and to access and use the Platform on behalf of such legal entity;
has full power and authority to enter into the User Agreement and in doing so will not violate any other agreement to which the applicant is a party;
is not located in, or a citizen or resident of any state, country, territory, or other jurisdiction where access to the Platform or the use of Backpack Exchange’s services may be restricted or prohibited by Backpack Exchange (for example, jurisdictions that are subject to economic sanctions);
has not been named on any sanctions list or otherwise subject to any applicable sanctions;
is of sufficient good repute;
has sufficient technical competence to use the facilities of the Platform;
has read and understood the Risk Disclosure Statement and other risks associated with the use of the Platform or Virtual Assets in general.
has not been convicted of an offense involving any crime or financial impropriety; and
is not a Politically Exposed Person (“PEP”) in accordance with Applicable Rules and Regulations.
An applicant will only be granted access to the Platform if they meet all of the criteria outlined in Rule 5.1 to Backpack Exchange’s satisfaction. This procedure has been implemented to ensure that only qualified and appropriate applicants are granted access, thereby enhancing the safety and reliability of the Platform for all Users.
Compliance
It is the User’s responsibility to abide by these Rules, the User Agreement and the Applicable Laws and Regulations, in relation to the usage of the Platform.
The User hereby declares that the funds used by the User for trading on the Platform originate from legitimate sources and do not originate from illegal activities. The User further agrees that Backpack Exchange may require a User to provide or otherwise collect the necessary information and materials in accordance with Applicable Laws and Regulations to verify the legality of the sources of their funds.
Backpack Exchange maintains a stance of cooperation with Competent Authorities globally and has the authority to seize, freeze, and terminate Users’ accounts and funds which are flagged out or investigated by a Competent Authority.
A User must comply or procure compliance with any request by Backpack Exchange for explanation or verification of information provided by or on behalf of that User to Backpack Exchange.
Backpack Exchange may immediately report to the Competent Authority any User conduct which may comprise market abuse, financial crime, or a breach of Applicable Laws and Regulations or Backpack Exchange suspects of it, and share the required details relating to the User including User’s positions in the Order Book, in particular, details of any large positions held and changes to the position limits.
Backpack Exchange may, by written notice, require information from a User about any matter which Backpack Exchange considers may relate to these Rules or to the integrity of the Platform, or the market or which Backpack Exchange may require for the purpose of compliance with Applicable Law and Regulations.
A User must not knowingly, recklessly or carelessly provide Backpack Exchange with any information (including information for the purpose of becoming a User) which is false, misleading or inaccurate.
Enforcement
These Rules empower Backpack Exchange to supervise its market and the conduct of the Users on the Platform. To this effect, Backpack Exchange may use a wide range of powers, including but not limited to surveillance, monitoring, review, examination, and investigation. Backpack Exchange may also exercise these powers to ensure that the Users comply with these Rules, the User Agreement and the Applicable Law and Regulations. .
In the exercise of these powers, Backpack Exchange, at its absolute discretion, may request the User to produce any accounts, documents, books, contracts, or any other records.
Backpack Exchange may, through its officers, employees or agents including auditors, investigate into the conduct and affairs of a User including, inter-alia:
any suspected breach of these Rules by a User regardless of how a suspected breach comes to its attention;
any complaint against a User for any acts or omissions; or
any matter which may affect fair and orderly trading.
In furtherance to the investigation under Rule 7.3, the User acknowledges that Backpack Exchange reserves the right to disclose information and documents provided by or relating to a User:
for the purpose of enabling it to institute, carry on or defend any proceedings including any court proceedings;
under compulsion of law in any jurisdiction;
for the purpose of enabling Backpack Exchange to discharge its functions having regard in particular to the maintenance of high standards of integrity and fair dealing; or
for any other purpose with the consent of the User from whom the information was obtained or to whom the information relates.
Backpack Exchange has no obligation to notify a User that an investigation is underway.
Following an investigation pursuant to Rule 7.3., if Backpack Exchange determines, in its absolute discretion, that a breach of these Rules has occurred and was committed by a User, Backpack Exchange may take disciplinary action against such a User in accordance with these Rules.
Backpack Exchange shall record any investigations and disciplinary actions taken against a User on a User’s compliance record.
The User must provide all reasonable assistance requested by Backpack Exchange (whether acting directly or through its agents) in relation to an investigation. The User agrees to provide assistance within the timeframes specified by Backpack Exchange.
User’s ongoing responsibilities
The User agrees to comply with the following ongoing obligations:
refrain from engaging in prohibited activities such as market manipulation, market abuse, misleading acts or practices, fraudulent transactions, or actively participating in financial crime;
refrain from using web crawlers or similar techniques to access the Platform or extract data;
abstain from sending or receiving Virtual Assets to or from wallet addresses that are suspected of involvement in financial crimes;
abstain from taking actions that place an excessive or unfairly large burden on the Platform, or interfere with, intercept, or appropriate any system, data, or information on the Platform;
abstain from attempting to reverse engineer or disassemble any part of the Platform to gain access to source code, underlying ideas, concepts, or algorithms;
abstain from infringing upon Backpack Exchange’s or any third party's copyright, patent, trademark, or intellectual property rights;
maintain a strong password to ensure the security of their Account and protect their password from unauthorized access or use;
implement and maintain suitable security systems for the environment in which the Platform is used, to prevent computer virus attacks and unauthorized access;
cooperate with Backpack Exchange and any Competent Authority during any investigation that is conducted in relation to the User’s conduct on the Platform;
ensure that they make all the notifications required under Rule 9 in a timely manner;
abide by any undertaking made by them and the User Agreement;
adhere to the procedural, operational, and technical requirements of Backpack Exchange as stipulated by Backpack Exchange from time to time, which are necessary for using the Platform;
ensure any information or documents provided to Backpack Exchange, including CDD information and documents, are kept up-to-date and are accurate;
pay such fees and charges as may be applicable to the User under these Rules;
indemnify and hold harmless Backpack Exchange, its directors, officers, employees and agents from and against any liabilities, claims, actions (or threatened actions), proceedings, demands, costs expenses, damages (including attorney fees and fines or penalties imposed by any Competent Authority), suits, investigations, arising from or related to the (i) User’s access or use of the Platform; (ii) breach of these Rules or the User Agreement; (iii) violation of Applicable Law or Regulations or rights of any third party. This indemnity includes any damages resulting from direct acts or omissions, such as a breach of these Rules or violation of any Applicable Laws and Regulations. Backpack Exchange shall have the right to undertake, conduct and control, through counsel of its own choosing and at the sole expense of the User, the conduct and settlement of any third party claim.;
observe high ethical standards to ensure fair and orderly trading, preserve market integrity and act with honesty, integrity, fairness, due skill and care when conducting any activities on the Platform;
refrain from any action or conduct which may impact or harm the reputation of Backpack Exchange;
continue to always meet the criteria under Rule 5 as long as they are Users on the Platform; and
ensure that any personal data provided to Backpack Exchange is up-to-date and correct.
The User is responsible for all acts, omissions, and activities conducted on their Accounts.
The User shall act as principal in respect of all of its interactions with Backpack Exchange and activity on the Platform.
The User must refrain from participating in any Prohibited Conduct as outlined in Rule 12 of these Rules.
The User shall not:
Coordinate prices (including quotations), trades, or trade reports with any other market participant or any other person;
Direct or request another market participant to alter a price (including a quotation); or
Engage, directly or indirectly, in any conduct that threatens, harasses, coerces, intimidates, or otherwise attempts improperly to influence another User, market participant or any other person.
The User is responsible for ensuring that they have:
sufficient authority to transact business on the Account;
sufficient knowledge and understanding of their responsibilities under these Rules and the Applicable Law and Regulations at all times;
sufficient knowledge, understanding and experience with respect to financial markets, Virtual Assets, and trading.
Notification obligations
The User must notify Backpack Exchange as soon as practicable:
if they have or may have committed a breach of these Rules, the User Agreement or any relevant Applicable Laws and Regulations;
if a Competent Authority is investigating the User or instituting any investigation, disciplinary or enforcement proceedings against the User;
the receipt of an injunction, or the imposition of a sanction against the User by any Competent Authority, which may be material in the context of the User’s usage of the Platform or their obligations under these Rules;
if they discover or suspect any unauthorized access or use of their Account or any security breaches related to their Account;
any material change in the User’s ability to comply with these Rules, the User Agreement or the Applicable Laws and Regulations;
any changes or prospective changes affecting their ability to meet the criteria set out herein or any matter which results in the User being unable to comply with the criteria under Rule 5; and
if there is a need to report a material incident in relation to their Account, including any material operational problems or security concerns related to their Account.
The aforementioned notifications must be made using the appropriate means as notified by Backpack Exchange to the User from time to time, including through the user interface. Failure of a User to notify Backpack Exchange in such circumstances will be considered a breach of these Rules by that User.
Listing and trading
The decision to permit a Virtual Asset for trading on the Platform is solely at the discretion of Backpack Exchange. A notice will be issued by Backpack Exchange containing important information about the new Virtual Asset's admission, such as the effective date of admission and the duration of the pre-open session for trading, if any.
Order Book: Backpack Exchange operates an Order Book-based trading platform offering various Virtual Asset-to-Virtual Asset and Virtual Asset-to-fiat currency Trading Pair. Trades are settled in either Virtual Assets or fiat currencies. Each User’s Account will display which Order Books are available to the User.
The Platform and its Order Books are available for trading 24 hours a day, 7 days a week, except for Interruptions and Downtime as provided under these Rules.
Orders
Backpack Exchange may offer various order types to its users from time to time, as described in more details herein.
A User may place an Order on an Order Book provided that the User must have an Available Balance of the relevant Virtual Asset and/or fiat currency in their Account, which is sufficient to cover the total value of the Order including any applicable fees chargeable by Backpack Exchange.
Upon placing an Order, the relevant quantity of the applicable Virtual Asset / fiat currency the User’s Account becomes subject to a Hold.
A User can place an Order in three different ways i.e., (i) a Limit Order; (ii) a Market Order; or (iii) a Stop Order.
A User can cancel an open Limit Order or a Stop Order at any time before it is Executed. No fee is charged for successfully canceled Orders.
Limit Orders
Limit Order: A Limit Order is an Order where the User sets a maximum or minimum price at which the Order can be Executed.
A Limit Order will only be Executed at the specified price or a better price, i.e. a lower price than the specified price for a purchase and a higher price than the specified price for a sale.
A Limit Order, if selected with the ‘post-only’ option, will be posted to the Order Book if there are no existing orders on the other side of the Order Book. A User’s Limit Order with ‘post-only’ selected will always be a Maker Order.
A Limit Order without ‘post-only’ option, will be immediately posted to the Order Book (subject to any Time in Force Instructions) and can result in a Maker Order or a Taker Order, or an Order that is partially a Maker Order and partially a Taker Order.
Limit Orders may be placed with one of the following “Time in Force Instructions”, which may vary by Platform:
Good till canceled: If posted, the Order will remain on the Order Book until canceled by the User. This is the default Time in Force Instruction.
Immediate or Cancel: The Order will be posted to the Order Book only to the extent that it would immediately be Executed and any remaining quantity is canceled. This results in a Taker Order.
Fill or Kill: The Order will only be posted to the Order Book if it would be immediately and completely Executed. This results in a Taker Order.
The default setting for the User will be Good till canceled, which will apply unless the User specifies a different Time in Force Instruction as provided under Rule 10.5.5.
Market Orders
Market Order: A Market Order is an Order to buy or sell a specified quantity of a Virtual Asset at the current best available market price of existing Orders on the Order Book.
A Market Order is not guaranteed to Execute at a particular price. A Market Order may be Executed at a number of different prices, based on the quantity of the Market Order and the quantities of the existing Orders on the Order Book at the time of placing a Market Order.
Depending on the volume and prices of Orders on the Order Book, when a Market Order is posted, the Market Order may be Executed at a price less favorable than the most recent trade price which is considered as a ‘slippage’.
A valid Market Order will be immediately posted to the Order Book.
A Market Order is always a Taker Order.
Stop Orders
A Stop Order is an instruction to post an Order to buy or sell a specified quantity of a Virtual Asset but only if and when the last trade price on the Order Book equals or surpasses the Stop Price.
Once a Stop Order has been placed, it is considered ‘active’ until it executes by posting the relevant Order when the Stop Price is triggered.
A Stop Order is not posted to the Order Book and is not visible to other Users, but any resulting Order is posted and visible. All Stop Orders are placed without 'post-only' enabled.
A Stop Order must be placed as a Stop Limit Order, which posts a Limit Order when the Stop Price is triggered.
A Stop Limit Order is not guaranteed to Fill.
Stop Orders may only be placed with a Good till cancelled under Time in Force Instruction.
Posting of Orders to the Order Book
“Taker Order”: If an Order is posted to the Order Book at the same price on the other side as one or more existing Orders, it is a Taker Order which will result in an immediate Fill at that price, to the extent of the total quantity of those existing Orders.
“Maker Order”: To the extent that an Order is posted to the Order Book at a different price to all existing Orders, it is a Maker Order which will remain open at that price on the Order Book until:
it is canceled by the User;
it expires due to a Time in Force Instruction; or
it is completely Filled by one or more Taker Orders placed by another User at the same price.
A User may modify an Order entered in the Order Book at any time before the Order is Filled.
Modified Orders shall lose their original time priority and be given a new time stamp.
Order Protections
You can elect to subject all of your Market Orders and Limit Orders to a price protection point (PPP) as set forth at Backpack Exchange. If enabled, Market and Limit Orders will Fill or be Executed at prices up to the PPP from the mid-point price between the best bid and best offer on the Order Book at the time the Order was placed by the User. If a Market or Limit Order would Fill against Orders beyond the PPP, the Order will partially Fill up to the PPP level and the matching engine will cancel all remaining portions of the Order.
Order Minimums/Maximums
All Orders placed on the Backpack Exchange Platform are subject to a minimum order size depending on the Order Book, which you can view at backpack.exchange. In addition, all Orders are subject to a dynamic maximum order size that varies based on the order book depth.
Updating Order Parameters: Backpack Exchange will periodically update these Order parameters. Users can refer to the latest parameters on the Backpack Exchange’s website at backpack.exchange.
Position Limits
A User’s maximum position limit in any Order Book shall be the greater of (a) US$1,000,000 or (b) 1% of the average daily transaction volume for the market in the immediately preceding 30 days.
Matching Engine and Order Priority
Backpack Exchange matches Taker Orders with Open Maker Orders on each Order Book based on Price-Time Priority as defined under Rule 10.12.2.
“Price-Time Priority” means that each time a Taker Order is posted: The Taker Order is matched with the earliest in-time Maker Order at the best price on the Order Book; and to the extent that the Taker Order is not completely Filled by that Maker Order, it is matched with any subsequent Maker Orders at that price, in the sequence those Maker Orders were posted; and to the extent that the Taker Order is not completely Filled by one or more Maker Orders described above, it is matched with one or more Maker Orders at the next best price, in the sequence those Maker Orders were posted, and this process is repeated until the Taker Order is completely Filled.
All Users on Backpack Exchange are subject to the same Price-Time Priority.
Subject to Time in Force Instructions, an Order may be matched with a number of corresponding Orders at the same price.
Users understand and acknowledge that the Taker Orders are matched with the best available existing Maker Orders. This means that a Limit Order placed outside the market (i.e. a Sell Order below the highest existing Buy Order, or a Buy Order above the lowest existing Sell Order) will be Filled by the best available existing Order rather than an existing Order with the same price as the Limit Order.
Fills and Settlement
When a Maker Order is matched with a Taker Order, those Orders are Filled. An Order may be matched with and Filled by one or more Orders at the same price.
All partially or fully Filled Orders are settled in real-time, by debiting and crediting the relevant balances of Virtual Assets and/or amount of fiat currency in both Users’ Accounts. Backpack Exchange acknowledges that it is responsible for completing the final settlement of a Virtual Asset transaction within 24 hours of its execution on the trading venues, subject to circumstances beyond the control of Backpack Exchange. This includes any limitations or malfunctioning of any DLT that is not controlled by the Backpack Exchange or its group.
Subject to daily withdrawal limits and the User Agreement, a User may immediately withdraw all Virtual Assets and/or amount of fiat currency in their Account.
Trading Fees
Backpack Exchange understands and acknowledges that Backpack Exchange’s fee structures are transparent, fair, and non-discriminatory. Backpack Exchange further acknowledges that Backpack Exchange will not impose any fee that disrupts the fair and orderly functioning of any market involving Virtual Assets. Fees may vary between Order Books. The current fee rates can be found at https://support.backpack.exchange/en/articles/394945.
Backpack Exchange charges a Maker fee for each Maker Order and a Taker fee for each Taker Order that is posted to the Order Book. The fee is charged in the Quote Asset and is calculated as a percentage of the Order quantity.
A fee is charged by debiting the User’s Order for the amount of the fee at the time the Order is Filled.
If an Order is posted to the Order Book partially as a Maker Order and partially as a Taker Order, a Maker fee applies to the portion posted as a Maker Order and a Taker fee applies to the portion posted as a Taker Order.
Users understand and acknowledge that certain Users may be eligible for volume-based fee discounts based on their historical trading volume across all Order Books. Such Users will be notified of any applicable discounts while trading on the Platform.
Notification
Users will receive a confirmation notification every time they have placed an Order, canceled an Order, and when that Order is partially or completely Filled.
Order Records
Backpack Exchange shall maintain a full audit trail of the following details for every Order:
User identification number;
Date and time of the Order;
Trading Pair;
Order type and whether it is to buy or sell a Virtual Asset;
Order Status whether the Order is open, partially filled, filled or cancelled;
Price at which the Order is placed, Filled and/or canceled;
Price and Fee where the Order is Filled; and
Quantity: order size measured in Virtual Asset units (Trading Pair).
Market Integrity
All Executed Orders are final and will not be reversed unless:
Backpack Exchange is compelled to do so by any Applicable Laws and Regulations;
The Order has been Filled or Executed due to a serious technical error. In such circumstances, Backpack Exchange will make all reasonable efforts to restore all Users to the position they would have been in if the error had not occurred.
Backpack Exchange may cancel Open Orders for any reason, in its sole discretion, including, but not limited to, in the following circumstances:
Orders placed by Users who, in Backpack Exchange’s sole discretion, have engaged in abusive use of the Platform, for example, market manipulation, wash trading, using the API in a manner which unreasonably burdens the Platform, or other illegal or similar activities.
Orders which under the circumstances involve an error with respect to price, quantity, or other parameters - a ‘clearly erroneous transaction’.
If required by any Applicable Law and Regulations, including specifically where Backpack Exchange is required to suspend or terminate a User’s Account in accordance with these Rules.
If required for routine or unscheduled maintenance, or other technical reasons.
Access
All Users have equal access to the Backpack Exchange Order Books. Backpack Exchange does not provide prioritized access to any User.
Backpack Exchange has the authority to take any action deemed appropriate to preserve market integrity. Such actions include, but are not limited to, the halting of trading, modifying risk-mitigating parameters, restricting User access to the Platform or any Order Book, restricting order types to post-only or limit only, canceling orders resting in the Order Book, or any other actions deemed to be in the best interest of the Platform.
Backpack Exchange may periodically shut down access to the Platform, and interrupt any automatic functions for the following reasons:
emergency maintenance (including unscheduled maintenance);
planned or unplanned system and software updates; and
due to any other event or occurrence that Backpack Exchange considers, in its sole discretion, to be a reason to suspend or shut down the operations on the Platform.
In addition to the actions that Backpack Exchange may undertake as provided under Rule 10.19, Users acknowledge and agree that Backpack Exchange reserves the right (without any liability resulting of Backpack Exchange or any Backpack Exchange affiliates involved in the provision of the Backpack Exchange services) to disable, update, cancel, restrict or otherwise modify any content, components or features of the Platform.
Interruptions
If technical reasons prevent or degrade Users’ ability to place or cancel Orders, or prevent or degrade access to Backpack Exchange APIs or the Platform or affect the operation of Order Books or matching engines, then Backpack Exchange may, in its own discretion, take one or more of the following actions in respect of one or more Order Books;
Temporarily disable depositing or withdrawing Assets.
Cancel Open Orders.
Disable the ability to place new Orders (Cancel-only Mode).
Disable Order Books altogether.
Disable sign-in.
Disable the Backpack Exchange APIs.
Disable access to the Site.
If access to the Platform is unavailable for 5 minutes or longer, Backpack Exchange may move the Platform to Cancel-Only Mode.
In the event that the Platform is in Cancel-only Mode, it will be restored to full operation once access through the Platform is available for at least 5 minutes and Backpack Exchange deems it is safe to restore the Platform to fully operational.
Backpack Exchange will notify Users of the move to or from Cancel-only Mode via @xNFT_Backpack on Twitter or at https://status.backpack.exchange.
Self-Trade Prevention
Users are not able to place an Order which would result in self-execution—i.e., where the same User would act as both the maker and taker for the trade.
If two Orders of the same quantity would result in self-execution, Users will have the option of either (a) canceling the Maker Order, (b) canceling the Taker Order, or (c) canceling both the Maker and Taker Orders.
Flash Crashes and Circuit Breakers
Backpack Exchange does not utilize circuit breakers or automated trading halts based on predetermined price thresholds. As provided in Rules 10.19 and 10.20, Backpack Exchange may, in its discretion, halt trading.
Prohibition of Market Manipulation
Users are prohibited from engaging in market manipulation.
Market manipulation of any kind is strictly prohibited. Market manipulation is defined as actions taken by any market participant or a person acting in concert with a participant which are intended to:
Deceive, mislead, or improperly take advantage of other Users or Backpack Exchange;
Artificially control or manipulate the price or trading volume of an Asset; or
Aid, abet, enable, finance, support, or endorse either of the above.
Market Manipulation specifically includes, without limitation: front-running, wash trading, spoofing, layering, churning, and quote stuffing.
Delisting of virtual assets and suspension of trading
Backpack Exchange reserves the right to delist a listed Virtual Asset or suspend trading in relation to a Virtual Asset if:
such delisting or suspension is required by a Competent Authority or has been approved by the VARA;
such delisting or suspension is required for Backpack Exchange to comply with Applicable Laws and Regulations;
such delisting or suspension is required to protect the fair and orderly operation of the Platform;
the relevant Virtual Asset exceeds or is likely to exceed any specific parameters published on the Platform, including where, in Backpack Exchange’s discretion, a Virtual Asset, is exhibiting unusual or excessive price volatility;
such delisting or suspension is required as a result of a hard fork affecting the relevant Virtual Asset; and
such delisting or suspension is required in connection with a Downtime.
Prohibited Conduct
Users are strictly prohibited from participating in, aiding, abetting, allowing, financing, supporting, or otherwise endorsing any behaviour involving market abuse, fraud or any conduct contrary to Backpack Exchange’s AML procedures including:
engaging in any conduct that is calculated to, or that creates a significant risk of, misleading the market including sharing, publishing, broadcasting or otherwise disseminating false or misleading information on Virtual Assets;
engaging in any conduct amounting to market manipulation, including the placing of any Order:
create or execute fictitious transactions or place any Order for a fictitious transaction with knowledge of its nature;
place any Order on the Platform which has been pre-arranged (or discussed with another market participant prior to being placed on the Platform) for the purpose of creating an artificial price, fictitious trade, or other disruptive, fraudulent, non-competitive, or unfair impact on the Platform;
to give or potentially give a false or misleading interpretation of the supply and/or demand for a Virtual Asset; and/or
creating an abnormal or artificial price.
engaging in any conduct that is calculated to create, or creates, a significant risk of, overloading or otherwise impairing the operation of the Platform.
Each User acknowledges and agrees that if any such techniques or activities are detected (or are reasonably suspected) by Backpack Exchange then any User found or reasonably suspected by Backpack Exchange to have participated, aided, abetted, allowed, financed, supported or otherwise endorsed any behaviour will be subject to disciplinary action in accordance with these Rules.
The User shall not engage in any trading, practice, or conduct on the Platform that:
demonstrate an intentional or reckless disregard for the orderly Execution of transactions; or
is, of the character of, or is commonly known as “spoofing” (bidding or offering with the intent to cancel the bid or offer before execution).
Default rules and disciplinary actions
Backpack Exchange defines a Default Event as any one of the following:
material failure by a User to meet any of its obligations under the User Agreement, these Rules, undertakings given by the User or any other agreement between the User and Backpack Exchange;
material breach of these Rules or the User Agreement by a User;
material misrepresentations made by a User;
User is declared bankrupt or seeks a voluntary arrangement in respect of its debts;
User engages in or attempts to engage in any form of Market Abuse; or
an event of an enforcement proceeding, sanction, formal notification or injunction against the User by a Competent Authority.
Backpack Exchange may, at its absolute discretion, declare the relevant User as a ‘Defaulter’ on the occurrence of a Default Event. Declaration of a User as a Defaulter shall be made by email to the Defaulter.
Upon declaring a User as a Defaulter, Backpack Exchange may initiate, taking into account the severity of the Default Event, inter-alia, any of the following disciplinary actions:
Issuing a written warning to the Defaulter;
requiring the Defaulter, via a notice, to provide any information or document within a specified time to assist Backpack Exchange in its investigation of the Default Event;
requiring the Defaulter, via a written notice, to remedy the Default Event, where possible or desirable by Backpack Exchange in its sole discretion, within the time it specifies;
canceling some or all Orders or transactions of the Defaulter;
selling some or all of Defaulter’s Virtual Assets to the credit of the Defaulter's Account;
suspending or terminating the Defaulter’s access to the Platform; and
blocking the Defaulter’s access to their Accounts.
Backpack Exchange reserves the right to report any Default Event and any disciplinary action taken by Backpack Exchange in respect of any such Default Event to the relevant Competent Authorities. Backpack Exchange will not, and has no obligation to, notify a User before reporting any Default Event to any of the Competent Authorities.
Penalties
In the event of a violation of any of these Rules, the User shall be subject to penalties as determined by Backpack Exchange.
The penalties for the violation of these Rules may include but are not limited to, fines, suspension or termination of the User's account, or any other action deemed appropriate by Backpack Exchange.
The User acknowledges and agrees that Backpack Exchange may, at its sole discretion, modify the penalties for the violation of these Rules from time to time.
The User shall be notified of any changes to the penalties for Rules violations, as and when they occur.
Access to Information
All Users have full and equal real-time access to Backpack Exchange’s market data (“Market Data”). Market Data is made available through the Platform.
Market Data comprises the following:
All Limit Orders placed on the Order Book (price, quantity, and time).
All Fills or Executions (price, quantity, and time).
Market Data does not include the following:
All canceled Orders on the Order Book (price, quantity, and time).
Resting Stop Orders (Stop Orders that have been placed but not triggered).
Any information about which User placed or canceled an order.
Backpack Exchange Corporate Operations
Backpack Exchange itself does not engage in any trading activities on the Platform. Backpack Exchange operates as an intermediary, allowing Users to interact with each other to Execute trades on the Platform. This ensures that the trading activities on the Platform are conducted independently by the Users without any influence or bias from Backpack Exchange.
Backpack Exchange Employee Access
Backpack Exchange policies prohibit all Backpack Exchange employees from using inside, corporate, or proprietary information to trade Virtual Assets on the Platform.
Downtime
From time to time, Backpack Exchange may suspend trading temporarily for maintenance or upgrades. Backpack Exchange will endeavor to follow the following process for closing and re-opening trading, when appropriate:
Step 1: Announce Downtime
Announce scheduled Downtime via status.backpack.exchange, or Twitter
For scheduled Downtime, Backpack Exchange will endeavor to announce at least ten (10) days prior to the start of the scheduled Downtime.
For unscheduled Downtime, Backpack Exchange will endeavor to provide as much prior notice as possible
Step 2: Downtime Begins
Step 3: Immediately after Downtime is Completed
All books enter the 'Post-only' Mode
Announce the above via status.backpack.exchange
To ensure a fair and orderly marketplace, Backpack Exchange may in its discretion cancel all resting Limit Orders in an Order Book before moving the market to Post-only Mode or to Limit-only Mode
Step 4: At least 1 minute after Step 3; or longer duration if necessary
All books enter Limit-Only Mode
Announce the above via status.backpack.exchange or Twitter
Step 5: At least 10 minutes after Step 4; or longer if necessary
All books enter into full-trading Mode
Announce the above via backpack.exchange
Amendment
Backpack Exchange may from time to time amend these Rules by publishing an updated Rules on backpack.exchange at least fifteen (15) days prior to the effective date of such amended Rules.
Custody and safekeeping arrangements
Title and control
The ownership of fiat currency and Virtual Assets held by Users shall remain with them at all times. Users bear the risk of any loss incurred as the owner of such assets. It should be noted that none of the fiat currency and Virtual Assets held in a User's Account are the property of Backpack Exchange.
Users shall have full control over the fiat currency and Virtual Assets held in their Account. They may withdraw their assets at any time, subject to Downtimes and other restrictions under these Rules and other applicable policies.
User Virtual Assets
A User's Virtual Assets, to the credit of such User's Account, shall be held by Backpack Exchange, on behalf of the User, in a User Virtual Asset wallet segregated from Backpack Exchange’s proprietary assets at all times.
Any Virtual Asset received by Backpack Exchange from Users will be received and securely stored by Backpack Exchange or the Custodian. Backpack Exchange will be the sole custodian of the private keys.
Backpack Exchange does not provide any interest on the Virtual Assets held on behalf of Users.
Users’ Virtual Assets shall be pooled into an omnibus wallet. While the Virtual Assets belonging to different Users are not physically segregated, they shall remain segregated from Backpack Exchange’s proprietary Virtual Assets.
Backpack Exchange will perform a daily reconciliation of the Virtual Assets held by Backpack Exchange on the User’s behalf. Users shall have the option to access their Virtual Asset balances by logging into their Account for their Virtual Assets.
Fiat currency
Backpack Exchange does not currently provide fiat currency services to its customers.
Complaints
Any person may lodge a complaint with Backpack Exchange in accordance with Backpack Exchange’s Complaints Handling Policy, in relation to any aspect of Backpack Exchange’s operation of the Platform. Backpack Exchange will address such complaints in accordance with the Complaints Handling Policy, which is published on the Platform.
Definitions
In these Trading Rules, the following words and phrases have the corresponding meanings.
Account means an account held with Backpack Exchange in the name of the User on the Platform.
Applicable Laws and Regulations means provisions of laws, statutes, ordinances, rules, regulations, permits, certificates, judgments, decisions, decrees or orders of any Competent Authority applicable to Backpack Exchange or the Users.
Available Balance means a User’s Total Asset Value less any amounts held for Open Orders and fees.
Base Asset means the Asset being traded on the Order Book; the first Asset in the Trading Pair. For example, on the BTC-USD Order Book, BTC is the Base Asset and USD is the Quote Asset.
Cancel-only Mode means that Users cannot place new Orders. Users are able to cancel open Orders. No Orders will be Filled.
Competent Authority means VARA and any other regulatory, judicial or law enforcement authority that has jurisdiction over the activities of Backpack Exchange, the Platform, or the Users.
Default Event shall have the same meaning as defined in Rule 13 of these Rules.
Fill or Execution means matching of two Orders.
Full-Trading Mode means normal operation of the Backpack Exchange Platform. Users can place Market Orders and Limit Orders and can cancel Orders.
Hold means the setting aside of Assets allocated to an Order.
Limit Order means an Order to buy or sell a specified quantity of an Asset at a specified price.
Limit-only Mode means that Users can place and cancel only Limit Orders. Only Limit Orders can be Filled during this mode. Market Orders will be rejected.
Market Order means an Order to buy or sell a specified quantity of an Asset at the best available price of existing Orders on the Order Book.
Order means an instruction to buy or sell a specified quantity of the Base Asset at a specified price in the Quote Asset.
Order Book(s) means each Order Book on which Orders are placed for trading in a Trading Pair.
Open Order means a Maker Order which has been posted but not Filled, canceled or expired, or a Stop Order which is currently active.
Post-only Mode means that Users can only place an Order if it would be posted to the Order Book as a Maker Order. An Order which would be posted as a Taker Order will be rejected. No Market Orders may be placed and no Orders will be Filled. Resting orders may be canceled in post-only mode.
Quote Asset means the Asset which is used as the denomination in trading on the Order Book and is also the second Asset in the Trading Pair. For example, on the BTC-USD Order Book, BTC is the Base Asset and USD is the Quote Asset.
Scheduled Downtime means a planned temporary outage for maintenance or upgrades. See section 4.
Stop Order means an instruction to post an Order to buy or sell a specified quantity of an Asset but only if and when the last trade price on the Order Book equals or surpasses the Stop Price.
Stop Price means the price specified in a Stop Order.
Total Asset Value means the gross value of all of a User’s Assets for the relevant Order Book, expressed in the Quote Asset based on the last trade price. This includes all Assets allocated to Open Orders.
Trading Pair means each pair of a Base Asset and a Quote Asset offered on the Backpack Exchange Platform.
User refers to any person (including individuals or legal persons) that access, download or use the Platform or any services of Backpack Exchange, and who meet the eligibility criteria specified by Backpack Exchange.
Virtual Asset means a digital representation of value that may be digitally traded, transferred, or used as an exchange or payment tool, or for investment purposes. This includes Virtual Tokens, and any digital representation of any other value as determined by VARA.
Virtual Token means a digital representation of a set of rights that can be digitally offered and traded through a Virtual Asset platform.