SecProbe.io

United States securities and exchange commission logo
January 3, 2023
Gary Simanson
Chief Executive Officer
Coincheck Group B.V.
Hoogoorddreef 15, 1101 BA
Amsterdam, Netherlands
Re:Coincheck Group B.V.
Amendment No. 2 to
Draft Registration Statement on Form F-4
Submitted November 1, 2022
CIK No. 0001913847
Dear Gary Simanson:
            We have reviewed your amended draft registration statement and have the following
comments.  In some of our comments, we may ask you to provide us with information so we
may better understand your disclosure.
            Please respond to this letter by providing the requested information and either submitting
an amended draft registration statement or publicly filing your registration statement on
EDGAR.  If you do not believe our comments apply to your facts and circumstances or do not
believe an amendment is appropriate, please tell us why in your response.
            After reviewing any amendment to your registration statement and the information you
provide in response to these comments and your amended draft registration statement or filed
registration statement, we may have additional comments.  Unless we note otherwise, our
references to prior comments are to comments in our October 3, 2022 letter.
Amendment No. 2 to Draft Registration Statement Submitted November 1, 2022
General
1.Please note that we continue to consider your accounting policies and disclosure detailed
in your prior responses and may have further comments.
2.We note your response to comment 1 regarding the miime platform and the potential that
users of the platform may be located outside of Japan. We further note your statement that
the Company has decided to discontinue operation of the miime platform.
Notwithstanding this decision and the fact that the miime platform has ceased or will

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cease operations, please expand your risk disclosure regarding the possibility of non-
Japanese customers having transacted in crypto assets using the miime platform during the
period of its operation by the Company, including the risk that, should one of the NFTs or
other crypto assets traded on the platform be determined to be a security, Coincheck could
be found to have facilitated transactions in unregistered securities.
3.Please revise throughout by discussing how recent market events, including the
bankruptcies of certain crypto asset market participants, and the downstream effects of
those events have impacted or may impact your business, financial condition, customers,
and counterparties, either directly or indirectly.  In your revised disclosure:
•discuss under your captions "Risk Factors" and "Information About Coincheck - Our
Market Opportunity" any negative impacts that the liquidity issues and subsequent
collapse and bankruptcy proceedings of these market participants have had and
may continue to have on crypto assets markets and market participants;
•clarify whether Coincheck has direct or indirect counterparty exposure to these
market participants and what impact any such exposure may have on Coincheck's
business operations. For example, clarify whether Coincheck has relationships with
counterparties, customers, custodians, or other third parties with which you transact
whose business operations may be negatively impacted by the liquidity issues and
subsequent bankruptcy proceedings of these market participants or any other
impacted entities such that your operations could be impacted;
•clarify whether you have material assets that may not be recovered due to the
bankruptcies or may otherwise be lost or misappropriated; and
•expand your risk factors under the caption "Risks Related to Third Parties" beginning
on page 68 to provide more tailored credit risk disclosure that addresses the specific
impacts of recent crypto market events.
4.Disclose whether you have experienced excessive redemptions or withdrawals, or have
suspended redemptions or withdrawals, of crypto assets and explain the potential effects
on your financial condition and liquidity.
5.Please revise to describe any material policies and procedures that would limit or prohibit
Coincheck from engaging in activities such as front running, wash trading or
market manipulation through its trading activities on the platform.

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Frequently Used Terms
Exchange Platform, page 4
6.Please revise your definition of “exchange platform” to clarify that Coincheck may also
transact on the platform.  Additionally, revise disclosure on page 188 under the Exchange
Platform heading to more clearly describe that Coincheck may also transact on the
exchange platform.
Summary of the Proxy Statement/Prospectus, page 9
7.We note your response to comment 5 and your disclosure on page 10 that "marketplaces
for NFTs, which Coincheck also operates, are also subject to an uncertain and evolving
regulatory environment". Please describe here and more fulsomely in your section
captioned "Information About Coincheck - Regulatory Environment" the principal
regulations that impact your NFT Marketplace business, and how such regulations impact
your operations.
Risk Factors, page 46
8.We note that each of the transaction documents filed in Annexes A, C, D, E, F and G
contains a jury trial waiver provision. Please include disclosure regarding those provisions
in your summary risk factors.
9.Describe any material risk to you, either direct or indirect, due to excessive redemptions,
withdrawals, or a suspension of redemptions or withdrawals, of crypto assets.  Identify
any material concentrations of risk and quantify any material exposures, including
updated disclosure regarding your exposure to Binance.
10.To the extent material, discuss any reputational harm you may face in light of the recent
disruption in the crypto asset markets.  For example, discuss how market conditions have
affected how your business is perceived by customers, counterparties, and regulators, and
whether there is a material impact on your operations or financial condition.
11.Describe any material financing, liquidity, or other risks you face related to the impact
that the current crypto asset market disruption has had, directly or indirectly, on the value
of the crypto assets you use as collateral or the value of your crypto assets used by
others as collateral.
12.To the extent material, describe any of the following risks due to recent disruptions in the
crypto asset markets:
•Risks from depreciation in your stock price.
•Risks of loss of customer demand for your products and services.
•Financing risk, including equity and debt financing.
•Risks of increased losses or impairments in your investments or other assets.
•Risks of legal proceedings and government investigations, pending or known to be
threatened, in the United States or in other jurisdictions against you or your affiliates.

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•Risks from price declines or price volatility of crypto assets.
•Risks of increased regulation of your industry.
•Specific recent examples of negative publicity associated with crypto trading
platforms.
Risks Relating to Coincheck's Business and Industry
A particular crypto asset’s status as a “security” in any relevant jurisdiction remains subject to a
high degree of uncertainty., page 55
13.We note the statement that the legal test for determining whether any given crypto asset is
a security is "a highly complex, fact-driven analysis that evolves over time, and the
outcome is difficult to predict." Please revise this statement with respect to the U.S. as the
legal tests in the U.S. are well-established by U.S. Supreme Court case law, and the
Commission and staff have issued reports, orders, and statements that provide guidance on
when a crypto asset may be a security for purposes of the U.S. federal securities laws.
14.Please expand your discussion of the material risks related to unauthorized or
impermissible customer access to the Company's products and services outside of Japan.
Describe the potential impact to your business of administration sanctions, including fines,
or legal claims based upon the laws of such other jurisdictions.
We also operate Coincheck NFT Marketplace...risks that could adversely affect our business,
operating results, and financial condition., page 55
15.We note your added risk factor in response to comment 1 and reissue the comment in part.
Please expand your risk factor disclosure to discuss your procedures for evaluating NFTs
for admission to trading on your platform.
16.We note your revisions in response to comment 2. Please also revise this section to
consistently use the term “crypto asset,” as opposed to digital asset.
Risks Relating to Government Regulation and Privacy Matters, page 67
17.Describe any material risks to your business from the possibility of regulatory
developments related to crypto assets and crypto asset markets. Identify material pending
crypto legislation or regulation and describe any material effects it may have on your
business, financial condition, and results of operations.
18.Describe any material risks you face related to the assertion of jurisdiction by U.S. and
foreign regulators and other government entities over crypto assets and crypto asset
markets.
Risks Relating to Third Parties, page 68
19.We note your response to comment 9. In addition to disclosing your exposure to Binance,
please revise to disclose your aggregate counterparty exposure.

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20.If material to an understanding of your business, describe any direct or indirect exposures
to other counterparties, customers, custodians, or other participants in crypto asset markets
known to:
•Have filed for bankruptcy, been decreed insolvent or bankrupt, made any assignment
for the benefit of creditors, or have had a receiver appointed for them.
•Have experienced excessive redemptions or suspended redemptions or withdrawals
of crypto assets.
•Have the crypto assets of their customers unaccounted for.
•Have experienced material corporate compliance failures.
Unaudited Pro Forma Condensed Combined Financial Information
Basis of Pro Forma Presentation
Unaudited Pro Forma Condensed Combined Statement of Operations, page 123
21.Please tell us the reason(s) for the significant changes in the amounts, as compared to the
prior amendment, in the Thunder Bridge (US GAAP Historical As Converted) column.
Cryptocurrency Trading Services
Marketplace Platform, page 188
22.We note your disclosure that individual transactions are offset before cover transactions
are executed and that you also have a threshold limit for the remaining open position at
any time, and cover transactions are only executed when the threshold is exceeded.  Please
revise to enhance your disclosure that “Immediately upon receipt of an order… our
trading operations system executes a cover transaction” to more accurately describe the
timing of cover transactions and the hierarchy of how the different alternatives to cover a
transaction (e.g.  offsetting trades, transaction on Exchange Platform, transaction on an
external exchange, etc.) are considered and processed.   Additionally, please revise to
clarify disclosure related to the timing and process of cover transactions in the fourth
paragraph on page 222 and similar disclosure on page F-55.
23.Please revise to clarify if bid/ask spreads are applied to and revenue recognized on
individual trades that are offset before cover transactions are executed.
Exchange Platform, page 188
24.We note your response to comment 13 and reissue our comment in part.  We note your
added disclosures on page 190 describing the steps you take internally and the criteria you
use to approve and evaluate new cryptocurrencies for trading, and the statement on page
190 that you “conduct this internal approval process based on risk-based judgments.”
Please further revise to clarify that such processes and risk-based judgments made by the
company are not legal standards or determinations binding on any regulatory body or
court.

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January 3, 2023
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Account Management and Custody of Customer Crypto Assets, page 190
25.We note your added disclosure on page 191 in response to comment 16.  Please clarify the
amount of assets custodied, including those borrowed from customers. For instance, in
your response to comment 16, you state that you hold ¥457 billion of crypto assets in cold
wallets and ¥3.7 billion of crypto assets in hot wallets as of March 31, 2022, and on page
191 you indicate that ¥2.4 billion of assets are held at counterparties, totalling ¥463.1
billion of assets held in either wallets or counterparties. On page 42, under "Key Business
and Non-IFRS Financial Measures" you state that you had, as of March 31, 2022 customer
assets of ¥481.0 billion, which, less ¥55.9 billion of fiat currency, totals ¥425.2 billion.
Under your consolidated statements of financial position data, however, we note that you
record a safeguard liability of ¥425.7 billion. In either case, the customer assets/safeguard
liability plus the ¥37.6 billion of crypto asset borrowings totals either ¥462.8 billion or
¥463.3 billion, as opposed to ¥463.1 billion.
26.Identify what material changes, if any, have been made to your processes, policies and
procedures regarding the commingling of assets, including customer assets, borrowed
assets, your assets, and those of affiliates or others, in light of the current crypto asset
market disruption. Describe any material risks to your business and financial condition if
your policies and procedures surrounding the safeguarding of crypto assets, conflicts of
interest, or commingling of assets are not effective.
Insurance Coverage, page 191
27.We note your added disclosures in response to comment 8 and reissue our comment in
part.  Please further revise to disclose any obligations you have toward your securities or
crypto asset account holders in the event of fraud.
Additional Cryptocurrency-related Services
Coincheck Lending, page 192
28.Please revise to address the following regarding the Coincheck Lending service:

•Discuss any regulatory, contractual or other restrictions on the use of borrowed
customer cryptocurrencies.
•Discuss and quantify any concentrations with customer lenders.
29.We note disclosure that you use borrowed customer cryptocurrencies in order to facilitate
remittance requests and also to deposit with external exchanges in order to facilitate cover
transactions you make in operating your Marketplace Platform.  We also note disclosure
on page 217 that you use borrowed customer cryptocurrencies to facilitate customer
transactions at a lower cost than procuring from alternate sources and that these
cryptocurrencies are held with the purpose of acquiring broker-traders’ margin.  Please
address the following:

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•Tell us in detail and revise to disclose the reasons for using borrowed
cryptocurrencies to fulfill customer remittance requests.
•Tell us in detail and revise to disclose how you use borrowed cryptocurrencies to
facilitate customer transactions and to cover customer transactions on the
Marke