STIX OTC FZE | VIRTUAL ASSETS LISTING STANDARDS

DOCUMENT TITLE	PUBLISHED	REVIEWED	APPROVED (COMPLIANCE OFFICER)	APPROVED (CEO)
VIRTUAL ASSETS LISTING STANDARDS	24/09/2024	25/09/2024	20/09/2024	21/09/2024

VIRTUAL ASSETS LISTING STANDARDS

1. These virtual assets listing standards, including any and all schedules (the “Listing Standards”), have been prepared by STIX OTC FZE (“STIX”, or the “Company”, “We”, or “Us”) as a provider of Broker-Dealer and Advisory Services (“Services”) in relation to the virtual assets listed in Schedule 1 (“Listed Virtual Assets”). 

2. STIX is regulated by the Virtual Assets Regulatory Authority (“VARA”) and these Listing Standards have been prepared in compliance with the regulatory framework of the Virtual Assets Regulatory Authority (“VARA”), including, inter alia, the Virtual Assets and Related Activities Regulations 2023 (the “VARA Regulations”), and the accompanying rulebooks (“Rulebooks”), including the Market Conduct Rulebook. All capitalised terms, if not defined within these Listing Standards, have the same meaning ascribed to them in the VARA Regulations or the accompanying Rulebooks.

3. These Listing Standards will be published on the Company’s website and reviewed annually, unless a new virtual asset is listed or there is a change in regulation that requires an earlier update. The Chief Risk and Compliance Officer of the Company (“Compliance Officer”) is responsible for maintaining, developing, implementing and updating these Listing Standards and ensuring compliance with all applicable laws, regulations, and industry best practices. The board of directors of the Company (collectively, the “Board”, and individually, each of the of the “Director(s)”) is responsible for approving and monitoring the implementation of these Listing Standards and any related procedures. After establishing that an update is required to the Listing Standards, the Compliance Officer will propose changes by presenting them to the Board. Upon approval of such changes by the Board, the same will be incorporated in these Listing Standards.

4. STIX takes reasonable steps, including but not limited to, conducting relevant due diligence to ensure that all Virtual Assets, that are supported by it meet the standards set forth hereinunder, prior to, and at all times, during which it provides the Services and/or is engaged in any other virtual asset activities in relation to such Virtual Assets.

5. STIX will consider, amongst others, the following criteria in relation to all supported Virtual Assets:

Considerations
Its market capitalisation, fully diluted value and liquidity, and whether such metrics have trended downwards over time.
Its design, features and use cases, whether or not intended by the Issuer or relevant developers.
Whether there are features which may materially affect STIX’s compliance with applicable laws including the VARA Regulations, AML/CFT, sanctions, securities, and intellectual property.
Regulatory treatment by VARA and other appropriate authorities (including authorities outside of the Emirate of Dubai), in particular whether the issuance of a relevant Virtual Asset has received any regulatory approvals.
Whether a Virtual Asset is prohibited by VARA or any other appropriate authorities (both inside, or outside the UAE) in jurisdictions where STIX will provide Broker-Dealer and Advisory services, or equivalent activities, in relation to such Virtual Asset.
The security and immutability of the underlying DLT protocol.
Its future development (e.g., “roadmap”) as communicated by the Issuer and/or relevant developers.
Whether it may be susceptible to price manipulation for any reason and relevant mitigations that will be implemented by STIX.
Whether potential or actual conflicts of interest that may arise, should STIX provide any Services in relation to the virtual asset and relevant mitigations.
The background of its Issuer including, but not limited to, relevant experience in the virtual asset sector and whether it has been subject to any investigations or claims in relation to fraud or deceit.
If a Virtual Asset represents rights to any other assets, the enforceability of such rights.
Sufficient assets are available to satisfy any obligation with respect to any of the Services.

6. The Virtual Assets may not have been issued at the time of their listing on the Company’s platform. However, the Company will ensure that such Virtual Assets also meet these Listing Standards. STIX will ensure that the terms and conditions in relation to a Virtual Asset, reflect, to the extent possible, the operation of any existing underlying physical market and avoid adverse impacts to such market.

7. STIX will review all terms and conditions in relation to a supported Virtual Asset on a periodic basis for appropriate correlation with any physical market, to ensure that such terms and conditions conform to standards and practices in that physical market.

8. STIX will regularly, and at a minimum, annually, assess that a Virtual Asset, continues to meet and comply with these Listing Standards. In this respect, STIX will ensure that (a) in the event of any major global market development, (b) other external factors which impact the ability of a Virtual Asset to comply with these Listing Standards, or (c) upon the publication of a notice by VARA in relation to a Virtual Asset’s ability to comply with these Listing Standards; immediately review the relevant Virtual Asset and reconfirm its suitability for being offered as part of its Services.

9. STIX reserves the right to set conditions in relation to a Virtual Asset that may be suspended, including where a Virtual Asset no longer meets these Listing Standards. Stix will have and implement all necessary operational procedures and controls in the event such conditions are met.

10. STIX is required to and will notify VARA as soon as possible, after becoming aware that a Virtual Asset no longer meets these Listing Standards, and it will take such steps as VARA may direct in order to minimise any adverse impact on any of STIX’s clients.

11. STIX will diligently and on a best-effort basis, maintain their books and records in their original form or native format, including those recorded on distributed ledgers, where appropriate. All records will be retained for a minimum of eight (8) years and will be available to inspection by VARA upon request.

SCHEDULE 1

LISTED VIRTUAL ASSETS

S.NO	VIRTUAL ASSET	ISSUER / OFFEROR	ISSUER / OFFEROR BACKGROUND
1	Eigenlayer	Layr Labs	EigenLayer is a protocol built on Ethereum that introduces restaking, a new primitive in cryptoeconomic security.
2	Celestia	Celestia Foundation	Celestia is a modular layer 1 blockchain that focuses solely on ordering transactions and making the data for transactions available.
3	Manta Network	Devil Ray Group Ltd	Manta Network is a Layer 2 network that utilizes zero-knowledge proofs to provide secure and scalable solutions for decentralized applications (DApps) on Ethereum.
4	Fuel Network	Fuel Labs	Fuel is a layer-2 scalability technology designed to provide the world's fastest modular execution layer.
5	Etherfi	Ether.fi SEZC	EtherFi is a decentralized, non-custodial liquid staking platform that brings positive disruption to DeFi by allowing staking on Ethereum.
6	Ethena	Ethena OpCo Ltd	Ethena is a synthetic currency protocol built on the Ethereum platform, aiming to provide a native cryptocurrency solution independent of traditional banking infrastructure.
7	Scroll	Scroll Foundation	Scroll is an Ethereum Layer 2 network that uses zk-rollup technology to process transactions off Ethereum on its own network, reducing costs and increasing transaction speed.
8	zkSync	Matter Labs	zkSync is a trustless protocol for scalable low-cost payments on Ethereum, powered by zkRollup technology.
9	LayerZero	Layer Zero Labs	LayerZero is a messaging protocol that allows for interoperability and facilitates seamless cross-chain messaging across countless blockchains.
10	RISC Zero	RISC Zero Inc.	RISC Zero is a crypto startup that is dedicated to developing a scalable and developer-friendly blockchain infrastructure using zero-knowledge proofs.
11	Altlayer	Alt Research Ltd	AltLayer is an open and decentralized protocol for developers to launch application-tailored rollups.
12	Berachain	Berachain Corporation	Berachain is a DeFi-focused EVM-compatible Layer 1 blockchain built on the Cosmos SDK, powered by Proof of Liquidity Consensus and will be EVM compatible.
13	Anoma	Anoma Stiftung (Foundation)	Anoma is a sovereign, proof-of-stake blockchain protocol that enables private, asset-agnostic cash and private bartering among any number of parties.
14	Aleo	Aleo Systems Inc.	Aleo is a Layer 1 blockchain – based on a novel consensus protocol – is designed to be faster and more efficient than traditional models by leveraging zero-knowledge (ZK) proofs.
15	Ceramic	3Box Labs	Ceramic is a decentralized data network that brings unlimited data composability to Web3 applications.
16	Space and Time	Space and Time Inc.	Space and Time is a decentralized data warehouse for blockchain applications.
17	Starkware	StarkNet Foundation	StarkNet is a permissionless decentralized Validity-Rollup (also known as a “ZK-Rollup”). It operates as an L2 network over Ethereum.
18	Kakarot	KKRT Labs	Kakarot is a zkEVM (zero-knowledge Ethereum Virtual Machine) implemented in Cairo, a language associated with the CairoVM.
19	Sui	Mysten Labs	Sui is a Layer 1 decentralized permissionless smart contract platform based towards low-latency management of assets.
20	GenSyn	Gensyn Limited	Gensyn Protocol is a layer-1 trustless protocol for deep learning computation that rewards participants for their compute time.
21	Ondo Finance	ONDO Foundation	Ondo Finance is an open and decentralized investment bank that enables and facilitates connection between stakeholders in the emerging DeFi ecosystem.
22	DELV	Element Finance Inc.	DELV brings the attractive high fixed rate yields while maximizing capital efficiency, creating market liquidity, and reducing user costs.
23	Sei Network	Sei Labs	Sei Network is a Layer-1 created specifically for DeFi with the aim of becoming a foundational platform for the future financial system.
24	Flashbots	FLASHBOTS LTD.	Flashbots is a research and development company that focuses on miners and searchers for transparent and efficient MEV extraction.
25	Wormhole	Wormhole Protocol	Wormhole is a leading interoperability platform that connects over 20 blockchain networks, providing developers with access to liquidity and users.

SCHEDULE 2

VA STANDARDS

VIRTUAL ASSET STANDARDS

Due diligence on prospective virtual assets is conducted by the teams led by the Chief Financial Officer and the Head of Institutional Sales. They will consult, where required, with the Chief Risk and Compliance Officer and the Chief Information Security Officer. When conducting due diligence on prospective virtual assets and contractual agreements for listing, we consider various factors, including but not limited to:

1. Market Metrics: We evaluate the market capitalisation, fully diluted value, and liquidity of the asset, as well as trends over time. To do this, the team led by the Chief Financial Officer will undertake the following steps:

(a). Gather data on market capitalisation, fully diluted value, and liquidity of the virtual asset from reputable financial data providers;

(b). Analyze historical price trends, trading volumes, and market performance over different time periods (daily, weekly, monthly, yearly); and

(c). Compare the virtual asset's performance against benchmark indices or similar virtual assets.

2. Design and Utility: The design, features, utility, and value proposition of the virtual asset are assessed, along with its current transferability, regardless of the issuer's or developers' intentions. To do this, the team led by the Head of Institutional Sales will undertake the following steps:

(a). Review the whitepaper and technical documentation of the virtual asset for details on the design and features.

(b). Assess the current and potential use cases of the virtual asset.

(c). Evaluate the virtual asset's functionality and whether it meets its intended purpose.

(d). Check for current transferability features and limitations.

3. Prohibition Status: We determine if the virtual asset is prohibited by VARA or other authorities in regions where STIX or its affiliates operate. To do this, the Head of Institutional Sales will consult with the Chief Risk and Compliance Officer. Together, they will undertake the following steps:

(a). Research the regulatory status of the asset in jurisdictions where STIX and its affiliates operate;

(b). Consult VARA and other relevant regulatory bodies' databases for any prohibitions;

(c). Document any regional restrictions or prohibitions; and

(d). Approve only those virtual assets that are not prohibited under a law or regulation for the time being in force.

4. Regulatory Approval: The regulatory treatment by VARA and other authorities is considered, especially if the asset has received regulatory approvals or if it may constitute a regulated financial product in other jurisdictions. The teams led by the Chief Financial Officer and Head of Institutional Sales will consult with the Chief Risk and Compliance Officer. We will assess if official regulatory documentation and approvals exist for the virtual asset in question. If such documentation or approvals exist, we will further examine if the virtual asset is classified as a regulated financial product in other jurisdictions. We will list only those virtual assets in relation to which we are able to comply with extant regulations of the VARA.

5. Regulatory Compliance: We check for features that could impact compliance with UAE laws, regulations, rules, or directives, particularly those related to AML/CFT, sanctions, securities, and intellectual property. The team led by the Chief Financial Officer will consult with the Chief Risk and Compliance Officer. Together, they will compare the features of the virtual assets with requirements laid out in UAE laws, regulations, and directives related to AML/CFT, sanctions, securities, and intellectual property, so as to ensure alignment of features of the virtual assets with regulatory requirements.

6. Security and Immutability: The security and immutability of the underlying DLT protocol are critically examined. The team led by the Head of Institutional Sales will consult with the Chief Information Security Officer. Together, they will:

(a). Review the history of any security breaches or vulnerabilities in relation the underlying DLT protocol of the virtual asset; and

(b). Assess the immutability of the transaction records on the DLT protocol of the virtual asset.

7. Development Team: We review the product development team, their plans, and the development roadmap as communicated by the issuer or developers. The team led by the Head of Institutional Sales will:

(a). Review the backgrounds and qualifications of the development team members.

(b). Analyze the development roadmap and milestones.

(c). Evaluate the team's track record and experience in similar projects.

8. Associated Products: Products linked to the project or those that interact with the virtual asset, such as platforms, are considered. The team led by the Head of Institutional Sales will:

(a). Identify and review other products linked to the project;

(b). Assess the interoperability and integration of these products with the virtual asset; and

(c). Consider the market reception and usage of associated products.

9. Conflict of Interest: Potential or actual conflicts of interest are identified, along with relevant mitigations if STIX engages in virtual asset activities related to the virtual asset. The team led by the Chief Financial Officer will consult with the Chief Risk and Compliance Officer. Together they will:

(a). Identify any potential or actual conflicts of interest;

(b). Evaluate the measures in place to mitigate these conflicts; and

(c). Ensure transparency and proper disclosure of any conflicts.

10. Rights to Other Assets: If the virtual asset represents rights to other assets, the enforceability of these rights is reviewed. The Chief Financial Officer will consult with the Chief Risk and Compliance Officer. Together, they will review existing documentation as well as request additional documentation, where required so as to:

(a). Verify the legal enforceability of rights represented by the virtual asset;

(b). Assess the documentation and contracts associated with these rights; and

(c). Confirm the legitimacy and ownership of the underlying assets.

11. Asset Availability: We assess whether sufficient assets are available to meet obligations related to any virtual asset activities. The team led by the Head of Institutional Sales reviews existing documentation as well as public sources and may request additional documentation to examine:

(a). Review the supply mechanism and distribution plans relating to the virtual asset; and

(b). Monitor the liquidity and availability of the virtual asset.

12. Terms and Conditions: The team led by the Chief Financial Officer and Head of Institutional Sales review existing terms and conditions in relation the virtual asset to ensure they align with the operation of any underlying physical market and avoid negative impacts, conforming to industry standards and practices.

13. Sales and Offerings: Any previously completed, ongoing, or planned sales or offerings of the virtual asset are considered. The team led by the Head of Institutional Sales undertakes the following steps:

(a). Review details of any completed, ongoing, or planned sales or offerings in relation to the virtual asset based on seller disclosures or publicly accessible material;

(b). Evaluate the impact of these sales on the market and asset value; and

(c). Evaluate transparency and compliance with regulatory requirements for these offerings.