Virtual Assets Standards – First Crypto

1. Policy Statement

First Crypto ("the Company/Firm", "We" and "Our") maintains a structured and disciplined approach to overseeing the quality and integrity of all Virtual Assets (VAs) offered on its trading platform. As a licensed provider of VA Broker-Dealer services, the Company adheres to the regulatory expectations set forth by the Dubai Virtual Assets Regulatory Authority (VARA) and ensures that only VAs meeting robust eligibility standards are approved for listing and continued operation.

Applicability

This policy governs the full lifecycle of all Virtual Assets admitted for trading, custody, or other VA-related services facilitated by First Crypto. It encompasses the evaluation, approval, ongoing review, and de-listing protocols tied to VA Standards. The objective is to maintain the integrity, transparency, and compliance of First Crypto's VA offerings throughout their operational lifespan. The requirements laid out in this policy are binding across all departments involved in VA assessment, listing, due diligence, and risk oversight, and serve as a cornerstone in ensuring that every Virtual Asset aligns with applicable regulatory and internal quality benchmarks.

Ownership structure and influence of interested parties

First Crypto will conduct a thorough investigation of the ownership structure of a virtual asset to ensure that no internal or external parties with significant influence over the company can use this position to manipulate or gain unfair advantage from trading. This process also includes assessing the degree of influence of stakeholders and their role in the management of the company.

Jurisdictional screening

The Firm will conduct jurisdictional screening to determine whether the assets or activities related to them are prohibited or subject to active regulatory investigation or enforcement. If any material prohibition is identified, the relevant virtual asset must be delisted or immediately suspended pending a formal internal review. Prohibition compliance checks are conducted both prior to the listing of a virtual asset and throughout the period during which it is supported.

Regulatory compliance assessment

The Company must conduct a rigorous and ongoing verification process to ensure that each virtual asset supported on the crypto broker's platform complies with the Company's established standards for virtual assets. This assessment includes both an initial assessment and subsequent verification as necessary.

2. Due Diligence and Transparency of Virtual Asset Standards

The Company exercises a rigorous and continuous due diligence process to ensure that every Virtual Asset supported on its platform consistently meets the Company's established Virtual Asset Standards. This obligation applies not only at the time of initial assessment but also throughout the duration of any Virtual Asset-related activity carried out by First Crypto. As part of its commitment to operational transparency and regulatory alignment, First Crypto publicly discloses its VA Standards on its official website. This ensures that all stakeholders—including clients, counterparties, and regulators—have clear visibility into the principles and benchmarks guiding the selection and monitoring of Virtual Assets listed on the platform.

First Crypto employs a structured evaluation framework to determine the eligibility and ongoing viability of Virtual Assets supported on its platform. As part of this framework, the Company conducts an in-depth analysis of the asset's market performance and financial fundamentals, focusing on the following key areas:

Market Capitalization:

The relative market size of each asset is reviewed using independent data sources such as CoinMarketCap or equivalent platforms to ensure the asset maintains a meaningful and sustainable presence in the market.

Fully Diluted Value (FDV):

The Company examines the FDV of each token to assess its valuation under maximum token supply conditions, allowing for an informed understanding of potential dilution effects on the market and investors.

Liquidity:

• Trading volumes and bid-ask spreads are scrutinized to evaluate whether a Virtual Asset has sufficient liquidity to support efficient market activity without introducing undue volatility or slippage.
• To detect negative performance trends, historical data is collected and analyzed using statistical methodologies, including the use of moving averages and trend lines plotted over time. This comparative analysis helps First Crypto determine whether there has been a consistent decline in any of the above metrics. Visual documentation, including graphs and summaries, is prepared to support internal review and decision-making.

As part of First Crypto's proactive risk mitigation approach, these metrics are subject to scheduled reassessments. If a Virtual Asset shows a deteriorating trend, it may trigger an escalation protocol for reassessment or suspension of related activities on the platform.

2.1 Issuer Background and Integrity Evaluation

The Company thoroughly examines the background of each Virtual Asset's issuer to assess their credibility and suitability for listing and trading on our platform. This evaluation ensures that all listed assets meet the highest standards of integrity, reducing the risk of fraud or deceit.

Issuer Performance Assessment

The Company must thoroughly review the background of each virtual asset issuer to assess its reliability and suitability for listing and trading on the crypto broker's platform. This assessment includes the following key aspects:

• Issuer's experience and track record: The Firm should analyze the issuer's previous involvement in the virtual asset sector, including its history of managing and developing similar assets.
• Regulatory position: The company should assess whether the issuer has been subject to any investigations by regulatory authorities or enforcement actions, particularly those related to fraud, deception, or other unethical activities.
• Reputation and trustworthiness: First Crypto should consider feedback from industry peers, analysts, and other interested parties to determine the level of trust in the issuer in the virtual asset space.

Step 2: Financial stability review

The crypto broker should analyze the project's key financial indicators to assess its stability. This can be done by:

• Assessing the market capitalization of the virtual asset.
• Analysis of the fully diluted value (FDV) of the asset to understand its growth potential.
• Study of the asset's liquidity to determine the level of investor interest and trading opportunities.

Step 3: Regulatory compliance and standards check

A crypto broker must ensure that the virtual asset complies with all legal and regulatory requirements. This includes:

• Verifying compliance with anti-money laundering (AML) and counter-terrorist financing (CFT) regulations.
• Assessing compliance with sanctions laws.
• Analyzing risks associated with the jurisdiction in which the project is registered.

Step 4: Security and technical review

The crypto broker's IT team should evaluate the security features and historical incidents associated with the Distributed Ledger Technology (DLT) protocol underlying the asset. This can be done by:

• Project code analysis for vulnerabilities or errors.
• Verification of the reliability and security of the infrastructure used to support the asset.
• Assessment of potential cybersecurity risks.

Step 5: Platform potential assessment

The crypto broker's listing team should assess the ability of its platform to support the proposed virtual asset. This can be done by:

• Analyzing internal controls to ensure that proper risk management and regulatory compliance processes are in place.
• System performance assessment to ensure that the integration and operation of the asset will not impact the platform's performance. Analysis of the reliability of the technology underlying the platform to ensure that it can withstand traffic and load growth after the asset is listed.

3.3 Continuous monitoring

The crypto broker must maintain a system for continuously monitoring virtual assets to ensure that they continue to meet the crypto broker's standards. This process includes monthly reports on asset performance and compliance, as well as immediate escalation of any significant issues arising with an asset.

Conclusion

This document establishes standards of conduct for crypto brokers that ensure compliance with the highest regulatory requirements and provide transparency, fairness, and trust for clients and stakeholders. The crypto broker must follow all due diligence procedures described in this document to ensure regulatory compliance and maintain a high level of service quality on the crypto broker platform.

Compliance with these rules and standards will help the crypto broker maintain its reputation as a reliable partner that meets the highest standards of fairness, transparency, and regulatory compliance. This will strengthen the trust of clients and stakeholders in the activities of the crypto broker.

The assessment includes the following key aspects:

• Issuer's Experience and Track Record: First Crypto evaluates the issuer's prior involvement in the Virtual Asset sector, including their history of managing and developing similar assets. This helps to ensure that the issuer possesses the necessary expertise and experience to support the continued development and security of the asset.
• Regulatory Standing: We assess whether the issuer has been subject to any regulatory investigations or enforcement actions, particularly those related to fraud, deceit, or other unethical activities. Any past legal or regulatory issues are carefully reviewed to determine their potential impact on the integrity and trustworthiness of the asset.

Reputation and Trustworthiness: The reputation of the issuer is also a critical factor in our evaluation. First Crypto considers feedback from industry peers, analysts, and other stakeholders to determine the level of trust placed in the issuer within the Virtual Asset space.

This can be done by:

• Analyzing comments on forums and social media platforms dedicated to virtual assets.
• Reviewing expert opinions on the issuer's project.
• Assessing the overall market perception of the project.
• Multi-stage comprehensive review

Step 1: Identification and initial assessment

The crypto broker's business team should identify potential virtual assets for inclusion in the listing and conduct a comprehensive assessment of each one. The following steps can be used for this purpose:

• Evaluate the project's concept, objectives, and unique characteristics.
• Study the project's white paper and compare it with current developments.
• Analyze the market in which the project will operate and potential competitors.

Ongoing Monitoring:

• To maintain a high standard of integrity, First Crypto continues to monitor the issuer's activities throughout the life cycle of the asset. Any new findings or developments that may affect the issuer's reliability are promptly reviewed and can result in the suspension or delisting of the asset if necessary.
• Through this comprehensive review process, the Company ensures that all assets listed on our platform are backed by reputable issuers, minimizing the risk of fraud and maximizing the safety and trust of our users.

2.2 Multi-Step Due Diligence

At First Crypto, we implement a rigorous and multi-step due diligence process to evaluate the viability, compliance, and security of Virtual Assets before listing them on our platform. This process ensures that all Virtual Assets meet the necessary standards for market participation, regulatory compliance, and operational integrity.

Key Steps in the Due Diligence Process:

Identification and Initial Assessment:

The Business Team identifies potential Virtual Assets for listing and begins a comprehensive evaluation process. This includes examining the asset's use case to gauge its viability, as well as assessing market demand to ensure its long-term potential in the digital asset ecosystem.

Financial Stability Review:

The Business Team further assesses critical financial metrics such as market capitalization, fully diluted value (FDV), and liquidity. These metrics are scrutinized to evaluate the asset's financial stability, ensuring that it can withstand market fluctuations and provide a secure investment environment for users.

Regulatory and Compliance Check:

We ensure that the asset complies with all legal and regulatory requirements, including Anti-Money Laundering (AML), Counter Financing of Terrorism (CFT) regulations, and sanctions laws. This helps safeguard the integrity of our platform and ensures we adhere to the highest standards of regulatory compliance.

Security and Technical Review:

First Crypto's IT Team evaluates the security features and the historical incidents of the Distributed Ledger Technology (DLT) protocol that underpins the asset. This includes reviewing past vulnerabilities, incident reports, and current security measures to verify that the asset's underlying technology is secure and reliable.

Platform Capacity Evaluation:

The Listing Team assesses the platform's ability to support the proposed Virtual Asset, focusing on internal controls, system efficiency, and technology reliability. This ensures that our platform can efficiently handle the asset's integration and operation without compromising system performance or user experience.

Smart Contract Verification (if applicable):

If the Virtual Asset is based on smart contracts, the IT Team reviews any third-party audits to verify the reliability of the code. If necessary, an independent auditor is engaged to ensure that the smart contracts adhere to security best practices and industry standards.

Approval and Listing:

Once all assessments are completed, the proposal is submitted to the Virtual Asset Standards Committee (VASC) for review. The Committee evaluates the findings and, if applicable, approves the listing. Following VASC approval, the asset is submitted to VARA for regulatory review. Upon receiving approval from VARA, the asset is officially listed on First Crypto's platform.

Ongoing Monitoring and Reporting:

After listing, First Crypto maintains a system of continuous monitoring of Virtual Assets to ensure they remain compliant with VA Standards. This includes:

• Monthly reports on asset performance and compliance.
• Immediate escalation for any significant issues that arise with the asset.

If a Virtual Asset no longer meets First Crypto's VA Standards, we take prompt action to ensure compliance with regulatory obligations. These actions include:

• Notification to VARA: Informing the relevant authorities of the asset's status.
• User Notification: Notifying users and providing them with a grace period to liquidate or withdraw their assets.
• Post-Delisting Review: Conducting an internal review to assess the cause of non-compliance and implementing corrective measures.

Key Actions in the Due Diligence Process:

• Platform and Compatibility Evaluation: Ensuring the asset aligns with internal controls, system efficiency, and monitoring capabilities.
• Smart Contract Review (if applicable): Verifying the integrity and security of third-party audits.
• Ongoing Monitoring and Escalation: Ensuring continuous monitoring, monthly reporting, and immediate escalation of any significant issues.

3. Technical Architecture, Design and Functional Purpose Assessment

As part of its due diligence framework, First Crypto performs a thorough technical and functional assessment of each Virtual Asset prior to onboarding and throughout its lifecycle on the platform. This includes a structured review of the asset's documentation and technological foundation to determine its legitimacy, utility, and alignment with industry expectations.

Whitepaper and Project Documentation:

First Crypto examines the official whitepaper and other technical documents to understand the project's stated objectives, value proposition, governance models, and security protocols. This provides insight into the asset's foundational integrity and long-term viability.

Technical Infrastructure:

The asset's underlying architecture is evaluated, including its consensus algorithm (e.g., Proof-of-Work, Proof-of-Stake, or variants), scalability mechanisms, and the presence of any unique protocols or optimizations. Interoperability with other networks and platforms is also considered to gauge ecosystem compatibility.

Use Case Validation:

The Company reviews whether the asset's actual usage in the market aligns with its stated use cases. This involves analyzing on-chain activity, ecosystem adoption, and third-party integrations to ensure the token fulfills a meaningful function beyond speculative trading. This ongoing review process helps First Crypto ensure that only technically sound and practically applicable Virtual Assets are made available for client engagement and VA Activities. Any deviations between declared functionality and observed performance may result in further scrutiny or corrective action.

4. Regulatory Compatibility and Compliance Risk Assessment

First Crypto conducts a comprehensive legal and regulatory analysis of each Virtual Asset under consideration, with a focus on identifying features that may influence the firm's ability to comply with applicable laws and regulatory obligations.

As part of this process:

Legal and Technical Review:

The Virtual Asset's whitepaper, smart contract code, and technical specifications are scrutinized to uncover any embedded characteristics that may pose compliance risks—particularly in relation to anti-money laundering (AML), counter-terrorism financing (CFT), economic sanctions, securities regulations, and intellectual property rights.

Cross-Referencing Regulatory Frameworks:

Findings are evaluated against prevailing laws, rules, and regulatory directives, including those issued by VARA, UAE authorities, and other applicable jurisdictions. Where necessary, First Crypto engages internal legal advisors and external compliance experts to interpret complex or ambiguous areas.

Risk Documentation and Mitigation:

Identified risks are documented in a structured compliance risk report, which includes analysis, classification of risk severity, and specific recommendations for controls or mitigations. This report forms part of the approval process for listing or continuing VA Activities in relation to the asset.

Ongoing Monitoring:

• First Crypto implements a dynamic compliance monitoring process to track changes in the Virtual Asset's structure, protocol, or regulatory status. Updates that may impact the Company's compliance posture are immediately flagged for review and may trigger reassessment of the asset's listing status.
• This rigorous approach ensures that First Crypto remains in full adherence to all relevant regulatory frameworks while enabling responsible innovation and market participation.

4.1 Assessment of Regulatory Recognition and Classification

As part of its Virtual Asset Standards evaluation, First Crypto conducts a thorough assessment of the regulatory standing of each asset. This includes reviewing determinations, guidance, or approvals issued by VARA as well as by competent authorities in other relevant jurisdictions. Key areas of focus include:

Recognition by VARA:

Verification of whether the Virtual Asset has been subject to review or classification by the Virtual Assets Regulatory Authority (VARA), including any formal approvals, exemptions, or regulatory commentary relevant to its issuance or use within the Emirate of Dubai.

Global Regulatory Positioning:

Evaluation of how the asset is treated by foreign regulators, particularly in key markets. This includes checking for licensing status, classification as a security or commodity, and any public enforcement or advisory actions.

Issuer Compliance History:

• First Crypto also considers the track record of the issuing entity in terms of regulatory compliance and prior engagements with relevant authorities.
• The outcome of this regulatory due diligence directly informs the eligibility of a Virtual Asset for listing and ongoing activities on First Crypto's platform. Assets lacking sufficient clarity or exhibiting adverse regulatory treatment may be escalated for further review or excluded from the listing process.

4.2 Prohibited Status Across Jurisdictions

Before listing or engaging in any activity related to a Virtual Asset, First Crypto verifies whether the asset is subject to any form of prohibition, restriction, or regulatory ban. This includes a comprehensive legal review across all jurisdictions where First Crypto intends to operate or offer Virtual Asset services. As part of this process:

Regulatory Prohibitions:

First Crypto confirms that the asset is not explicitly or implicitly prohibited by the VARA or by any other competent authority, whether within the UAE or in foreign jurisdictions where services are rendered.

Cross-Border Analysis:

• The compliance team conducts a jurisdictional scan to assess whether the asset—or activities involving the asset—are banned, restricted, or under active regulatory investigation or enforcement. Listing Eligibility Impact: Should any material prohibition be identified, the Virtual Asset in question will be excluded from listing or immediately suspended if already active, pending a formal internal review.
• This prohibition screening is conducted both prior to onboarding and on an ongoing basis to ensure continued compliance with applicable international regulatory frameworks.

4.3 Enforceability of Rights Represented by Virtual Assets

The Company carefully evaluates the enforceability of any rights that a Virtual Asset may represent, ensuring that such rights are legally sound and can be appropriately exercised within the relevant jurisdictions. Key considerations include:

Legal Framework for Asset Rights:

First Crypto ensures that any rights associated with a Virtual Asset—whether ownership, governance, or claims to underlying assets—are clearly defined within the legal framework. This includes assessing whether the asset's structure provides clear, enforceable rights to holders, which are supported by applicable laws and regulations.

Jurisdictional Legitimacy:

The enforceability of rights related to a Virtual Asset is evaluated across relevant jurisdictions where First Crypto operates. We review the compatibility of asset rights with local laws to ensure that holders can exercise their rights effectively and legally, regardless of the asset's geographical origin or the jurisdiction in which it is held.

Issuer's Obligations and Governance:

First Crypto examines the obligations of the issuer or developers of the Virtual Asset to uphold the rights represented by the asset. This includes reviewing the terms and conditions surrounding the rights, as well as the governance mechanisms in place to ensure these rights are honored.

Risk of Ambiguity:

• In cases where rights associated with the Virtual Asset are unclear or difficult to enforce, First Crypto assesses the potential risks and determines whether additional safeguards or clarifications are necessary before allowing the asset to be listed. This is to ensure that users are not exposed to undue risk or uncertainty in exercising their rights.
• By rigorously analyzing the enforceability of asset rights, First Crypto ensures that Virtual Assets listed on our platform are legally sound, transparent, and reliable for all users, reducing the potential for legal disputes and promoting a secure trading environment.

5. Assessment of Underlying DLT Protocol Integrity

First Crypto conducts a thorough evaluation of the Distributed Ledger Technology (DLT) that underpins each Virtual Asset considered for listing or ongoing support. This assessment focuses on verifying the robustness, security, and immutability of the protocol to ensure it meets the firm's risk tolerance and operational standards. Key elements of this evaluation include:

Protocol Architecture Review:

An in-depth analysis of the DLT's structural design, including consensus mechanisms, governance models, and decentralization levels, is performed to understand the system's inherent resilience.

Security Controls:

First Crypto examines whether the DLT has a history of vulnerabilities, exploits, or successful cyberattacks. Additional scrutiny is applied to the protocol's defense mechanisms against double-spending, 51% attacks, and other potential threats.

Immutability of Records:

The ability of the DLT to guarantee that transaction records cannot be altered retroactively is assessed, with particular attention to how consensus rules are enforced and the extent of any protocol flexibility.

Ongoing Monitoring:

• After onboarding, the DLT's performance, upgrade history, and any structural or security changes are continuously tracked to ensure that the integrity and immutability of the network remain uncompromised.
• This evaluation helps ensure that only Virtual Assets backed by secure and technically sound infrastructures are supported on First Crypto's platform.

5.1 Assessment of Future Development Plans

As part of its due diligence process, First Crypto incorporates an evaluation of the ongoing and future development trajectory of each Virtual Asset. This includes an appraisal of development roadmaps and any public commitments made by the asset's issuer or core development team. The assessment includes the following considerations:

Roadmap Credibility:

First Crypto reviews published development plans to determine whether milestones are clearly defined, realistic, and consistent with the project's technical and business objectives.

Transparency of Progress:

The level of public disclosure regarding development updates is assessed. This includes evaluating official channels such as Git repositories, social media updates, community announcements, and developer documentation.

Developer Commitment and Resources:

An analysis of the experience, activity level, and continuity of the development team is conducted to gauge the capacity to execute the roadmap.

Impact on VA Activities:

Any anticipated changes or upgrades outlined in the development roadmap are analysed in terms of their potential effect on First Crypto's VA Activities and compliance obligations.

6. Evaluation of Market Integrity and Manipulation Risks

First Crypto carefully assesses each Virtual Asset for vulnerabilities that may render it prone to price manipulation. This evaluation is a critical component of the asset listing process and aims to safeguard market integrity and investor protection. Key factors considered in this assessment include:

Trading Volume and Market Depth:

First Crypto reviews the asset's historical and current trading data across major exchanges to determine the depth and liquidity of the market. Assets with low liquidity or concentrated ownership may be flagged as higher risk.

Concentration of Holdings:

The distribution of token supply is analysed to identify any outsized control by a small group of wallets or entities that could influence price movements.

Listing Venue Diversity:

The number and reputation of exchanges where the asset is listed are considered, as a lack of credible trading venues may increase the risk of manipulation.

Mitigation Measures:

• Where potential manipulation risks are identified, First Crypto implements relevant safeguards, which may include enhanced surveillance, tighter listing requirements, or restrictions on trading activities. Ongoing monitoring and collaboration with market surveillance partners are also employed.
• By conducting this rigorous analysis, the Company ensures that only assets with adequate market fairness, transparency, and resilience to manipulation risks are maintained on its platform.

7. Conflict of Interest Considerations in Virtual Asset Activities

At First Crypto, we proactively identify and assess any potential or actual conflicts of interest that may arise when offering VA Broker-Dealer Activity related to specific assets. This thorough review ensures that our operations maintain the highest standards of fairness, transparency, and regulatory compliance, fostering trust with clients and stakeholders. Key factors evaluated during this process include:

Ownership and Stakeholder Influence:

We review the ownership structure of the Virtual Asset to ensure that no internal or external parties with a significant influence over First Crypto could use that position to manipulate or unfairly benefit from the asset's trading or listing.

Third-Party Relationships:

First Crypto evaluates any existing relationships with issuers, developers, or other third parties that may introduce conflicts of interest in decision-making processes regarding VA Activities. This assessment includes reviewing financial ties, advisory roles, and shared interests.

Operational Transparency:

We ensure that all relevant policies and procedures are in place to prevent conflicts of interest, such as disclosing any relationships that could influence decision-making, and ensuring unbiased treatment of all assets listed on the platform.

Mitigation Measures:

• When conflicts of interest are identified, First Crypto implements targeted measures to eliminate or minimize their impact. These may include enhanced transparency, independent oversight, and segregation of duties to maintain impartiality in operations.
• By addressing these concerns, the Company ensures that all VA Activities are conducted in a fair, transparent, and compliant manner, prioritizing the interests of our clients while upholding the integrity of the platform.

8. Sufficiency of Assets to Satisfy Obligations in Virtual Asset Activities

First Crypto ensures that sufficient assets are available to meet all obligations arising from its VA Broker-Dealer Activity, safeguarding the interests of its users, stakeholders, and regulatory compliance.

Key considerations include:

Asset Reserves and Liquidity:

First Crypto maintains adequate reserves and liquid assets to cover all potential liabilities associated with VA Activities. This includes ensuring that assets held are of sufficient value to fulfill any obligations, such as transaction settlements, user withdrawals, and any regulatory capital requirements.

Risk Management Framework:

As part of our risk management framework, we conduct thorough assessments to evaluate whether the available assets are sufficient to address foreseeable financial obligations under varying market conditions. This is done by implementing stress tests and scenario analyses to anticipate potential risks to asset sufficiency, particularly in volatile market conditions.

Regulatory Compliance and Reporting:

The Company ensures that all regulatory obligations related to asset sufficiency are met, including reporting requirements from relevant authorities. We comply with applicable laws and regulations governing asset backing, liquidity requirements, and capital adequacy, ensuring that we can fulfill our duties in relation to VA Activities.

Ongoing Monitoring and Auditing:

To maintain ongoing sufficiency of assets, First Crypto continuously monitors its asset holdings and obligations. We implement regular audits, both internal and external, to verify that the assets on hand remain sufficient to meet current and future obligations. Any discrepancies or risks identified during these audits are promptly addressed to prevent shortfalls.

Contingency Plans:

• In situations where asset sufficiency could be compromised, First Crypto has established contingency plans. These plans include measures such as accessing additional capital, liquidating non-essential assets, or engaging in strategic partnerships to ensure the necessary liquidity and asset backing.
• By ensuring sufficient assets are available, First Crypto mitigates risks, enhances operational stability, and strengthens confidence in our VA Activities, enabling users to engage in transactions with peace of mind.

8.1 Alignment of Virtual Asset Terms with Underlying Physical Market Operations

The Company takes proactive steps to ensure that the terms and conditions governing VAs listed on our platform are aligned with the operations of any relevant underlying physical markets, where applicable. This ensures that our VA Activities do not disrupt or negatively impact these markets while maintaining the integrity and transparency of the virtual asset ecosystem. Key measures include:

Market Analysis and Alignment:

Before listing any Virtual Asset, First Crypto assesses the relationship between the virtual asset and any corresponding physical markets it may be tied to. This includes evaluating the pricing mechanisms, liquidity flows, and trading practices in the physical market to ensure our VA platform reflects these dynamics where possible.

Integration of Physical Market Terms:

First Crypto ensures that the terms and conditions of virtual asset trading, including trading fees, settlement processes, and transaction protocols, are consistent with the operational norms of the physical markets. This minimizes potential conflicts or disruptions that could arise from discrepancies between virtual and physical asset terms.

Avoidance of Market Disruption:

We work diligently to avoid any adverse impact on physical markets. This includes carefully managing volatility, preventing price manipulation, and ensuring that our VA Activities do not create artificial or misleading market conditions that could harm the integrity of the physical market. Regulatory and Industry Consultation: In instances where the virtual asset is linked to an underlying physical market, First Crypto engages with regulators and industry experts to ensure compliance with relevant market rules and standards. This may involve seeking advice or approval from regulatory bodies, including VARA, to ensure that all operations are in line with the broader market framework.

Continuous Monitoring and Adjustment:

• First Crypto monitors market conditions regularly, adjusting terms and conditions as needed to maintain harmony between the virtual asset market and any associated physical market. This includes adapting our strategies to accommodate evolving market trends, regulatory requirements, and the needs of both the virtual and physical asset communities.
• By ensuring that the terms governing our Virtual Assets are consistent with underlying physical markets, First Crypto fosters a fair, transparent, and stable environment for all stakeholders involved.

8.2 Periodic Review of Virtual Asset Terms in Relation to Physical Market Standards

The Company is committed to regularly reviewing the terms and conditions associated with all VAs listed on our platform to ensure they remain in alignment with the standards and practices of any relevant physical markets, where applicable. This review process helps ensure that the terms governing virtual asset transactions continue to reflect the operational realities of the corresponding physical markets, if any, and uphold the integrity of both markets. Key measures include:

Regular Review Cycle:

First Crypto implements a structured and periodic review process to assess the consistency between the terms and conditions of our Virtual Assets and the operations of any corresponding physical markets. This review occurs at scheduled intervals and is informed by current market dynamics and industry trends.

Market Practices Alignment:

During the review, we assess whether our VA terms and conditions continue to reflect the established practices in the physical market. This includes ensuring that trading conditions, such as pricing mechanisms, liquidity parameters, and settlement procedures, align with the norms and expectations of the physical market to avoid inconsistencies.

Updating Terms and Conditions:

If any discrepancies or misalignments are identified between the Virtual Asset terms and the physical market, First Crypto makes the necessary adjustments. This could involve revising trading protocols, adjusting fees, or implementing new compliance measures to maintain harmony between both markets.

Collaboration with Market Experts:

We collaborate with industry specialists, regulators, and physical market stakeholders to ensure our terms and conditions are aligned with the latest market developments and regulatory expectations. This consultation helps us maintain a responsive and responsible approach to the evolving virtual asset landscape.

Regulatory Compliance Assurance:

• As part of the periodic review, First Crypto ensures that the updated terms and conditions adhere to relevant regulations, including those set by VARA and other pertinent authorities. This ensures that our platform operates in full compliance with applicable laws and industry standards.
• Through these regular reviews, First Crypto ensures that our Virtual Assets and their associated terms are consistently aligned with the requirements of the physical market, promoting stability, fairness, and regulatory compliance.

9. Operational Oversight and Management

The Company conducts regular assessments to ensure that the Virtual Assets listed on our platform continue to meet the established VA Standards. These assessments help us to stay informed of any changes that might affect the asset's viability, compliance, or security. All records associated with these evaluations are retained for a period of eight years and are made available to VARA upon request for inspection.

Conditions for Suspension of VA Activities

First Crypto outlines specific conditions under which VA Activities may be suspended for a particular Virtual Asset. These conditions include, but are not limited to, the following:

• Non-compliance with the VA Standards.
• A sustained decline in market capitalization, fully diluted value, or liquidity over a 30-day period.
• The introduction of new laws, regulations, or regulatory notices that significantly affect compliance.
• Issuance of prohibition notices from VARA or any other relevant regulatory authority.
• Discovery of significant security vulnerabilities or breaches within the asset's Distributed Ledger Technology (DLT) protocol.
• Updates or changes to the Virtual Asset's underlying technology that result in non-compliance with First Crypto's blockchain monitoring systems.
• Adverse news implicating the Issuer in fraud, deceit, or other illegal activities.
• Significant changes to the Issuer's background that undermine the credibility of the Virtual Asset.
• Material changes to the asset's terms and conditions, particularly if these changes impact its correlation with physical markets (where applicable).
• A lack of sufficient assets to fulfill obligations related to VA Activities.

Upon meeting any of these conditions, First Crypto takes immediate action. This includes:

• Notifying VARA promptly about the non-compliance or identified risk.
• Conducting an internal review of the asset's status.
• If necessary, suspending the VA Activities associated with the affected Virtual Asset.
• Communicating with users through official channels to inform them about the suspension, providing the reasons, expected duration, and any required actions.
• Implementing measures to minimize the adverse impact on users.
• Providing a grace period of 30 to 90 days for users to liquidate or withdraw their holdings if the asset is delisted.
• Conducting a post-suspension review to evaluate the process and identify areas for improvement.
• Notification and Response to Non-Compliance

In the event that a Virtual Asset no longer meets the VA Standards, First Crypto will notify VARA without delay. Following this notification, we will take appropriate measures as directed by VARA to mitigate any adverse impacts on our clients. These actions may include:

• Temporarily suspending trading of the affected asset.
• Communicating with clients through official channels, providing clear guidance on the steps they need to take.
• VARA's Right to Suspend VA Activities

VARA retains the right to require the suspension of any VA Activity related to a Virtual Asset, provided that there are reasonable grounds for such a suspension. First Crypto will cooperate fully with VARA in any situation requiring such action.

10. Policy Review and Continuous Improvement

To ensure the continued relevance and effectiveness of its VA Standards Policy, First Crypto conducts a comprehensive review at least once every calendar year. This review process is aimed at aligning the policy with evolving market dynamics, regulatory developments, and industry best practices governing Virtual Assets.

The Compliance Officer leads this initiative, overseeing the evaluation of existing standards and coordinating updates where necessary. Any modifications—whether due to changes in regulatory expectations, emerging risks, or technological advancements—are formally approved, recorded, and implemented.

Following final approval, all revisions are made publicly accessible through First Crypto's official website, ensuring transparency for users, stakeholders, and regulators alike.