Sanctions Policy

Purpose

Valtorum is committed to maintaining a secure, lawful and trusted permissioned digital settlement ecosystem. Compliance with applicable economic sanctions laws and regulations is an integral component of our financial crime prevention and risk management framework.

Unlike certain digital assets that rely on issuer-controlled freezing or confiscation mechanisms after issuance, USDV is designed around a permissioned participation model. Compliance is achieved primarily through participant authorization, identity verification, controlled issuance and redemption, ongoing due diligence and continuous monitoring rather than post-transaction intervention.

This Policy explains Valtorum's approach to sanctions compliance across the USDV ecosystem and all supported Services.

This Policy should be read together with our Terms of Use, Privacy Policy, AML & KYC Policy and Compliance & Enforcement Policy.

Scope

This Policy applies to:

• Individual applicants
• Corporate applicants
• Authorized participants
• Issuance partners
• Redemption partners
• Institutional counterparties
• Vendors
• Service providers
• API users
• Business partners
• Any individual or organization seeking to use Valtorum Services

This Policy applies regardless of the blockchain network, distributed ledger technology or settlement infrastructure on which USDV is supported.

Our Sanctions Philosophy

Valtorum believes that sanctions compliance should be implemented before participation, not through ongoing issuer control of issued digital assets.

Accordingly, Valtorum's sanctions framework is based upon:

• Comprehensive onboarding
• Risk-based authorization
• Identity verification
• Business verification
• Beneficial ownership reviews
• Continuous compliance monitoring
• Controlled issuance
• Controlled redemption
• Ongoing due diligence
• Regulatory cooperation

Once USDV has been validly issued to an authorized participant, Valtorum does not rely upon discretionary token freezing or confiscation as its primary sanctions enforcement mechanism.

Instead, sanctions compliance is maintained by controlling participation within the ecosystem.

What Are Sanctions?

Economic sanctions are legal restrictions imposed by governments or competent authorities that may prohibit or restrict dealings with certain:

• Individuals
• Companies
• Financial institutions
• Governments
• Jurisdictions
• Organizations
• Digital wallet addresses
• Vessels
• Aircraft
• Economic sectors
• Assets

Sanctions obligations vary by jurisdiction and may change over time.

Risk-Based Compliance

Valtorum operates a risk-based sanctions compliance programme.

Every applicant and participant is assessed according to factors including:

• Country of residence
• Country of incorporation
• Geographic exposure
• Ownership structure
• Ultimate beneficial owners
• Business activities
• Source of funds
• Source of wealth
• Transaction characteristics
• Historical activity
• Regulatory status
• Overall sanctions risk

The level of due diligence applied depends upon the nature and complexity of each relationship.

Sanctions Screening

Valtorum may conduct sanctions screening:

• Prior to authorization
• During onboarding
• Prior to issuance
• Prior to redemption
• During periodic compliance reviews
• Following material changes
• During investigations
• Whenever otherwise considered appropriate

Screening may apply to:

• Individuals
• Companies
• Directors
• Shareholders
• Beneficial owners
• Authorized representatives
• Wallet ownership
• Settlement counterparties
• Banking relationships

Information We May Review

Sanctions compliance may require review of information including:

• Government-issued identification
• Corporate records
• Ownership structures
• Beneficial ownership declarations
• Regulatory licences
• Tax residency
• Banking information
• Wallet ownership
• Public records
• Blockchain activity
• Transaction history
• Counterparty exposure
• Adverse media
• Regulatory information
• Other information reasonably necessary to assess sanctions risk

Ongoing Monitoring

Authorization is subject to ongoing review.

Valtorum may periodically reassess participants where circumstances change, including:

• Changes in ownership
• Changes in directors
• Expansion into new jurisdictions
• Regulatory developments
• Updated sanctions programmes
• Material business changes
• Significant settlement activity
• New risk information

Additional documentation may be requested where appropriate.

Blockchain & Network Monitoring

Valtorum may analyse publicly available activity across supported blockchain networks and digital settlement infrastructures.

Monitoring may include:

• Wallet analysis
• Counterparty analysis
• Transaction relationships
• Geographic exposure
• Behavioural analysis
• Public blockchain intelligence
• Risk indicators
• Network analysis

This monitoring supports responsible onboarding, ongoing due diligence and financial crime prevention.

Enhanced Due Diligence

Where elevated sanctions risk is identified, Valtorum may require:

• Additional identification documents
• Corporate records
• Ownership documentation
• Source of funds evidence
• Source of wealth evidence
• Business explanations
• Transaction purpose
• Banking information
• Regulatory licences
• Additional compliance documentation

Participation may be delayed until satisfactory review has been completed.

Prohibited Conduct

Participants must not use the Services to:

• Circumvent sanctions laws
• Conceal beneficial ownership
• Misrepresent jurisdictions
• Submit false information
• Structure transactions to evade compliance controls
• Facilitate prohibited transactions
• Act on behalf of sanctioned persons
• Use intermediary arrangements to avoid screening
• Misuse the authorization process
• Otherwise violate applicable sanctions laws

Compliance Actions

Where sanctions concerns arise, Valtorum may, subject to applicable law:

• Decline authorization
• Decline onboarding
• Request additional documentation
• Conduct enhanced due diligence
• Delay application processing
• Decline issuance requests
• Decline redemption requests
• Decline future business relationships
• Remove a participant's authorization for future participation
• Refuse access to additional Services
• Cooperate with competent authorities
• Preserve records
• Submit reports where required by law
• Exercise any other rights available under applicable agreements or applicable law

These measures are intended to prevent prohibited participation before settlement occurs.

No Issuer Freeze or Clawback

USDV has been designed so that Valtorum does not rely upon discretionary freezing, confiscation or clawback mechanisms as part of its ordinary sanctions compliance programme.

Valtorum's sanctions controls are exercised primarily through:

• Authorization of participants
• Identity verification
• Risk-based onboarding
• Continuous due diligence
• Controlled issuance
• Controlled redemption
• Ongoing monitoring
• Regulatory cooperation

This approach promotes settlement certainty while maintaining a permissioned ecosystem based upon participant eligibility rather than post-transaction intervention.

Nothing in this Policy should be interpreted as granting Valtorum discretionary authority to freeze, confiscate, reverse or unilaterally invalidate validly issued USDV solely for sanctions enforcement purposes.

Regulatory Cooperation

Valtorum may cooperate with competent governmental authorities where required or permitted by applicable law.

Such cooperation may include responding to lawful requests relating to sanctions compliance, financial crime investigations or other regulatory matters.

Where legally required, Valtorum may disclose relevant information without prior notice.

Confidentiality

Certain sanctions-related matters are subject to legal confidentiality obligations.

Accordingly, Valtorum may be unable to disclose:

• Internal sanctions assessments
• Screening methodologies
• Risk scoring
• Investigation status
• Information shared with authorities
• Reasons supporting compliance decisions
• Whether regulatory reports have been submitted

The absence of an explanation should not be interpreted as confirmation or denial of any sanctions-related determination.

User Responsibilities

Participants are expected to:

• Provide complete and accurate information.
• Promptly notify Valtorum of material changes affecting eligibility.
• Maintain accurate ownership information.
• Cooperate with reasonable compliance requests.
• Ensure that their activities comply with applicable sanctions laws.
• Refrain from attempting to circumvent compliance controls.

Failure to cooperate may result in refusal of future Services or termination of the business relationship.

Reservation of Rights

Valtorum reserves the right, subject to applicable law, to refuse authorization, decline issuance or redemption requests, terminate commercial relationships or deny future participation where it reasonably believes such action is necessary to comply with applicable sanctions laws, regulatory obligations or prudent risk management practices.

Nothing contained within this Policy limits any additional rights available to Valtorum under its Terms of Use, Compliance & Enforcement Policy, AML & KYC Policy or applicable law.

Changes to this Policy

Valtorum may amend this Policy periodically to reflect changes in law, regulatory expectations, operational requirements or internal risk management practices.

Updated versions become effective upon publication unless otherwise stated.

Continued use of the Services constitutes acceptance of the revised Policy.

Contact

Questions relating to sanctions compliance should be directed through Valtorum's official compliance contact channels.

Users should not transmit sensitive documentation through unsecured communication methods unless specifically requested by Valtorum.

Final Notice

Valtorum operates a permissioned digital settlement ecosystem in which compliance begins before participation. Authorization to use USDV is discretionary and may be granted, declined or withdrawn for future participation based on legal, regulatory or risk considerations. Rather than relying on issuer-controlled freezing or clawback of validly issued USDV, Valtorum maintains the integrity of the ecosystem through responsible onboarding, continuous due diligence, controlled issuance and redemption, ongoing monitoring and cooperation with competent authorities in accordance with applicable law.