1. Purpose and Scope

The purpose of this Conflicts of Interest Policy is to establish a robust process for identifying, managing, and disclosing conflicts of interest within Walleexer s.r.o. This policy ensures compliance with the Markets in Crypto-Assets Regulation (MiCA), adopted by the European Union on 31 May 2023, and all relevant Czech and EU regulations. The policy applies to all employees, management, the Data Protection Officer (DPO), the AML department, and third parties acting on behalf of Walleexer s.r.o.

2. Policy Statements

• Walleexer s.r.o. is committed to conducting business with integrity, fairness, and due care, always in the best interests of clients and the integrity of the financial services industry.
• All employees must avoid situations where their personal interests conflict, or could conflict, with those of clients or the company.
• The company's remuneration structure is designed to prevent incentives that could compromise client interests or regulatory obligations.

3. Definitions

• Conflict of Interest: Any situation in which financial or other personal considerations have the potential to compromise or bias professional judgment and objectivity, whether actual, apparent, or potential.
• Data Protection Officer (DPO): An independent officer responsible for overseeing personal data processing and GDPR compliance. The DPO reports directly to the Director, cannot hold conflicting roles, and is protected from undue influence by internal controls.
• AML Department: The team responsible for anti-money laundering (AML) and counter-terrorism financing (CTF) compliance, including transaction monitoring and reporting suspicious activity.
• Director: The individual responsible for strategic decisions and escalation of complex conflicts of interest.

4. Identification of Conflicts of Interest

• All employees, including compliance, AML, DPO, and management, are responsible for identifying actual or potential conflicts of interest in daily operations.
• The company maintains a central register of identified conflicts, updated as new cases arise and reviewed at least annually.
• Conflicts between the company and clients, between two or more clients, or between employees and company interests are all covered by this policy.

5. Organizational Structure and Responsibility Mapping

The organizational structure clearly separates duties among the AML department, DPO, and Director.

• AML: Responsible for transaction monitoring and reporting suspicious activities.
• DPO: Ensures data protection and GDPR compliance, providing independent oversight.
• Director: Holds ultimate responsibility for all strategic decisions regarding conflict of interest management.

6. Managing Conflicts of Interest

• Once identified, conflicts are assessed for severity and potential impact by compliance, AML, DPO, and management.
• Controls may include information barriers, segregation of duties, and restrictions on personal transactions.
• The DPO operates with full independence from operational management and decision-making, is prohibited from holding conflicting roles, and is protected by internal controls such as annual conflict declarations and Director oversight.
• If a conflict cannot be adequately managed, the company must decline to act and document the decision in the register.

7. Disclosure and Transparency

• All actual or potential conflicts, along with mitigation steps, are disclosed to clients in writing before any transaction is executed.
• Disclosures include the nature of the conflict, its potential impact, mitigation measures, and any relevant financial interests.
• The policy and relevant registers are available to clients upon request, subject to data protection requirements.

8. Internal Controls and Monitoring

• Regular audits and reviews of conflict of interest procedures are conducted, including independent oversight by Compliance and the DPO.
• All reported conflicts are documented, analyzed, and, if necessary, result in corrective actions or sanctions.
• The DPO ensures that data protection requirements are met in all monitoring and reporting activities.

9. Employee Personal Account Transactions

• Employees must obtain written pre-approval from the Director or AML department before executing personal transactions in crypto assets or securities.
• All accounts must be declared and monitored, with the DPO ensuring data protection compliance.

10. Training and Awareness

• Annual training on conflict of interest identification, management, and disclosure, as well as AML and data protection, is mandatory for all staff, including the DPO and AML department.
• The training program covers practical scenarios, regulatory updates, and ethical conduct, and is documented in the Training and Awareness section.

11. Regular Policy Review

• This policy is reviewed at least annually or upon significant business or regulatory changes.
• Updates are approved by the Director and communicated to all staff.

12. Examples and Case Studies

• The policy includes practical examples of potential conflicts of interest, including scenarios involving the DPO and AML department, to help staff understand the application of policy provisions.
• Examples are provided in a dedicated appendix D.

13. Compliance and Consequences of Non-Compliance

• The Group Compliance Officer, together with the DPO, monitors compliance with this policy. Non-compliance may result in disciplinary action, including dismissal or debarment, and may be reported to the Czech National Bank (CNB) as required by law.
• The DPO independently oversees data protection compliance and reports directly to the Director.

APPENDIX A - CONFLICTS OF INTEREST REGISTER

Purpose: To record the incidence of conflicts of interest by the Walleexer s.r.o. to ensure compliance with the requirements of the Act. This REGISTER is intended as a summary document only.

APPENDIX B - PERSONAL INTEREST REGISTER

APPENDIX C - GIFTS AND NON-CASH INCENTIVES RECEIVED REGISTER

Purpose: To record the flow of incoming gifts and other gratifications within the Walleexer s.r.o.

Appendix D: Examples and Case Studies – Conflicts of Interest

This appendix provides practical examples of conflicts of interest relevant to Walleexer's operations, including scenarios involving the DPO, AML department, and other staff. These cases help clarify how policy provisions are applied in real situations and support staff in identifying and managing conflicts effectively.

1. DPO Conflict of Interest Scenarios

Example 1: DPO with Conflicting Operational Role

Scenario:
The DPO is also appointed as Head of Compliance or Head of AML. As part of these duties, the DPO is responsible for determining the purposes and means of processing personal data for AML monitoring.

Risk:
This dual role means the DPO is required to independently assess and monitor data processing activities that they themselves have designed or implemented, compromising their independence and objectivity.

Policy Application:

• The DPO must not hold any position that allows them to determine the purposes or means of data processing.
• If unavoidable, the company must appoint a deputy DPO (outside the AML department) to oversee data processing in AML matters, or ensure that all decisions involving potential conflicts are reviewed and signed off by the Director or another independent authority.

2. AML Department Conflict of Interest Scenarios

Example 2: AML Officer with Personal Stake in a Client

Scenario:
An AML officer is responsible for monitoring transactions of a client in which they or a close relative have a financial interest.

Risk:
The officer may fail to report suspicious activity or may influence the outcome of AML investigations to benefit themselves or their relative.

Policy Application:

• All employees must disclose any personal or family interest in clients.
• The AML officer must recuse themselves from any investigation or monitoring of that client, and the case should be assigned to another officer.
• The conflict and mitigation steps must be recorded in the Conflicts of Interest Register.

3. Personal Account Dealing and Insider Information

Example 3: Employee Trading on Insider Information

Scenario:
An employee learns through their role that Walleexer s.r.o. will soon list a new crypto asset. Before the public announcement, the employee purchases the asset on another exchange, anticipating a price increase.

Risk:
This constitutes insider trading and a severe conflict of interest, as the employee uses confidential, non-public information for personal gain.

Policy Application:

• All employees are prohibited from trading on material non-public information.
• Pre-approval is required for personal account transactions in crypto assets.
• Employees must declare all accounts and holdings, and all personal trades are subject to monitoring by Compliance and the DPO.
• Breaches result in disciplinary action and may be reported to regulators.

4. Preferential Treatment of Clients

Example 4: Offering Preferential Terms

Scenario:
A relationship manager offers faster withdrawal processing or better exchange rates to high-volume clients in exchange for gifts or incentives.

Risk:
This creates a conflict between the interests of the company, the employee, and other clients, potentially harming retail clients and breaching fairness obligations.

Policy Application:

• All client services must be provided impartially and without preferential treatment.
• Gifts and incentives must be declared and recorded in the Gifts Register.
• Any such conflict is disclosed to Compliance, and corrective action is taken.

5. Outside Business Interests

Example 5: Employee with External Directorship

Scenario:
An employee or director holds a position in another company that is a vendor or competitor of Walleexer.

Risk:
Decisions regarding vendor selection, partnerships, or procurement may be biased, or confidential information may be shared inappropriately.

Policy Application:

• Employees must declare all outside business interests and seek pre-approval for external roles.
• The company reviews and, if necessary, restricts or prohibits external appointments that create conflicts.
• All declarations are recorded and reviewed annually.