Prevention and management of conflicts of interest

BITCOINFORME, S.L.

Index:

• 1. SERVICES
• 2. DEFINITION OF CONFLICT OF INTEREST
• 3. SCENARIOS OF POTENTIAL CONFLICTS OF INTEREST
• 4. GENERAL GUIDELINES FOR ACTING ON CONFLICTS OF INTEREST
• 5. SPECIAL CONSIDERATIONS ARISING FROM THE PROVISION OF THE PLACEMENT SERVICE

BITCOINFORME, PSC, S.L. (hereinafter, “Bit2Me” or the “Entity”) is a crypto-asset service provider.

Bit2Me has adopted measures to detect, prevent, manage, and disclose conflicts of interest that may arise in the provision of any service related to crypto-assets or ancillary services, among the companies themselves or people directly or indirectly related to them, their clients, or between clients.

1. SERVICES

Bit2Me is authorized by the CNMV to provide the following crypto-asset services (hereinafter, the “Services”):

• Services and activities
• Custody and administration of crypto-assets on behalf of clients
• Exchange of crypto-assets for funds
• Exchange of crypto-assets for other crypto-assets
• Execution of orders related to crypto-assets on behalf of clients
• Placement of crypto-assets
• Reception and transmission of orders related to crypto-assets on behalf of clients
• Provision of crypto-asset transfer services on behalf of clients

On the occasion of the provision of the aforementioned Services, MiCA requires crypto-asset service providers to address conflicts of interest.

2. DEFINITION OF CONFLICT OF INTEREST

Conflicts of interest are those that may arise when providing the Services and whose existence may harm the interests of a client or of Bit2Me. For these purposes, a conflict of interest could imply harm either to the clients or to the Entity itself.  

3. SCENARIOS OF POTENTIAL CONFLICTS OF INTEREST

There are mainly three types of conflicts of interest, for which a non-exhaustive list of circumstances and relationships in which a conflict of interest could arise is included:

• Conflicts of interest between Bit2Me and its clients (first category).
  • Has an interest in the outcome of a service provided to the client or an operation carried out on behalf of the client, which is different from the client's interest in that outcome.
  • Has financial or other incentives to favor the interests of another client or group of clients over the interests of the client.
  • Carries out the same activity as the client.
  • Provides the placement service and intends to place the corresponding tokens among its own clients.

The obtaining of a benefit will not be considered sufficient if there is no possible harm to a client, or the possibility of obtaining a gain or avoiding a loss, if there is no concomitant possibility of a loss for a client. Likewise, it is not essential that the risk of harming one or more clients materializes, but rather the mere existence of a situation of possible harm.

• Conflicts of interest between individual clients or groups of clients of Bit2Me (second category).
  • When Bit2Me provides both exchange and placement services and intends to sell the relevant crypto-assets to its own clients.
  • When Bit2Me has more than one client interested in the outcome of a transaction.
  • When Bit2Me trades crypto-assets on its own account and, at the same time, executes orders on crypto-assets on behalf of clients or receives and transmits orders on crypto-assets on behalf of clients.
• Conflicts of interest that may prevent Bit2Me from exercising its functions and responsibilities objectively and independently, i.e., internal conflicts of interest (third category).
  • Has a financial interest in a person, body, or entity with interests in conflict with those of Bit2Me.
  • Has or has had, in at least the last three years, a relationship with a person, body, or entity with opposing interests to those of Bit2Me.

For the purpose of identifying persons, bodies, or entities with interests opposing those of Bit2Me, it will be taken into account, at a minimum, whether said person, body, or entity is in any of the following situations: 

• Is likely to obtain a financial gain or avoid a financial loss at the expense of Bit2Me;
• has an interest in the outcome of a crypto-asset service provided or an activity carried out or a decision made by Bit2Me, which is different from Bit2Me's interest in said outcome;
• carries out the same activity as Bit2Me or is a client, consultant, advisor, delegate, subcontractor, service provider, or other provider (including subcontractors) of Bit2Me and it can be reasonably estimated from objective circumstances that a conflict of interest may exist with Bit2Me.

For the purpose of identifying whether a person has any kind of financial interest in a third party with interests in conflict with those of Bit2Me, it will be taken into account, at least: 

• owns shares, tokens, or tokens (including governance tokens), other property rights, or membership in said person, body, or entity;
• owns debt instruments or has other debt agreements with that person, body, or entity;
• has some type of contractual agreement, such as management contracts, service contracts, delegation or outsourcing contracts, or intellectual property licenses, with that person, body, or entity. 

Notwithstanding the foregoing, in the event that conflicts of interest cannot be avoided, they will be resolved taking into account the guidelines for action on conflicts of interest.

4. GENERAL GUIDELINES FOR ACTING ON CONFLICTS OF INTEREST 

With the purpose and objective of identifying, preventing, managing, and controlling or, ultimately, disclosing the existence and nature of real or potential conflicts of interest, and so that all people involved and responsible for the process in question can make the corresponding decision, in accordance with the provisions established in the regulations, Bit2Me has adopted principles and measures of action to adequately manage conflicts of interest, among which stand out:

• Priority should be given to the legitimate interests of clients, and conflicts should be avoided and compliance with legal stipulations should be ensured by acting with the utmost diligence, loyalty, and neutrality, in order to ensure that any operation that presents conflicts of interest is carried out in the best interest of the clients.
• No privileges should be established in favor of any client when there is a conflict of interest between several of them.
• Internal procedures exist for the approval of products and services that include the need to analyze possible conflicts of interest and measures for preventing conflicts of interest in advertising communications that are made. 
• Intermediaries are selected according to objective and independent criteria.
• The affected persons will not carry out or promote any conduct that, by involving the improper use or transmission of privileged information or market manipulation, could constitute market abuse.
• The activity carried out by Bit2Me constitutes activities reserved for professionals who are part of Bit2Me in accordance with its own organizational structure. These activities are always carried out on behalf of Bit2Me, and the performance of other parallel activities or outside the entity's activities is prohibited.
• Employees whose main functions are the provision of services to clients and who have conflicting interests with each other or with Bit2Me will be supervised separately.
• The appearance of a conflict of interest can constitute a risk to Bit2Me's reputation, even if it turns out to be unfounded. Therefore, taking due account of proportionality, specific background, all relevant facts, and mitigating circumstances, a perceived risk of a conflict of interest must be treated as if it were a real conflict.

Bit2Me will act in accordance with the following general procedural principles:

1. Identification 

All possible actions will be carried out so that, in relation to the Services provided by Bit2Me, circumstances that give or may give rise to a conflict of interest and that involve a risk of harming the interests of one or more clients or of Bit2Me are identified.

2.  Prevention and mitigation

The effective occurrence of conflicts of interest will be sought to be avoided by establishing, to the extent possible, the guidelines and measures for the management of conflicts of interest that cannot be prevented, with the aim of avoiding harm to clients.

3. Resolution

Conflicts of interest will be resolved by the heads of the areas, their superiors, or the Compliance Department.

4. Disclosure

In those cases where the guidelines and measures established by Bit2Me to manage the conflict of interest and prevent the interests of its clients from being harmed are insufficient to guarantee, with reasonable certainty, that the risks of harm to the client's interests will be prevented, Bit2Me will proceed to disclose the nature and origin of the conflict to the affected clients prior to the provision of the Service or the conclusion of an operation, as well as the measures adopted to mitigate the risk of harm to the client. Bit2Me will obtain, if it deems it appropriate, the prior express consent of the affected clients, once they have been informed of the existence of the conflict.

The disclosure of conflicts of interest to clients should be considered, in any case, a measure of last resort, applicable only in the event that the measures established by Bit2Me to prevent or manage conflicts of interest were not sufficient to guarantee, with reasonable certainty, the prevention of possible harm to the client's interests.

The excessive use of the disclosure of conflicts of interest is considered a deficiency in the management of conflicts of interest by Bit2Me.

5. SPECIAL CONSIDERATIONS ARISING FROM THE PROVISION OF THE PLACEMENT SERVICE

For the purpose of identifying potential conflicts of interest that arise from the provision of the placement service, Bit2Me will take into account, without prejudice to the provisions of the regulations, at least the following situations (when applicable):

• Bit2Me also offers exchange services in relation to the offering of crypto-assets.
• Bit2Me also provides crypto-asset order execution services on behalf of clients and analysis services.
• Bit2Me places crypto-assets for which it or a Group entity is the issuer.

In this context, Bit2Me will apply and maintain internal provisions to ensure at least the following: 

• That the offer price does not promote the interests of other clients, the issuing client, or Bit2Me's own interests, in a way that could conflict with the interests of the issuing client or with the interests of other clients.
• The prevention of a situation in which the persons responsible for providing services to Bit2Me's investor clients, or for deciding which products should be included in the list of products offered or recommended by Bit2Me, participate directly in the decisions on pricing to the issuing client.
• The prevention of any type of recommendations, either at the request of the client or on the initiative of Bit2Me, directly or indirectly, about the placement due to inappropriate influence from any existing or future relationship.