Service Terms

Updated August 3rd, 2020

1. Introduction

This page sets out the service terms for Coinbay LLC account-holders. By signing up for a Coinbay LLC account, you accept all of these terms. A reference in these Service Terms to ‘we’, ‘us’ or ‘our’ means LocalEthereum Pty Ltd and its directors and officers.

Separate terms of use apply to website visitors. These Service Terms apply if you create a Coinbay LLC account. The website Terms of Use also apply to the use of the services. In the event of conflict between these Service Terms and the website Terms of Use, the Service Terms prevail.

Coinbay LLC is a service that enables its users to find others interested in trading cryptocurrencies for local currencies and vice versa. We do not facilitate the exchange of fiat currency for a digital currency, and we do not provide a digital currency exchange service. Coinbay LLC does not purchase cryptocurrencies from, or sell cryptocurrencies to, its account holders.

Nothing on our website is intended to constitute legal or financial advice. The information on our website, and the posting and viewing of any the information on our website, should not be construed as, and should not be relied upon for, legal, financial or taxation advice in any circumstance.

2. Your account

You will need to register and create an account in order to access the Coinbay LLC platform as a user. When you register as a member and create your profile, you will need to provide us with your email address, and pick a username and password. You must log in using your username and password to access the services.

You must maintain the confidentiality of your password and you are responsible for all activities that are conducted through your account, whether or not you have authorised such use.

You must remember your password. If you lose your password, you will not be able to access your encrypted communications or wallet, and there is no way for Coinbay LLC to recover access.

We currently do not allow usernames to be changed.

If you are prompted to declare your residency when signing up for an account, you warrant that you have declared your residency honestly.

If you wish to delete your account, please open a support ticket with your request.

You must be at least 18 years old to sign up for a Coinbay LLC account. If you sign up for an account, you warrant that you are at least 18 years old.

3. Generating Coinbay LLC keys

When you create an account, a private key is created unique to you. You hold this key – we do not have a copy.

When you create an account, a primary private key is created unique to you (called the root private key). This root private key is used to encrypt other private keys unique to you (called the party private keys). Each party private key has a mathematically-corresponding party public key which is not encrypted and is stored and shared by Coinbay LLC to allow other users to establish shared secrets, using a cryptographic key agreement protocol (known as a "Diffie–Hellman key exchange"). These shared secrets are used to encrypt communications between other Coinbay LLC users.

As such, we cannot read your communications with another user, unless you or the other user gives us the shared secret required to decrypt these communications.

You may also have private keys for the cryptocurrencies you hold in a cryptocurrency wallet. We also cannot access these private keys, so we cannot access your cryptocurrencies, token balances or any other item or information that is able to be stored in the wallet.

4. Posting offers

Coinbay LLC users may post offers to buy or sell cryptocurrencies in exchange for local currencies using the marketplace. Offers on the marketplace are made publicly available, and can be viewed by anyone who accesses the website.

When an offer is displayed, we may also display symbols next to the offeror’s username such as a symbol to indicate the offeror’s trade activity, response rate or standard hours.

Offerors can write their own terms and conditions of sale, which may be published with the offer or negotiated with the other party to the transaction. However all terms and conditions of sale must include the mandatory terms specified in these Service Terms regarding Coinbay LLC’ fee and the process for resolving disputes.

Offers displayed on the Coinbay LLC website have Coinbay LLC’ fee (see section 7) priced into them by default, which is why buyers and sellers will see a different rate for the same trade. The prices you see are what you should expect to receive after Coinbay LLC's fee has been charged, however they are not inclusive of cryptocurrency network transaction fees.

Coinbay LLC reserves the right to delete offers from the marketplace at its discretion. Generally, it will delete offers if they appear to be unlawful, non-genuine, fraudulent, spam or are otherwise incorrect.

5. Communications between parties

Coinbay LLC users can communicate over the Coinbay LLC platform.

All communication made between buyers and sellers on Coinbay LLC is end-to-end encrypted. No third parties, including us, have the technical ability to decipher and/or read these messages unless we are given the shared secret to do so by one party.

It is the responsibility of a user to make and keep adequate records of communications, details of transactions and financial history to the extent that they are required to do so in their jurisdiction.

Once the shared secret used to encrypt the messages is destroyed, that conversation is gone forever and cannot be recovered.

You must not be engage in communication with other Coinbay LLC users which is offensive, abusive, unlawful, defamatory, indecent or inappropriate.

You acknowledge that we are unable to provide you with any other information about the identity of another Coinbay LLC user other than what is made available to you on our website.

6. Trades of cryptocurrency

The parties of a trade are referred to as "buyers" (those who are interested in trading local currency for cryptocurrency) and "sellers" (those who are interested in trading cryptocurrency for local currency).

When trading with a user located with the aid of Coinbay LLC's services, payment instructions can only be communicated directly between the buyer and seller. We do not have any bank accounts that hold users' funds, nor do we facilitate or escrow any local currency payments between buyers and sellers. At no point during the course of a trade does the buyers' or sellers' cryptocurrency enter our control, unless we direct cryptocurrency to resolve a dispute.

Ether (ETH) trades are conducted via the Ethereum distributed computing network, which we cannot and do not control. When a seller sends ether to a buyer during the course of a trade, the seller transfers ether directly to an escrow smart contract on the Ethereum blockchain. Coinbay LLC cannot access ether held in escrow without explicit digital permission from the buyer or seller. It is impossible for us to have ether directed to anyone other than the seller or the buyer as per the code of the smart contract.

Bitcoin (BTC) trades are conducted via the Bitcoin protocol and network, which we cannot and do not control. When a seller sends BTC to a buyer during the course of a trade, the seller transfers BTC directly to an escrow script on the public Bitcoin blockchain. The escrow transaction output can only be redeemed by the buyer or seller. Coinbay LLC cannot access BTC held in escrow as per the code of the Bitcoin escrow script.

More information about the technical workings of our non-custodial Bitcoin and Ethereum escrow mechanisms can be found on our website.

7. Terms of the transaction

Once cryptocurrency is transferred into escrow, the trade should proceed in accordance with the terms agreed between the buyer and the seller. This will ordinarily require:

  1. person trading local currency should make payment;
  2. once local currency payment is received in full and in cleared funds, the cryptocurrency held in escrow must be released.

If the buyer does not represent that local currency payment is made within a defined time period, the escrow may be cancelled by the seller. The buyer may cancel the escrow at any time.

If you are the party selling cryptocurrency, it’s important to make sure you and the other party have agreed all relevant terms of the trade before you fund the escrow, as you will be charged a fee by the relevant cryptocurrency network to fund an escrow even if it ends up being cancelled.

Sales between buyers and sellers are subject to:

  • the payment of Coinbay LLC’ fee;
  • the process for resolving disputes set out in these Service Terms; and
  • the seller’s terms and conditions, or any other terms and conditions agreed between the buyer and the seller. In the event of inconsistency, the higher in the list of terms prevails.

8. Security

You must comply with all reasonable security requirements prescribed from time to time by Coinbay LLC.

9. Disputes

A dispute may arise about a trade if:

  • a party to a trade transfers local currency but the escrow isn’t released;
  • local currency payment isn’t received and the cryptocurrency remains in escrow; or
  • local currency is only part paid.

The contract of sale is between the seller and the buyer. Accordingly, the parties are required to first use best efforts to resolve the dispute between themselves.

If the parties have not resolved the dispute and have not agreed on an alternative dispute resolution process, either party may refer the dispute to Coinbay LLC.

The party referring the dispute to Coinbay LLC must give Coinbay LLC access to a digital signature that allows Coinbay LLC limited control of the escrow and the key material used to encrypt communications between the buyer and the seller. Both parties agree to give Coinbay LLC access to their conversation history and all other information required by Coinbay LLC to resolve the dispute, including evidence of payment. Coinbay LLC will review the evidence and it will direct the cryptocurrency to the party who in Coinbay LLC’ reasonable opinion is entitled to own it under the terms of sale.

Parties must respond to Coinbay LLC’ requests for information promptly (and at least within 24 hours). If a party does not respond to a request within that timeframe, Coinbay LLC may resolve the escrow in favour of the other party to the dispute.

The parties agree that except in cases of gross negligence or fraud, Coinbay LLC’ decision is final and binding on the parties and there is no appeal from such decision.

Coinbay LLC reserves the right to refuse to resolve a dispute where Coinbay LLC, in its sole discretion, considers that:

  • the issue is best resolved through other methods;
  • one or both parties have not provided all required or requested information;
  • the ownership of cryptocurrency is not clear from the information provided;
  • the contract between the parties is unlawful;
  • a party is acting unlawfully or fraudulently;
  • Coinbay LLC has a legal obligation to do so; or
  • directing cryptocurrency to a party would cause Coinbay LLC to breach any law.

Where Coinbay LLC exercises its right to refuse to resolve a dispute, Coinbay LLC will notify both parties of this. Either party may then apply for a court order resolving the dispute.

If a party provides a copy of a court order to Coinbay LLC along with access to a digital signature that allows Coinbay LLC limited control of the escrow, Coinbay LLC will resolve the escrow in accordance with the court order.

This process for resolving disputes is incorporated in all contracts between buyers and sellers arranged through Coinbay LLC.

10. Coinbay LLC fees

For transactions concluded through the Coinbay LLC smart contract service, Coinbay LLC charges a 0.25% fee for the maker (the person who placed the offer listing) and 0.75% for the taker (the person responding to the offer). The fee is charged in cryptocurrency.

This term is incorporated in all contracts between buyers and sellers arranged through Coinbay LLC and using the Coinbay LLC smart contract. The term is incorporated into the Contract and is unable to be changed.

11. Other taxes

By using Coinbay LLC, you are responsible for determining what taxes apply to any trades you conduct with other Coinbay LLC users. You must pay for all taxes applicable to all trades in which you participate.

You indemnify Coinbay LLC for any claim, loss or damage arising from your failure to pay applicable taxes.

12. Suspending and deleting your account

We may suspend or delete your account if:

  • we consider that you are using the Coinbay LLC platform to scam other users or for any other unlawful purpose;
  • we receive reports that you are communicating offensive, abusive, unlawful, defamatory, indecent or inappropriate messages to other users;
  • we know or suspect that you have completed the residency declaration dishonestly;
  • Coinbay LLC is required by law to do so;
  • there is any change in law that adversely affects Coinbay LLC’ operating model or would make it unlawful to continue the service without materially changing the Coinbay LLC platform or regulatory licence required to operate; and
  • for any other reason in our absolute discretion.

Once your account is deleted, we destroy any information we hold in relation to it after any legal requirement imposed on Coinbay LLC to retain it has expired.

After suspension of your account, you are entitled to limited access for the purpose of managing existing trades however you may not open new trades or post to the marketplace.

13. Compliance with laws

Although our website may be accessed outside of Australia, we make no representation that the services comply with the laws of any other country. If you use the services from outside Australia, you are solely responsible for ensuring compliance with your local laws.

You warrant that you will use the website and the services in compliance with your local legislation and the laws of the Commonwealth of Australia.

14. Risks associated with dealing with other users

Cryptocurrency transfers are irreversible. If you release or send cryptocurrency to somebody else, it is generally not possible for Coinbay LLC, nor yourself, to recover the funds. This also applies to sending cryptocurrency to an incorrect address. You transfer any cryptocurrency at your own risk.

If someone gains access to your account and uses your wallet, we will have no way to recover your funds.

We strongly recommend that if you do not have a strong understanding of the underlying "blockchain" technology that supports cryptocurrencies such as Ethereum and Bitcoin, you do not use our services. Cryptocurrencies can be subject to extreme price volatility. You should consider your financial circumstances and tolerance to risk before acquiring and trading in cryptocurrencies.

15. Disclaimer of warranties

Coinbay LLC does not facilitate or provide brokerage, exchange, payment, escrow, remittance or merchant services.

Coinbay LLC is only an introductory and information service, and, to the maximum extent permissible by law, is not responsible for any actions of its users including, without limitation, representations by any users regarding funds (cryptocurrency or currency) having been transferred or any ownership of cryptocurrency or funds.

To the maximum extent permitted by law, Coinbay LLC does not guarantee the quality or fitness for purpose of its services. Coinbay LLC is provided on an "as is" and “as available” basis and you agree to use it at your sole risk. While we strive to make the services available to you at all times, we do not make any representations as to the availability of the services, or that your access or use of the website will be uninterrupted or timely. There may be delays, failures, errors, omissions or loss of transmitted information.

We make no warranties, claims or guarantees related to any of our users, including but not limited to:

  • the merchantability or fitness of the user;
  • the identity of the user;
  • the location of the user;
  • the reliability and timeliness of the user;
  • the accuracy of any information the user presents; or
  • the accuracy of any information we provide about the user.

To the maximum extent permitted by law, we make no guarantees to the safety, reliability, availability or longevity of any of the data we collect or store. We strongly recommend that you keep a back up copy of your private keys so, if required, you can interact with the Contract independently of Coinbay LLC.

Our Website Terms of Use contains some disclaimers of warranties in relation to our website and the content on it.

16. Third party integrations in the Coinbay LLC wallet

The Coinbay LLC wallet may incorporate, reference or provide access to third-party services. Coinbay LLC is not the owner, operator or licensor of these third-party services, and Coinbay LLC shall not be responsible for any consequences stemming from your use of a third-party service.

You agree that your use of any third-party service is subject to separate terms and conditions issued by the respective third-party service provider. It is your responsibility to review the terms and policies of a third-party service provider before deciding to use such service.

In the Coinbay LLC wallet interface, the service that enables you to swap cryptocurrency units for units of another cryptocurrency (the "Swap" service) is facilitated by ChangeNOW, which is a third-party service provider.

You agree that if you use the aforementioned "Swap" service:

  1. The exchange service is operated by a third-party service provider, and not Coinbay LLC;
  2. You are carrying out a respective exchange solely on your own behalf for purposes related to personal non-commercial use on the basis of a legal relationship between you and the third-party service provider;
  3. You will be legally bound by the Terms of Use issued by the third-party service provider, which can be found on their website;
  4. Any claims that may arise in connection with your relationship with the third-party service provider must be settled between you and the third-party service provider; and
  5. We make no warranties, claims or guarantees related to the third-party service provider, including but not limited to its availability, quality, merchantability or fitness.

17. Limitation of liability and indemnity

You indemnify Coinbay LLC and hold Coinbay LLC harmless against all loss, claims, actions, liability, damage, costs (including legal fees on a solicitor and client basis), expenses and penalties arising directly or indirectly from any:

  1. breach by you of these Service Terms;
  2. unauthorised use of your Coinbay LLC account;
  3. act or omission (including any negligence, unlawful conduct, wilful misconduct or fraud) by you in relation to your use of Coinbay LLC’ services;
  4. third party claim against us in relation to your use of Coinbay LLC’ services;
  5. any action taken by Coinbay LLC at your request in respect of your account, trade or dispute;
  6. any inaction or delay on your part in respect of any dispute, including any failure by you to respond to a request for information by us within the time required under clause 8 (Disputes);
  7. any failure by you to comply with any reasonable recommendation made by Coinbay LLC;
  8. infringement of intellectual property rights by you; and
  9. any actions or inactions of third party service providers.

Except in the case of gross negligence or fraud in resulting a dispute, and to the fullest extent permitted by law, Coinbay LLC is not liable for:

  1. any breach of these Service Terms; or
  2. any act or omission (including any negligent act or omission) of Coinbay LLC in connection with these Service Terms or any services supplied by Coinbay LLC.

Nothing in these Service Terms restrict, exclude or modify any rights that cannot be excluded under any applicable law including the consumer guarantees set out in the Competition and Consumer Act 2010 (Cth). If we are liable for a breach of a consumer guarantee (or any other term implied by law) and that liability cannot, by law, be excluded but can be limited, our liability is, to the fullest extent permitted by law, limited to any one or more of the following as we determine in our absolute discretion:

  • (a) resupplying the services; or
  • (b) paying the costs of having the services resupplied.

If we were grossly negligent in resolving a dispute, then our liability is capped to the lower of AUD$10,000 or the fees, commissions and charges paid to us in respect of the transaction(s) giving rise to the claim.

If we are fraudulent in providing a service under these Service Terms, then our liability is uncapped.

Under no circumstances, including in cases of gross negligence or fraud, are we liable to you for any consequential loss suffered by you (including any loss of profit).

18. Privacy

Personal information we collect about you through the services (if any) will be dealt with in accordance with our Privacy Policy.

19. Applicable law and language

These Service Terms are governed by the laws ofHong Kong. These Service Terms may be translated into other languages, however the official language of these terms is English. Translations may not accurately represent the information communicated in the English language.

20. Notices

You agree that an email sent to the email address nominated when you created your account is a valid notice under these Service Terms.

You should exercise reasonable caution when reviewing emails and SMSs purporting to originate from Coinbay LLC as emails can be vulnerable to phishing, spoofing and additional viruses.

21. Changes to these terms

We reserve the right, at our sole discretion, to update, change or replace any part of these Service Terms by posting updates and changes to our website. If there is a change which has a material adverse impact on you, we will notify you by emailing you and providing 30 days’ notice. If you do not agree to the changes, your only remedy is to discontinue using the services.

It is your responsibility to check our website periodically for changes. Your continued use of or access to our website or the services following the posting of any changes to these Service Terms constitutes acceptance of those changes.

These Service Terms were last updated in May 2018.

22. Terms that survive account closure

The following terms in these Service Terms continue to apply after the closure of your account:

  • Clause 8 – Disputes;
  • Clause 9 – Coinbay LLC fees; and
  • Clause 14 – Limitation of liability and indemnity.

23. Entire understanding

These Service Terms contain the entire understanding between the parties as to the subject matter of this terms.

24. Contact

Please send any questions, comments, issues, or general correspondence via email to