Prevention of Conflicts of Interest Bleap SIA

Chapter I: Scope, Purpose and Governance Principles

Objective and Regulatory Context

This Procedure for the Prevention of Conflicts of Interest (hereinafter, the "Procedure") establishes the mandatory organizational, administrative and governance framework for Bleap SIA (hereinafter, the Company). Operating as a regulated crypto-asset service provider, the Company enforces this framework to systematically identify, prevent, manage and strictly as a measure of last resort disclose conflicts of interest.

Scope of Application

This Procedure applies comprehensively to conflicts of interest, both financial and non-financial, that arise between:

1. 1. The Company and its shareholders;
   2. Any person or entity directly or indirectly linked to the Company or its shareholders by way of control;
   3. Members of the Company’s Management Board;
   4. The Company's Employees, contractors or outsourced service providers;
   5. The Company and its Clients; 
   6. At least two Clients whose mutual interests conflict with one another.

Governance, Proportionality, and Risk Culture

In accordance with applicable law and internal governance standards, the Management Board holds ultimate accountability for establishing, implementing, and maintaining an effective, written conflicts of interest framework. This framework is structurally proportionate to the nature, scale, and complexity of the Company's crypto-asset operations. The Company mandates a robust risk culture and tone at the top ensuring that independent control functions operate without operational interference to safeguard objectivity.

The Best Interest Principle

In the execution of all professional duties, the Company, its Management Board, and its Employees are strictly mandated to act honestly, fairly, and professionally in accordance with the best interests of the Client, ensuring that the pursuit of commercial objectives never overrides the obligation to mitigate compliance and reputational risks.

Chapter II: Definitions and abbreviations

For the purposes of this Procedure, the following definitions apply:

1. 1. Board (or Management Board): The Management Board of Bleap SIA, which bears ultimate collective accountability for the Company's governance framework, risk appetite, and the effective implementation of this Procedure.
   2. Client: Any natural person to whom the Company provides, or intends to provide, regulated services in the field of crypto-assets.
   3. Company: Bleap SIA, with its registered office in Riga, Latvia.
   4. Company Group: The Company, its parent undertakings, subsidiaries, and any connected entities linked by a control relationship as defined under applicable EU accounting and corporate directives.
   5. Compliance Officer (CCO): The designated independent control function (Second Line of Defense) responsible for overseeing, monitoring, and enforcing this Procedure, ensuring that conflict of interest risks are mitigated without operational interference.
   6. Conflict of Interest: A situation in which the financial, personal, or professional interests of the Company, a Relevant Person, or a Related Person materially diverge from the regulatory obligations owed to a Client, or conflict with the statutory mandate to act honestly, fairly, and professionally in the best interests of the Client or a situation where competing Client interests impair the Company’s objectivity, resulting in a potential risk of damage to the Client’s interests or the Company's operational integrity.
   7. Employee: Any natural person employed by the Company under an employment contract, as well as any seconded staff, contractors, or persons operating under a civil law mandate who continuously provide services under the direct operational control and supervision of the Company.
   8. Related Person: Any natural or legal person who is:
      1. A shareholder of the Company; 
      2. A person directly or indirectly linked to the Company or its shareholders by a control relationship
      3. A member of the Management Board; 
      4. An Employee; 
      5. A Client.
   9. Relevant Person: Any natural or legal person who is:
      1. A shareholder of the Company; 
      2. A person directly or indirectly linked to the Company or its shareholders by a control relationship;
      3. A member of the Management Board; 
      4. An Employee.
   10. Remuneration: Any form of payment or benefit - whether fixed or variable, financial or non-financial (including bonuses, tokens, or equity) - provided directly or indirectly by the Company in connection with the provision of crypto-asset services, which could potentially incentivize risk-taking behavior or compromise objective decision-making.

Terms used in this Procedure but not explicitly defined herein shall have the exact meaning assigned to them under Regulation (EU) 2023/1114 (MiCA) and related delegated acts.

Chapter III: Detailed Provisions

Identification of Conflicts of Interest

1. Core Identification Principle 
   1. In alignment with the Company’s operational model facilitating the exchange of crypto-assets for funds and for other crypto-assets a conflict of interest does not arise from fiduciary asset management, as the Company does not hold or control client assets. Rather, a conflict of interest is defined as any known circumstance that may cause the interests of the Company, a Relevant Person, a Related Person or the broader Company Group to diverge from the obligation to act honestly, fairly and professionally in the best interests of the Client.
2. Types  of Conflict
   1. The Company systematically maps and identifies potential and actual conflicts of interest across three primary levels:
      1. Company vs. Client: Conflicts arising between the corporate interests of Bleap SIA (or its Company Group) and the interests of the Client.
      2. Relevant Person vs. Company/Client: Conflicts arising from the personal, financial, or professional activities of Board members or Employees against the Company or the Client.
      3. Client vs. Client: Conflicts where the Company’s actions may unfairly prioritize the interests of one Client over another.
3. Triggers and Circumstances
   1. A potential or actual conflict of interest is explicitly identified when the Company, a Relevant Person, or a Related Person:
      1. Financial Gain & Routing Bias: May obtain a financial or non-financial benefit, or avoid a loss, directly at the expense of at least one Client during the execution of crypto-asset services. In the context of a non-custodial architecture, this specifically includes configuring backend APIs or exchange logic to route client transactions to specific liquidity providers, decentralised pools, or third-party exchange partners based on internal inducements, rebates, or personal affiliations, rather than prioritizing the most favorable exchange rate and execution terms for the Client.
      2. Divergent Outcomes (Execution & Volatility Delays): Has an interest in a specific outcome of an exchange or transfer service that fundamentally diverges from the Client's objective. In a non-custodial architecture, this includes intentionally delaying execution during periods of high market volatility to capture beneficial price disparities for the Company (arbitrage), or structuring backend logic where the Company profits disproportionately from failed, delayed, or network-congested transactions at the Client's expense.
      3. Preferential Treatment (Latency & Execution Tiering): Possesses financial or operational incentives to place the interests of one Client (or group of Clients) above another without objective, transparent, and risk-based justification. This includes manipulating execution latency, unfairly subsidizing blockchain network fees for specific high-value users to ensure faster on-chain confirmation, or applying hidden, preferential spread algorithms at the direct detriment of standard retail execution.
      4. Parallel Activities (Order Flow & Proprietary Trading): Conducts parallel trading or operational activities that create competitive friction with Client transactions. For a non-custodial routing provider, this specifically targets situations where the Company or a Relevant Person engages in proprietary trading using internal knowledge of aggregate Client order flow such as front-running or exploiting known transaction volume spikes before routing Client orders to external liquidity pools.
      5. Third-Party Inducements (Kickbacks & Token Bounties): Receives, or will receive, unauthorized Remuneration from an external third party in connection with a service provided to the Client, outside of standard, fully disclosed commissions. In the crypto-asset sector, this strictly prohibits accepting undisclosed liquidity rebates, governance tokens, preferential airdrop allocations, or marketing bounties from external liquidity providers, decentralized exchanges (DEXs), or token issuers in exchange for defaulting Client transaction volume to their specific protocols or smart contracts.

Relevant Person Scenarios (Internal Governance)

The Company monitors situations where a Relevant Person's external entanglements pose a risk to the Company's operational integrity. High-risk circumstances include situations where a Relevant Person:

1. 1. External Governance Roles: Performs any management, advisory, or oversight function in the bodies of an external entity whose interests are contrary to Bleap SIA.
   2. Equity, Tokens, and Debt: Holds material equity, significant governance tokens, or debt involvement in a competing crypto-asset protocol or external entity.
   3. External Service Agreements: Has entered into personal contractual agreements resulting in the obligation to provide services to an external entity with divergent interests.
   4. Proximity Risks: Maintains, or has maintained within the last three (3) years, a close personal, professional, or political relationship with an individual or entity whose interests conflict with the Company.

Entity and Group-Level Identification

When identifying entities whose interests may conflict with the Company, the Compliance Officer must evaluate whether the entity:

1. 1. Stands to obtain a financial benefit or avoid a loss at the expense of Bleap SIA.
   2. Operates as a supplier, contractor, liquidity provider, or outsourced service provider where objective circumstances indicate a risk that commercial pressures may compromise the Company’s compliance standards or service quality.
   3. Forms part of the wider Company Group. The Company explicitly identifies, manages, and monitors any circumstances originating from the structure and activities of other entities within the Company Group that could impair Bleap SIA's ability to act independently and in the best interests of its Clients.

Chapter IV: Prevention and Mitigation of Conflicts of Interest

General Mandate and Proactive Avoidance

Relevant Persons are strictly obligated to proactively avoid and refrain from engaging in any activities, relationships, or technical configurations that could give rise to a conflict of interest. The Company enforces a robust internal control system to ensure that the Client’s interests are never prejudiced by the operational or financial interests of the Company, its Group, or its staff.

Organizational and Structural Controls

To structurally prevent conflicts of interest and ensure independent oversight, the Company implements the following organizational measures:

1. 1. Segregation of Duties (SoD): The organizational structure mandates strict separation between operational units whose activities pose inherent conflict risks. For example, personnel responsible for configuring backend API routing, evaluating Liquidity Providers (LPs) or setting automated spread logic must operate independently from personnel managing corporate treasury or institutional partnerships.
   2. Information Barriers (Electronic & Physical): The Company enforces strict logical access controls and information barriers (walls) to secure confidential Client transaction data and aggregate order flow. This prevents the unjustified internal or external flow of data that could be exploited for front-running, proprietary trading or preferential routing.
   3. Remuneration Neutrality: The Company prevents the existence of direct dependencies between the Remuneration of Relevant Persons and specific transactional outcomes. Compensation structures (whether in fiat, equity, or tokens) must never incentivize Employees to configure execution logic or route transactions in a manner that disadvantages the Client or prioritizes a specific external partner over best execution.

Operational and Technical Controls

Addressing the specific technical vulnerabilities of a non-custodial, API(Application Programming Interface)-driven crypto-asset service provider, the Company applies the following targeted operational controls:

1. 1. Algorithmic and Routing Objectivity: The Company ensures ongoing, independent supervision by the Compliance function over the automated systems and APIs used for fiat-to-crypto and crypto-to-crypto exchanges. Routing decisions and LP integrations must be based on objective, documented criteria (e.g., liquidity depth, latency, and pricing) rather than undisclosed internal affiliations.
   2. Prohibition of Unauthorized Inducements: The Company strictly prevents third parties from exerting unfavorable influence over the Company's services. Relevant Persons are expressly prohibited from accepting undisclosed liquidity rebates, governance tokens, airdrops, or marketing bounties that could influence the selection of exchange partners or decentralized protocols.
   3. Affiliate and Promoter Neutrality: Where the Company utilizes external affiliates or promoters to acquire Clients, the Company ensures that affiliate remuneration structures do not incentivize the misrepresentation of Bleap SIA’s services. Affiliates must clearly disclose their financial relationship with the Company to prospective Clients, ensuring the Client's decision to use the Bleap App is not clouded by undisclosed third-party financial conflicts.

Internal Governance and Relevant Person Controls

To mitigate risks arising from the external entanglements of internal staff, the Company enforces the following personnel controls:

1. 1. Mandatory Disclosure and Outside Business Activities (OBA): Shareholders, Management Board members, and Employees must immediately report to the Compliance Officer (CCO) any external entanglements that pose a risk of conflict. This includes holding material equity, significant governance tokens, debt instruments, or board/advisory positions in external crypto-asset entities or LPs.
   2. Monitoring of Personal Account Dealing (PAD): The Company monitors and, where necessary, restricts the personal crypto-asset trading activities of Relevant Persons who have access to aggregate Client order flow or pending integration plans, preventing the misuse of confidential Company information.
   3. Non-Competition and Exclusivity: Non-competition clauses and prohibitions on unauthorized secondary employment or advisory roles are strictly embedded in the contractual agreements of all Relevant Persons.

Corporate Gifts, Hospitality, and Entertainment

In addition to the prohibition on crypto-native inducements (tokens, airdrops, rebates), Relevant Persons are strictly prohibited from soliciting or accepting corporate gifts, excessive hospitality, or entertainment from external vendors, Liquidity Providers, or B2B partners that could impair their operational objectivity.

Any corporate gift or hospitality offered to an Employee with an estimated fiat value exceeding €1000 must be immediately declared to the CCO.

The CCO reserves the right to mandate the return or refusal of any gift or hospitality that creates an active conflict of interest, particularly during active vendor procurement or LP integration negotiations.

Third-Party and Group-Level Controls

Outsourcing and Partner Vetting: In its relations with external liquidity providers, DEXs, and technology vendors, the Company applies contractual safeguards to ensure these entities do not introduce operational conflicts. If necessary, the Company will formally query cooperating entities regarding potential conflicts and require remediation before proceeding with integration.

Group-Level Independence: The Company monitors its relationship with the wider Company Group to ensure that intra-group settlements does not impair Bleap SIA's operational independence or result in the preferential routing of Client transactions to Group-affiliated entities without objective justification.

Escalation, Independent Assessment, and Recusal

Independent Escalation: The Company ensures the existence of an independent assessment procedure, led by the CCO, for any suspected conflict of interest.

Ad-Hoc Supervision and Intervention: The Company reserves the right to introduce non-standard monitoring or special supervision over specific API integrations, LP relationships, or transaction cohorts if a high risk of conflict is detected.

Mandatory Recusal: The CCO possesses the authority to mandate that a Relevant Person be entirely recused from participating in a specific project, LP negotiation, or operational configuration if their involvement presents an unmanageable conflict of interest.

Chapter V: The Compliance Officer (CCO)

Operating as the independent Second Line of Defense, the Compliance Officer (CCO) is vested with the authority to coordinate, supervise, and enforce the detection, mitigation, management, and where strictly necessary disclosure of conflicts of interest. The CCO operates independently from business generating lines to preserve absolute objectivity.

The CCO is expressly mandated to:

• 1. Maintain the Conflicts Register: Continuously update and securely store a central Register of Actual and Potential Conflicts of Interest. This must document the specific risk, the Relevant Persons involved, the remedial measures enforced, and any required disclosures.
  2. Proactive Monitoring: Monitor whether the Company’s operational configurations (e.g., API routing algorithms, Liquidity Provider integrations, and partnership agreements) generate conflicts of interest that could prejudice the Client.
  3. Enforce Mitigation: Execute binding decisions on the management and elimination of identified conflicts, up to and including suspending specific integrations or mandating personnel recusal.

Management Board Reporting: The CCO shall submit a comprehensive Conflicts of Interest Report to the Management Board at least annually, and on an ad hoc basis if critical risks materialize. This report must detail:

• 1. A breakdown of all identified actual and potential conflicts over the reporting period.
  2. The specific organizational, technical, or administrative measures deployed to mitigate these risks.
  3. Any identified deficiencies in this Procedure, the execution algorithms, or personnel compliance, alongside a concrete remediation plan.

Chapter VI: Management Board Governance

Tone at the Top and Information Asymmetry: Members of the Management Board bear ultimate accountability for the Company’s risk culture. They must ensure mechanisms are in place to manage the process and provide access to data to/from the CCO and other Relevant Persons regarding the operational and compliance risks associated with the Company's crypto-asset activities.

Strict Non-Competition and Prohibited Entanglements: To preserve relationship integrity with the Company and its Clients, each member of the Management Board is strictly prohibited from:

1. 1. Conducting any competitive activity in the crypto-asset sector on their own or a third party's behalf.
   2. Holding capital involvement, governance tokens, managerial positions, or board seats in external entities (outside the Company Group) that conduct competitive activities.
   3. Providing external consulting or advisory services that introduce conflicting commercial interests.

Escalation Protocols & Recusal

Immediate Disclosure: If a Board member's external obligations or personal crypto-asset holdings create an actual or potential conflict regarding a specific Board resolution (e.g., approving a new Liquidity Provider), the member must immediately declare this to the CCO and the rest of the Board.

Mandatory Recusal: The conflicted member must strictly refrain from participating in discussions, influencing decisions, or voting on the resolution in question.

Loss of Quorum: If recusals permanently incapacitate the Management Board's ability to effectively and legally govern the Company, the Board must immediately convene a meeting of the Company's shareholders to either appoint additional independent members or dismiss the conflicted members.

Chapter VII: Conflict of Interest Management

The Primacy of the Client: In the event of any conflict of interest, the Company fundamentally prioritizes the Client’s best interests. Commercial objectives, revenue targets, and backend rebates must never override statutory duties, the protection of the Client, or the reputational integrity of Bleap SIA.

Obligations of Relevant Persons: Shareholders, Board members, and Employees are required to proactively anticipate and avoid conflict vectors by:

1. 1. Refraining from deriving any undisclosed personal benefits (e.g., kickbacks, airdrops, priority execution) resulting from the Company’s operations.
   2. Immediately escalating any emerging conflict threat to the CCO.
   3. Strictly safeguarding confidential Client data, aggregate order flow metrics, and trade secrets, preventing their exploitation for personal gain.

Management and Execution Protocols Upon detection of a potential or actual conflict:

1. 1. Assessment: The CCO immediately dictates the management strategy, confirming whether the conflict is potential or realized, and deploying technical or administrative blocks to isolate the risk.
   2. Monitoring: The CCO monitors the activities of the implicated Relevant Person until the risk is verifiably neutralized.
   3. Recusal Authority: The CCO may temporarily or permanently exclude any Employee from specific duties (e.g., managing a specific LP integration) due to a conflict.
      1. If the conflict implicates the CCO, the Management Board exercises this recusal authority.
      2. If the conflict implicates a Board member, the remaining unconflicted Board members enforce the recusal.

Chapter VIII: Disclosure of Conflicts of Interest (Measure of Last Resort)

Public Disclosure: The Company shall maintain a dedicated, permanent section on its public website outlining the general nature and sources of conflicts of interest inherent to its non-custodial operations, the potential risks to the Client, and the institutional measures employed to mitigate them.

Pre-Transaction Disclosure (Last Resort): If the organizational and administrative arrangements deployed by the Company are insufficient to guarantee, with reasonable certainty, that the risk of damage to the Client’s interests will be prevented, the Company must formally disclose the specific conflict to the Client prior to entering into an agreement or executing a transaction.

1. 1. This disclosure must clearly explain the nature and source of the conflict, the specific risk posed to the Client (e.g., routing bias), and the mitigation steps attempted.
   2. The disclosure must be recorded securely and enable the Client to make an informed, documented decision.

Refusal of Service: Where a conflict of interest cannot be avoided, managed, or properly disclosed in a manner that reduces the risk to an acceptable level, the Company must decline to provide the service or execute the transaction, formally informing the Client of the refusal.

Chapter IX: Personal Account Dealing (PAD) and Personal Transactions

• Definition of Personal Transactions in Crypto-Assets: A Personal Transaction constitutes any trade, swap, staking activity, or transaction resulting in a position or exposure to a crypto-asset, executed by or on behalf of a Relevant Person, where:
  1. The transaction falls outside their official corporate duties for Bleap SIA.
  2. The transaction is executed for their own account, their self-hosted wallet, or the account of a closely related party.
• Strict Prohibitions (Insider Trading and Front-Running) Relevant Persons with access to confidential information, aggregate API routing data, or unexecuted Client order flow are strictly prohibited from:
  1. Front-Running: Executing Personal Transactions based on confidential knowledge of impending Client volume or planned Company integrations.
  2. Tipping: Advising, soliciting, or inducing third parties to trade based on internal Company data.
  3. Self-Servicing: Utilizing Employee access privileges to service, modify, or approve transactions for their own wallets or accounts for which they hold a proxy.
• PAD Reporting and Pre-Approval Requirements
  1. Recognizing the non-custodial nature of the Company’s services and the prevalence of self-hosted wallets in the crypto-asset sector, the Company applies a targeted, risk-based approach to Personal Account Dealing (PAD) to prevent front-running and the misuse of confidential Client order flow.
  2. General Exemption for Unrelated Self-Hosted Activity: Employees executing Personal Transactions via self-hosted wallets on decentralized protocols (e.g., DEXs, lending protocols) that do not intersect with the Company’s supported assets, active API routing paths, or integrated Liquidity Providers are generally exempt from pre-clearance requirements, provided the transactions do not rely on confidential Company information.
• Absolute Prohibition on Front-Running: Regardless of transaction size or whether a self-hosted wallet is used, Relevant Persons are absolutely prohibited from executing Personal Transactions based on advanced knowledge of aggregate Client volume, backend routing logic, or unexecuted Client orders.
• The PAD Register: For transactions requiring pre-clearance, the CCO maintains an auditable log capturing the timestamp, volume, asset pair, and the explicit approval or denial granted. Employees are required to act in good faith and self-disclose applicable self-hosted wallet transactions that fall within the targeted pre-clearance scope.

Chapter X: Dual Hatting and Functional Independence

"Dual Hatting" refers to the practice of a single Relevant Person simultaneously holding two or more distinct operational, governance, or control roles within the Company or across the Company Group. While the principle of proportionality allows for operational efficiency, the Company strictly governs dual hatting to ensure it does not compromise the Segregation of Duties (SoD), impair independent oversight, or create inherent conflicts of interest.

1. 1. Prohibited Dual Hatting Configurations
      1. To maintain the integrity of the Company's Three Lines of Defense model and comply with EBA Internal Governance Guidelines, the following dual hatting configurations are strictly prohibited:
         1. Mixing First and Second/Third Lines: A Relevant Person cannot simultaneously hold a business-generating or operational execution role (First Line, e.g., Head of Business Development, API Routing Lead) and an independent control function (Second/Third Line, e.g., Compliance Officer, Chief Risk Officer, or Internal Auditor).
         2. Self-Oversight: A Relevant Person cannot hold a role where they are responsible for executing a process (e.g., executing manual fiat/crypto bridging operations) while simultaneously holding the mandate to audit or approve that exact process.
         3. Conflicting Management Board Mandates: A Management Board member holding the portfolio for commercial strategy and revenue generation cannot simultaneously serve as the designated AML Board Member or oversee the Compliance function.
   2. Permissible Dual Hatting (The Proportionality Principle)
      1. The Company acknowledges that, based on its size, organizational structure, and the non-custodial nature of its operations, certain non-conflicting dual roles may be permissible.
      2. Synergistic Control Roles: An individual may hold multiple control functions provided that both roles share an aligned mandate of risk mitigation and regulatory adherence, and neither role involves contradicting operational business generation.
      3. Group-Level Synergies: A Relevant Person may hold a role within Bleap SIA and a non-conflicting role within an affiliated entity of the Company Group, provided the dual allocation does not impair their capacity to commit sufficient time to Bleap SIA or compromise the independent best interests of Bleap SIA’s Clients.

Chapter XI: Remuneration Policy Neutrality

Conflict-Free Compensation Structures: The Management Board is responsible for enforcing a fair remuneration approach covering Employees, Board members, and outsourced personnel. Compensation frameworks (including fiat salaries, bonuses, and performance incentives) must never create financial incentives that encourage Relevant Persons to:

1. 1. Circumvent compliance, AML, or execution protocols.
   2. Favor their own interests or the Company's corporate revenue over the Client's best interests.
   3. Route Client transactions to specific liquidity providers or protocols strictly to maximize internal rebates or volume bonuses.

Variable Remuneration Controls Any variable remuneration or Key Performance Indicators (KPIs) must be heavily weighted with qualitative compliance metrics. Failure to adhere to this Procedure or the Company’s conflict mitigation frameworks will result in the forfeiture of variable compensation.

Chapter XII: Final Provisions

The Management Board, advised by the CCO, shall review this Procedure at least annually. Ad hoc reviews are mandatory following any material change in MiCA guidelines, EBA technical standards, or the technological architecture of Bleap SIA’s routing and API infrastructure.

This Procedure and any subsequent amendments become legally effective upon formal resolution by the Management Board.

The Company shall electronically distribute this Procedure to all Relevant Persons immediately upon implementation.

The CCO shall conduct mandatory, documented training for all Relevant Persons regarding the detection, escalation, and PAD reporting requirements outlined herein.