Segregation of Clients’ Crypto-Assets and Funds

Protection of Client Funds & Crypto-Assets

zerohash europe's End Customer crypto assets are fully segregated from zerohash Europe's proprietary assets and are otherwise protected by the zerohash europe User Agreement, regulatory status, and operational procedures.

Segregation of Clients' (Fiat) Funds

Fiat funds of ZHEU's clients are held by a separate client money foundation (Stichting Derdengelden zerohash Europe), through its banking partners, to safeguard the ownership rights of clients (also in case of an insolvency) and prevent the use of the relevant client fiat funds by ZHEU for its own account. ZHEU and Stichting Derdengelden zerohash Europe will maintain separate accounts from one another, and Stichting Derdengelden zerohash Europe will maintain client fiat funds in an account, or accounts, designated for such clients.

Segregation of Clients' Crypto Assets

Crypto-assets of ZHEU's Clients are held within the Stichting Derdengelden zerohash Europe Omnibus wallets (each an "SDG ZHE Omnibus Wallet"). There will be at least one SDG ZHE Omnibus Wallet per supported asset. As further noted below, ZHLS is a Client of ZHEU.

In order to safeguard and track the (ownership) rights of End Customers in respect of their respective crypto-assets, ZHEU maintains two separate records, i.e (i) the internal ledger of customer balances vs. (ii) actual wallet balances held in ZHEU and/or Stichting Derdengelden zerohash Europe owned wallets. At the end of each day, the custody ledger record and the intra-day trading record are reconciliated/merged to ensure that each Client's crypto-asset holding as set out in the custody ledger record administrative record is revised in line with any trades made during the day as administered in the intra-day trading record. The administrative intra-day trading record does not reflect any actual on-chain movement of crypto-assets.

Role of ZHLS

zerohash Liquidity Services LLC ("ZHLS") is a zerohash Europe affiliate that is engaged in the business of settlement provisioning for zerohash Europe transactions. ZHLS's business activities involve aggregating several liquidity providers pricing and liquidity such that ZHLS for zerohash US companies may offer world-class execution services to End Customers and for zerohash Europe to act as settlement provider.

ZHLS will maintain an account at zerohash Europe for the purpose of: settling crypto-assets on behalf of ZHEU and LPs that trade on the zerohash Europe Platform.

Conflict of Interest

As there may be a perceived conflict of interest when holding affiliated End Customer assets in the SDG ZHE Omnibus Wallets and ZHLS when acting as settlement provider, ZHLS shall execute a subordination agreement with zerohash EU and Stichting Derdengelden zerohash Europe that will ensure that non-affiliated End Customers shall have first rights to all assets in the SDG ZHE Omnibus Wallets in the case of zerohash Europe or ZHLS's insolvency. The subordination of claims will ensure that End Customer assets are bankruptcy remote from zerohash Europe and its affiliates.

Segregation of Wallets

zerohash europe's customer crypto assets are fully segregated from zerohash Europe's proprietary assets and are otherwise protected by the zerohash User Agreement, regulatory status, and operational procedures.

User Agreement

zerohash europe's User Agreements and operational treatment of customer assets establishes a proper custodial relationship with customers to protect assets in the case of bankruptcy. The following zerohash Europe User Agreements provisions protect customer crypto assets in the case of zerohash Europe's bankruptcy:

• Section 9.1: establishing that Stichting Derdengelden zerohash Europe is acting as a custodian holding customer assets on behalf of the customer.
• Section 9.3: establishing that all customer crypto assets held for the customer's benefit.
• Section 9.3: establishing that title to crypto assets deposited or obtained from transactions remains with the customer and not with zerohash.