Disclosure of Information on Conflicts of Interest

1. INTRODUCTION

Coinmate a.s. (“Coinmate,” “the Company,” or “we”) is a provider of crypto-asset services within the meaning of Regulation (EU) 2023/1114 of the European Parliament and of the Council of May 31, 2023, on markets in crypto-assets (hereinafter “MiCA”).

In accordance with Article 72 of the MiCA Regulation and Commission Implementing Regulation (EU) 2025/1142 , we have adopted and implemented a comprehensive conflict of interest policy aimed at identifying, preventing, managing, and disclosing conflicts of interest that may arise in the provision of crypto-asset services.

We assess conflicts of interest in the following relationships:

1. Between Coinmate and its customers;
2. Between individual Coinmate customers;
3. Between customers and Coinmate employees;
4. Between customers and Coinmate’s affiliated entities;
5. Between customers and Coinmate’s business partners;
6. Between customers and entities within the group.

This document provides an overview of the general nature and sources of conflicts of interest that may arise in connection with our services, and the steps we take to mitigate them.

1. SERVICES WE PROVIDE

Coinmate is authorized to provide the following crypto-asset services pursuant to Article 3(1)(16) of the MiCA Regulation:

1. providing custody and management of crypto-assets on behalf of customers;
2. exchanging crypto-assets for funds;
3. exchanging crypto-assets for other crypto-assets;
4. providing crypto-asset transfer services on behalf of customers;
5. operating a trading platform for crypto-assets.
6. REGULATORY FRAMEWORK

Our conflict of interest policy is developed in accordance with Article 72 of the MiCA Regulation and Commission Implementing Regulation (EU) 2025/1142, which lays down implementing technical standards for establishing the principles and procedures for the identification, prevention, management, and disclosure of conflicts of interest.

The Company adheres to the following key principles:

1. Identification of conflicts of interest in all areas of activity;
2. Prevention of conflicts of interest through organizational and technical measures;
3. Management of unavoidable conflicts of interest to ensure fair treatment of customers;
4. Disclosure of information regarding conflicts of interest to customers.
5. GENERAL PRINCIPLES FOR MANAGING CONFLICTS OF INTEREST

In addition to the specific measures listed below, we apply the following general principles:

Organizational Measures

Functional separation of different business activities and responsibilities, including physical separation of workplaces where appropriate.

Clear definition of employees’ responsibilities and authorities to minimize the scope for inappropriate decision-making.

Appointment of a compliance officer to oversee compliance with the conflict of interest policy.

Record-keeping

We maintain effective records of services and activities in which a conflict of interest arises or may arise that jeopardizes the interests of one or more clients.

Regular Review

We regularly review and update the conflict of interest policy to reflect changes in our services, the market environment, or regulatory requirements.

1. IDENTIFIED CONFLICTS OF INTEREST AND MEASURES TO MITIGATE THEM
2. Conflicts arising from the operation of the crypto-asset trading platform

Nature of the potential conflict:

Coinmate operates a crypto-asset trading platform where customers place orders to buy and sell crypto-assets. Orders from different customers are matched on the platform. This business model may lead to the following potential conflicts:

1. Conflicting Interests: Coinmate profits from transaction volume (higher volume = higher fees), while customers are interested in the lowest possible fees.
2. Information asymmetry: Coinmate has access to information about all orders placed on the platform, including price levels, volumes, and customer identities.
3. Risk of information abuse: Theoretically, Coinmate or its employees could use information about pending customer orders for their own benefit.
4. Conflict among customers: Customers compete for the best prices, which can create tension among different groups of customers.

Measures Taken:

1. Transparent matching method: We use a transparent order matching method as set forth in the Trading Rules available here. The matching rules are clearly described and applied automatically without human intervention.
2. Transparent fee schedule: Transaction fees are clearly published in the fee schedule on our website. The fee amounts are uniform for all customers in the relevant fee group (based on trading volume).
3. No proprietary trading on the platform: Coinmate does not trade on its own account on the platform against its customers. 
4. Prohibition on Misuse of Information: Employees are expressly prohibited from using knowledge of customer orders for their own benefit or for trading.
5. Monitoring and Detection of Market Abuse: We have systems in place to monitor and detect market manipulation, insider trading, and other forms of market abuse.
6. Fair access to the platform: All customers have equal access to the platform and to the order book (order records) displaying current prices and volumes.
7. Conflicts arising from the exchange of crypto assets 

Nature of potential conflicts:

In addition to trading on the platform, we offer customers a crypto asset exchange service where Coinmate trades on its own account directly with the customer as the counterparty. When using this service, the customer does not buy from or sell to other customers on the platform, but directly from Coinmate. Coinmate adds a margin to the market price of the cryptoasset. This business model may lead to the following potential conflicts:

1. Conflict of interests: Coinmate profits from the margin and, potentially, from price movements between the customer’s confirmation and the acquisition of liquidity. The customer is interested in the most favorable purchase/sale price possible.
2. Information asymmetry: Coinmate and its employees have knowledge of the volume of customer exchange orders, which could theoretically be used for their own trading.
3. Mixing of services: The customer will be directed to an exchange or trading platform, depending on what would be more advantageous for Coinmate. 

Measures Taken:

1. Price and margin transparency: The final price, including the margin, is clearly displayed to the customer before the transaction is confirmed. The customer has the option to reject the offer.
2. Price Fixing: The price for the customer is fixed at the moment the order is confirmed for a limited time. After this period expires, a new offer with the current exchange rate is displayed.
3. Separation of exchange services from the trading platform: Crypto assets that can be exchanged via the instant exchange service are not accepted for trading on the trading platform.  
4. Price monitoring: Coinmate compares the offered price with prices from multiple liquidity providers. 
5. Instant exchange: Exchange orders are executed in real time, thereby significantly eliminating the risk of insider trading.
6. Information barriers: Employee access to information about customer orders is strictly limited to those who need this information to perform their work.
7. Conflicts arising from the custody and management of cryptoassets

Nature of the potential conflict:

When providing cryptoasset custody and management services, a conflict of interest could arise if the company were to use customers’ cryptoassets for its own purposes or fail to adequately segregate customers’ assets from its own assets.

Measures Taken:

1. Asset segregation: Customer cryptoassets are held separately from Coinmate’s cryptoassets and are identifiable as customer assets. We maintain detailed internal records of individual customers’ holdings.
2. Prohibition on the use of customer assets: The company never uses customers’ crypto assets for its own account (including for lending, pledging, or any other similar purpose).
3. Protection of funds: Customer funds (fiat currencies) are held in segregated accounts at licensed banks in accordance with Section 41f of Act No. 21/1992 Coll. on Banks, separately from the company’s funds.
4. Conflicts arising from the remuneration of employees and third parties

Nature of the potential conflict:

Employee incentive structures or payments to third parties could lead to the unjustified favoring of certain products or services at the expense of customer interests.

Measures taken:

1. Employee remuneration is designed to promote the long-term interests of customers and the company, rather than short-term transactional gains. Remuneration is not based exclusively or predominantly on quantitative business indicators, but also takes into account qualitative criteria, including the quality of services provided and customer satisfaction.
2. Where the company collaborates with third parties (e.g., affiliate programs), these relationships are transparently disclosed and subject to oversight to prevent undue favoritism.
3. Conflicts arising from access to information

Nature of the potential conflict:

Coinmate employees may have access to sensitive information about customers, their positions, and instructions. Misuse of this information would constitute a serious conflict of interest.

Measures taken:

1. Information barriers: We have implemented organizational and technical measures to segregate duties and control the flow of information between different departments.
2. Access Restrictions: Access to sensitive information is limited only to employees who need this information to perform their jobs.
3. Personal Trading Policy: Coinmate employees may trade with their own funds, but these transactions are subject to the so-called personal trading policy. 
4. Anti-market manipulation rules: The company has comprehensive rules in place for detecting and reporting suspected market manipulation involving cryptoassets.
5. Prohibition on Misuse of Information: Employees and related parties are expressly prohibited from using non-public information obtained in connection with their duties for personal gain or for the benefit of third parties.
6. Training: All employees undergo regular training on conflicts of interest, protection of confidential information, market abuse, and ethical conduct.
7. Conflicts Arising from the Participation of Market makers

Nature of the potential conflict:

Market makers operate on the trading platform, providing liquidity under predefined terms. The selection of these providers and the terms of trading with them may influence the prices offered to customers.

Measures taken:

1. Provider independence: Market makers are selected based on objective criteria, including price quality, execution speed, liquidity, and reliability.
2. Regular reviews: Relationships with Market makers are regularly reviewed to ensure their continued suitability, the absence of conflicts of interest, and compliance with terms and conditions.
3. Conflicts arising from ties to a Market maker

Nature of the potential conflict:

One of the Market makerson our trading platform is a related party to our company (specifically, the ultimate beneficial owner (UBO) of Coinmate). This relationship could theoretically lead to a conflict of interest, for example, if the related party had access to sensitive information or received preferential treatment.

Measures Taken:

1. Standard Terms and Conditions: The related party is subject to the standard terms and conditions for Market makers on our platform without any preferential treatment or favorable terms.
2. Related-Party Transaction Policy: Transactions involving Related Parties are subject to the Related-Party Transaction Policy.
3. Restricted Access to Information: A Related Party does not have access to sensitive information regarding customer orders or Coinmate’s internal business strategies.
4. TRANSPARENCY AND DISCLOSURE

If a specific conflict of interest cannot be sufficiently mitigated and may adversely affect the integrity of the services provided or the interests of participants, the company will disclose this conflict of interest to the affected participants in a clear, fair, and non-misleading manner.

1. REFUSAL TO PROVIDE SERVICES

If we identify a conflict of interest that cannot be adequately managed or mitigated through disclosure, and which could seriously harm the customer’s interests, we may refuse to provide the requested service.

1. CONTACT INFORMATION

If you have any questions regarding our conflict of interest policy or wish to report a potential conflict of interest, please contact us at the following email address: [email protected].