SUMMARY OF CUSTODY POLICY

Created: 14.7.2025

General

This document provides an overview of Kvarn Capital Ltd’s (“Kvarn”) crypto-asset custody policy. Kvarn offers its clients crypto-asset custody and administration services, adhering to practices in accordance with the MiCA Regulation (2023/1114) and other applicable industry standards.

Custody and administration of crypto-assets

Clients' crypto-assets are held at separate addresses reserved for customer funds, which ensures they are completely segregated from Kvarn's own assets. All client positions are recorded and maintained in a separate system, which serves as Kvarn’s main bookkeeping system. This arrangement ensures that client-specific information and transactions remain up-to-date, while all crypto-assets are always safeguarded in segregated addresses.

The system is designed so that positions cannot be mixed or remain unsegregated on a client-specific basis. Real-time transaction reconciliations ensure that each order is always allocated to a specific client's account with a unique number without delays. Additionally, daily reconciliation with the client management system ensures that the custody of crypto-assets is accurate and up-to-date.

In accordance with Kvarn's information security policy, only authorized personnel have access to the client management system and the systems used for the custody of crypto-assets. For every transfer of crypto-assets, more than one person is required to execute the transaction in order to reduce the possibility of misuse.

Custody of fiat funds

The clients’ fiat funds are also held in segregated client funds accounts as are the crypto-assets. Otherwise in the custody of clients’ fiat funds, we apply similar safeguards and technical solutions as in the administration of crypto-assets to ensure the segregation and up-to-date status of client funds.

Fiat funds are recorded on client-specific accounts either via an API connection or by file import. Our daily reconciliation process compares the balances in client fund accounts with the balances in the position register, thereby ensuring accuracy.

Agreements and liabilities

Kvarn enters into terms of service conforming to the requirements of the MiCA Regulation with its clients, which define the terms for the custody and administration of crypto-assets. A position register is maintained for each client, containing information on the quantity and value of their crypto-assets in euros. The position register is provided to clients automatically every three months or always upon request. This ensures that clients always have up-to-date information on their assets in Kvarn's service. Kvarn bears responsibility for any complete loss of crypto-assets resulting from failures in Kvarn’s operations.