Terms of Service v2 — proposed amendment (DRAFT — SUPERSEDED)
⚠ Superseded. This draft proposed that all circle contributions migrate to dedicated multi-signature regulated accounts, retiring Member-to-member custody as a creation-time option. The Custody Framework Charter v1.0 (published 2026-06-03) supersedes that direction with a three-category model:
- Category A (regular cycle contributions, single-jurisdiction Circles) — Member-to-member or escrow-held by Member vote at formation.
- Category B (loan accounts, CPR, collateral, lending pool capital) — escrow-only; no vote.
- Category C (cross-border Circles) — escrow-only for all funds.
Members may choose Member-to-member custody for Category A; this draft would have forbidden that choice. A new Terms v2 amendment will be drafted to align with the Framework. The text below is retained for the change-history record. No part of this draft is in force; the Material Change procedure has not opened on it.
Original status (now overtaken): v2.0 draft. Not yet binding. The live Terms of Service v1.0 remain in force.
What this amendment proposes
This amendment extends the non-custodial principle within the community, not only at the platform's edge. The substantive change is that pooled monies — circle contributions, lending pool capital, federation pool capital — must sit in a dedicated, multi-signature, regulated account opened in the name of a cooperative or regulated entity. The Treasurer (or federation coordinator) coordinates the flow; the Treasurer does not hold the funds and cannot disburse alone.
The clause-by-clause changes are below. Sections of the live Terms that are not changed by this amendment remain in force unchanged.
Proposed amendment — clauses 3, 5.1, 5.3
Clause 3 — Non-Custodial Principle (revised)
Circlworld does not custody, hold, move, or control Member funds at any point. Circlworld provides coordination infrastructure — governance tools, identity verification, trust scoring, dispute resolution, and audit trails.
The non-custodial principle extends within the community. Pooled monies — circle contributions, lending pool capital, federation pool capital — must sit in a dedicated, multi-signature, regulated account opened in the name of the cooperative entity or regulated service provider that administers the pool. Pooled monies must not sit in a Treasurer's personal or business account, must not sit in any individual Member's account, and must not sit in any account where one Member can move funds unilaterally.
The Treasurer (or federation coordinator) coordinates the flow on the rails the platform provides. The Treasurer does not hold the funds. The Treasurer cannot disburse alone. Disbursement requires the multi-signature mandate documented in the circle's or pool's governance documents.
Clause 5.1 — Creating a Circle (revised)
Any Member who meets the Treasurer eligibility requirements may create a Circle. At the moment of creation, the Member specifies the dedicated, multi-signature, regulated account that will hold the Circle's contributions, the mandate (which Members hold signing rights, the minimum signatures required to disburse), and the account provider (bank, building society, credit union, escrow agent).
The Treasurer acknowledges fiduciary-like responsibilities to the Circle's Members in respect of administration and coordination, but does not custody the funds in any individual capacity.
Clause 5.3 — Contributions and Payouts (revised)
Contributions are made directly to the dedicated account specified at the Circle's creation. Payouts are disbursed from the dedicated account by multi-signature, in accordance with the mandate, to the rotation-position Member due. The Treasurer does not receive contributions personally and does not disburse payouts unilaterally.
Where a Circle was created before this amendment took effect under a Member-to-member custody model, the Circle may continue under that model for as long as its current cycle runs. At the next cycle start, or within twelve (12) months of this amendment's effective date (whichever is later), the Circle's custody model migrates to a dedicated, multi-signature, regulated account. The migration procedure is documented in the Member Activity Record Methodology and the Circle's bylaws template.
Circlworld records contribution and payout events but does not process the funds.
What is not changed
The following clauses of Terms v1.0 are not changed by this amendment and remain in force as currently written:
- Clauses 1–2 (preamble + definitions).
- Clause 4 (Your Account).
- Clauses 5.2 (Joining a Circle), 6 (Standing), 7 (Disputes), 8 (Acceptable Use), 9 (Privacy), 10 (Termination), 11 (Limitation of Liability), 12 (Indemnification), and 13 (Changes to Terms).
In particular, clause 13 (Changes to Terms) is the procedure by which this amendment itself will be brought into force.
Why this amendment is being proposed
The non-custodial principle is the platform's first inviolable principle. The principle is intended to put the Member in control of the Member's money. In practice, the Member-to-member custody model — where the Treasurer receives contributions into their personal or business account and pays them out from the same — is a residual single-point-of-failure that the principle was never meant to permit. Circles have lost contributions to Treasurer misfortune (death, illness, dispute, fraud); the platform's audit trail records the events but cannot recover the money.
This amendment removes the residual. From the effective date forward:
- New Circles are created with dedicated, multi-signature, regulated accounts. Member-to-member custody is not a creation-time option.
- Existing Circles migrate within the documented window.
- Lending pools (when the Lending Center activates) follow the same rule.
The architectural cost is modest: the Member specifies the account at creation, the Members confirm the mandate, and the rails of the chosen provider carry the funds. The architectural benefit is large: no Member's misfortune can become a Circle's loss.
Procedure to bring this amendment into force
Per Terms v1.0 clause 13:
- Publication — this draft is published at /legal/terms-v2-draft and announced through the Pulse and the Member's notification channels.
- Notice period — at least thirty (30) days of notice before any change takes effect.
- Member ratification — Members may comment through the Petitions Office. Material objections may modify the amendment.
- Effective date — the amendment takes effect on a published date, no sooner than 30 days after publication.
This amendment does not require Member by Member re-acknowledgement; it is a Material Change applied across the Membership on the effective date. Members who do not agree may close their account before the effective date without penalty.
Where to comment
Comment through the Petitions Office. Petitions reaching the threshold for Member action go to a Membership vote per the Cultural Architecture Policy v2.0.
Reminder: v2.0 draft, not in force. Comments welcome through the Petitions Office before the notice period opens.