This Act protects the customers of Digital Companies with money set aside in advance. A company places a Protection Deposit in Bitcoin with the Union Treasury; anyone it wrongs can claim from that deposit through the Union Court.
It is made by the Founding Council under Article 5 of the Charter.
Article 1The Protection Deposit
- 1.1A Protection Deposit is an amount of Bitcoin paid by a Digital Company to the Union Treasury and held by the Treasury to meet claims against the company.
- 1.2A deposit is not a fee. It remains the company's, subject to the claims of its customers under this Act, and is returned under Article 7.
Article 2When a deposit is required
- 2.1A company that holds a licence for a protected class under the Licensed Activities Act keeps a Protection Deposit for as long as it holds that licence.
- 2.2Any other Digital Company may place a deposit voluntarily, of at least 0.01 BTC, to show its customers that it is protected.
Article 3Amount
- 3.1The minimum deposit for each protected class is set in the Schedule to the Licensed Activities Act. A company holding several protected classes keeps at least the highest of their minimums.
- 3.2A company may deposit more than the minimum. The amount it holds is shown in its register entry and, unless the company chooses otherwise, on its protection mark.
Article 4How the Treasury holds deposits
- 4.1The Treasury holds deposits in Bitcoin, separately from the Union's own funds. It does not lend, invest, spend or pledge them, and pays no interest on them.
- 4.2A deposit is paid out only to a claimant under an award of the Union Court, or returned to the company under Article 7.
- 4.3The Treasury publishes the total amount of deposits it holds. The amount held for each company appears in its register entry, with the Bitcoin transactions by which it was paid, so that anyone can verify it on the Bitcoin blockchain.
Article 5Claims
- 5.1Any holder of a Digital Passport who has suffered loss because a protected company failed to meet its obligations to them may bring a claim against the company in the Union Court, for the published filing fee.
- 5.2The Court hears both parties under the Court and Arbitration Act. If it upholds the claim, it awards the claimant an amount in Bitcoin. The award is deducted from the company's deposit when the decision is issued, and the Treasury pays it to the Bitcoin address the claimant gives in the case.
- 5.3Awards are paid in the order in which they are made. Where pending claims together exceed the deposit, the Court may hold payments and share the deposit between successful claimants in proportion to their awards.
- 5.4The protection is limited to the amount of the deposit. The Union does not guarantee a company's conduct and pays nothing beyond the deposit. A claimant keeps any other remedy against the company.
Article 6Topping up
- 6.1When a payment from a deposit takes it below the required minimum, the company restores it within 30 days.
- 6.2Until it does, its protected licences and its right to show the protection mark are suspended.
Article 7Return of the deposit
- 7.1When a company is dissolved or struck off, when its registration ends, or when it gives up its protected licences or voluntary protection, its deposit is returned after a claims period of 180 days.
- 7.2During that period customers may still bring claims. Any amount needed for claims pending at the end of the period is kept until they are decided.
- 7.3The balance is paid to the Bitcoin return address that the company's owner saves from their account, which must be given before a deposit is placed and may be changed at any time. Network fees for the return are deducted from it.
Article 8The protection mark
- 8.1A company whose deposit is at or above its required minimum may show the protection mark “Licensed by UHDU · Protected by the Union Treasury” on its website and materials, together with its Company ID or a link to its register entry, so that anyone can check it.
- 8.2The Union provides the mark as a live badge drawn from the register, which changes as soon as the deposit or a licence lapses. A company may also show a copy of the mark it has downloaded, only while its deposit is in good standing.
- 8.3The mark refers only to the Union's own licensing and protection. It must not be shown in a way that suggests the company is authorised or supervised by any state or state regulator, and a company that also needs authorisation where it operates must not use the mark in place of it.
- 8.4The mark is a symbol of the Union under the Symbols Act. Showing it without a deposit in good standing, or in a way that misdescribes the protection, is misuse of the Union's symbols and a ground for revoking licences and striking off.
Article 9Amendment
- 9.1The Founding Council may amend this Act at any time.