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CLIENT MONEY AND ASSET HANDLING POLICY
Purpose
1.1. The purpose of this policy is to outline OFZA FINTECH VIRTUAL ASSET EXCHANGE SERVICES L.L.C. (‘OFZA’) rules for safeguarding client funds, held through the course of conducting OFZA’s business.
1.2. This Policy also aims to ensure that:
1.2.1. The Company promotes transparency and integrity in client money handling.
1.2.2. The Company protects the interests of its clients.
1.2.3. The Company implements systematic processes for establishing and maintaining Client Funds Accounts and handling client money.
1.2.4. The Company maintains adequate measures in place to monitor its client money processes and to effectively manage incidents and breaches arising from our handling of client money.
1.2.5. The Company allocates clear responsibility for the handling of client money and monitoring compliance with this Policy.
1.2.6. The Company ensures that people are aware of their responsibilities and are given adequate training for handling client money.
1.2.7. The Company has put in place controls to minimize the risk of loss and damage from mishandling of client money.
Definitions-Explanations:
2.1 Client Money means all money held or controlled by OFZA on behalf of the client in the course of, or in connection with, the carrying on of any virtual asset activity, except for—
2.1.1. money which is immediately due and payable to OFZA for OFZA own account, such as fees for services provided to a client.
2.1.2. amounts payable by OFZA for expenses incurred on behalf of the client; and
2.1.3. other charges that are due and payable to OFZA.
2.14. Client Money is held or controlled by OFZA if it is—
a. directly held by OFZA.
b. held in an account in the name of the OFZA.
2.2 Client Account means an account at a Third-Party Bank which—
a. holds or is established to hold the Client Money of one or more clients; and
b. is maintained in the name of OFZA.
2.3 Third-Party Bank means the bank with which a Client Account is maintained.
3. Treatment of Client Money:
3.1 OFZA, when holding client funds, maintains them in designated Client Money Accounts (CMAs) in accordance with the client agreement and applicable VARA Rules, ensuring that each such account is clearly identified as a ‘Client Money Account’ in its title and used solely for the purpose of holding client funds. Fiat client funds are held at Zand Bank, a licensed UAE banking institution.
3.2 OFZA is committed to ensuring that client funds are distinguishable and safeguarded at all times.
3.3 OFZA assumes the responsibility of upholding the separation of Client Virtual Assets and is mandated to refrain from rehypothecation unless it secures explicit consent from the client. This requirement ensures that any action involving the reuse of Client Virtual Assets is only undertaken with the client's clear approval and discretionary authority.
3.4 OFZA shall maintain Client choices and preferences, emphasizing a client-centric approach to asset management. By adhering to these guidelines, OFZA aims to build trust and confidence in its handling of Virtual Assets. This step is crucial, granting OFZA the legal standing to proficiently carry out various Virtual Asset activities on behalf of its Clients. Upholding these standards not only prioritizes Client welfare but also ensures compliance with regulatory prerequisites governing the management of Virtual Assets. By doing so, OFZA aligns itself with the necessary legal and operational frameworks in this specialized domain.
3.5 Any client money that OFZA receives or manages is promptly deposited into a designated client account within one [1] day of its receipt.
3.6 For clients based in the UAE, OFZA deposits their funds into client accounts held with Third-Party Banks located within the UAE. For clients outside the UAE, while OFZA might initially deposit their funds into third-party banks abroad, these funds will be transferred and retained in Third-Party Banks within the UAE. Such transfers are initiated within twenty-four [24] hours of receiving the funds.
4. Client Virtual Asset (VA) Classification
4.1. Client VAs under the custody of OFZA are not classified as depository liabilities or assets of OFZA. They must be distinctly identified and managed as assets owned by the clients.
4.2. All virtual assets held by clients are the property of the client at all times. In the event of insolvency of OFZA, client assets will be segregated and protected and will not form part of the firm’s estate or be subject to claims by creditors.
4.3. Virtual Assets are safeguarded through Fireblocks’ institutional-grade custody infrastructure, which leverages distributed key shares and MPC-based protection. OFZA maintains digital asset insurance for eligible client assets, including coverage for theft, internal fraud, and cyber incidents. OFZA maintains virtual asset insurance for eligible client assets, including coverage for theft, internal fraud, and cyber incidents. In the event of a third-party custodian or banking partner insolvency, client assets remain protected, segregated and safeguarded as they do not form part of that institution’s estate. Further OFZA is maintaining comprehensive commercial crime and cybersecurity insurance coverage for client assets held in custody.
5. Temporary Holding and Forwarding:
5.1 OFZA, acknowledges and adheres to the following conditions under which the requirement to pay Client Money into a Client Account does not apply:
5.1.1. Client Money may be temporarily held by OFZA before forwarding it to an Entity nominated by the client.
5.1.2. Client Money is associated with a delivery versus payment transaction in the following scenarios:
In the case of a client purchase, Client Money from the client will be due to OFZA within one (1) calendar day upon the fulfillment of a delivery obligation.
In the case of a client sale, Client Money will be due to the client within one (1) calendar day following the client's fulfillment of a delivery obligation.
Client Money is held in the client's own name, and OFZA has a mandate to manage the Client Money on a discretionary basis.
5.2 Payment into Client Account: OFZA commits to pay Client Money into a Client Account if OFZA has not fulfilled its delivery or payment obligation within three (3) calendar days of receiving the Client Money.
5.3 OFZA will maintain adequate records of all payments of Client Money received for a period of eight (8) years. The records will include date of receipt, name and unique identifier of the client for whom payment is to be credited, transaction identifier and/or reference; and date when the payment was presented to the OFZA’s Third-Party Bank.
6. Custody
6.1 The Client may transfer funds and Virtual Assets to the Client Account from any of the bank accounts or External Wallets registered on the Platform. We may require the Client to verify that the Client controls the bank account or External Wallet from which the Client transfer Assets to the Client Account.
6.2 The Client may withdraw or transfer Assets from the Client Account, into a bank account or an External Wallet, as the case may be, which is under the client’s control and registered with OFZA.
6.3 The Client understands and agrees that OFZA shall have sole discretion to accept to register on the Platform any such bank account or External Wallet the Client specifies. It is the Client’s responsibility to ensure the timely and proper transfer to and from the Client’s bank account or External Wallet.
6.4 The Client acknowledges and agrees that:
6.4.1 The Client is solely responsible for their use of the Client’s bank account and External Wallet, and any transfers of Assets from the Client’s bank account and External Wallet and the Client Account, and we shall not be liable for any losses resulting from the delay in receiving Assets into the Client Account if such delay is not due to our gross negligence, fault or fraud.
6.4.2 The Client shall be responsible for ensuring that any inbound and outbound transfer of Assets is handled in compliance with our requirements, any relevant third party, or External Wallet provider requirements.
6.4.3 The Client shall be responsible for ensuring that the address to which any Virtual Assets are to be transferred is properly formatted and suitable for the type of Virtual Asset being transferred. We will not be able to reverse any transfer and shall not have any responsibility or liability if the Client instructs us to transfer a Virtual Asset to an address that is incorrect, improperly formatted, erroneous or intended for a different type of Virtual Asset; The Client shall be responsible for ensuring that there are no errors in any of the transfer instructions.
6.4.4 If the Client fails to comply with any requirements of this policy, the transferred Virtual Assets may be permanently lost. The timing for completing any transfer will depend on the acts of third parties that are outside of our control, and we make no guarantee regarding the amount of time it may take to complete any such transfer.
6.4.5 The Client acknowledges and agrees that we may impose limits on the amount of any inbound or outbound transfers, suspend the ability to transfer assets into or out of the Client Account, or terminate this User Agreement: To comply with Applicable Laws and Regulation. Please refer to website terms and conditions.
6.4.6 To comply with an order from law enforcement or other governmental authority; or otherwise, at our discretion for the security of the Platform or other appropriate reasons.
6.4.7 OFZA shall ensure that all bank accounts and custody wallet providers used for client assets undergo enhanced due diligence (EDD), including sanctions screening, on-chain wallet screening, FATF travel rule checks, market surveillance, AML/CFT risk assessment, and jurisdictional risk scoring before onboarding.
6.4.8 OFZA shall restrict or freeze any client funds or virtual assets suspected of involvement in money laundering, terrorist financing, proliferation financing, sanctions evasion, or fraud, in accordance with applicable UAE and international regulations
7. Segregation of Assets
7.1. Fireblocks is used as OFZA’s secure digital asset custodian, leveraging MPC-based key management for safeguarding client virtual assets.
7.2. OFZA shall hold:
7.1.1. Any funds credited to the Client Account in a bank account designated for that purpose.
7.1.2. Any Virtual Assets the Client transfers to the Client Account in “hot wallets”, which are protected by multi-signature authority requirements to reduce both internal and external risk factors. When OFZA holds Virtual Assets in custody on the Client’s behalf, the Client acknowledges that the Client shall be subject to the protection of the “Safe Custody Provisions” as provided for under the VARA Rules.
7.1.3. Private keys associated with client Virtual Assets shall be securely stored utilizing OFZA’s custodian’s decentralized MPC custody approach. This method involves geographically distributed key shares, ensuring that neither OFZA nor the custodian employees have direct physical access to the keys.
7.1.4. OFZA shall maintain segregation of assets through its key generation process, thereby eliminating the necessity of storing cryptographic keys. This process shall utilize Multi-Party Computation (MPC) in conjunction with zero-knowledge proofs.
7.1.5. OFZA shall ensure that its assets are held at all times separately from the Assets that it holds on the Client’s behalf or behalf of its Clients.
7.1.6. OFZA shall segregate Client VAs by holding them in dedicated VA Wallets, separate from any Virtual Assets owned by OFZA, to prevent the intermingling of assets.
7.1.7. Client Virtual Assets held by OFZA are not depository liabilities or assets of OFZA
8. Allocation of VA-Related Proceeds
8.1. All proceeds derived from Client VAs, such as “airdrops”, “staking gains”, or similar benefits, shall be allocated to the client’s account.
8.2. OFZA may opt not to collect or distribute certain proceeds if:
a. The client has provided prior written consent for such a procedure; or
b. The value of such proceeds falls below a predetermined threshold, in which case:
8.3. In the event of a blockchain fork, chain split, or protocol migration, OFZA shall act in the best interest of clients and determine, in good faith, whether and how to support the new network or asset. The treatment and distribution of resulting assets shall be disclosed to clients promptly.
9. Client Disclosure
9.1. Client Asset Disclosure Statement (CADS):
9.1.1 OFZA shall provide all clients with a clear and comprehensive Client Asset Disclosure Statement (CADS) that outlines:
9.2. Safeguarding of Client Assets
9.2.1 Virtual Assets (VAs): Client VAs are securely stored in Fireblocks within segregated user vaults, ensuring that each client's assets are isolated and not commingled with those of other clients or OFZA.
9.2.2 Client Money: Client funds are held in a segregated client money account at Zand Bank, separate from OFZA's proprietary funds.
9.3. Nature of Custody Arrangements and Associated Risks
9.3.1 Segregated Custody: Each client's VAs are held in separate VA wallets, containing only that client's assets, in compliance with VARA's segregation requirements.
9.3.2 Control and Access: OFZA maintains control over each VA at all times, with access restricted to authorized personnel only.
9.3.3 Rehypothecation Prohibition: Client Money held in custody are not depository liabilities or assets of OFZA. Rehypothecation of Client Money is strictly prohibited, regardless of client consent.
9.3.4 Operational Risks: Risks include technical failures, human error, or delays in transaction processing.
9.3.5 Cybersecurity Risks: While Fireblocks employs industry-standard security protocols, there remains a residual risk of cyber incidents, including unauthorized access or breaches.
9.3.6 Financial Institution Risk: Client money held in Zand Bank is subject to the solvency and operational risks of the bank, though segregation mitigates direct exposure.
9.4. Details of How Virtual Assets Are Deposited, Protected, and Ownership Respected
9.4.1 All Virtual Assets traded through OFZA’s trading venues are deposited into Fireblocks custody wallets under OFZA’s control.
9.4.2 Each client’s ownership is represented through dedicated user vaults on Fireblocks, ensuring clear and auditable segregation of client assets.
9.4.3 Fireblocks’ MPC (Multi-Party Computation) key management and tiered access controls safeguard assets from unauthorized access or compromise.
9.4.4 Ownership of client Virtual Assets remains at all times with the client; OFZA acts solely as a custodian and facilitator.
9.5. Wallet and sweeping controls
9.5.1 To manage security and operational efficiency, OFZA operates sweeping mechanism that secure the client assets. All wallets are protected by multi-signature or MPC custody protocols, with strict access controls and enforced operational segregation. Only authorized personnel may initiate transfers, with full audit logging in place. OFZA maintains adequate cold wallet reserves to ensure full protection and backing of all client assets.
9.6. Pricing Determination of Virtual Assets
9.6.1 OFZA determines the prices of Virtual Assets it quotes to clients based on aggregated liquidity from multiple external exchanges, liquidity providers, and market makers.
9.6.2 Quoted prices reflect real-time market depth, bid-ask spreads, and internal risk management parameters.
9.6.3 Any spread or markup applied by OFZA is transparently disclosed within the trading interface and forms part of the quoted execution price to clients.
9.6.4 OFZA ensures transparent and fair pricing for all Virtual Asset transactions. Spot prices will be derived from aggregated real-time data sourced from multiple market makers/ liquidity providers and reference exchanges, reflecting true market depth. Prices for OTC trades are determined based on prevailing market conditions, available liquidity, and trade size. Any applicable spread or markup is disclosed at the time of trade execution and reflected in the quoted price.
9.7. Client Asset Breach or Loss Notification
9.7.1 In the event of any breach, loss, or unauthorized access to client virtual assets, clients will be notified without undue delay. Notifications will include a description of the incident, assets affected, and any remedial actions taken. For all risk disclosures related to client money please refer to Risk Disclosure and Terms and conditions published in our website.
10. Contingency Planning and Insurance
10.1. OFZA shall maintain a Client Asset Protection Plan (CAPP) including:
10.1.1 Virtual Asset Custody Insurance covering loss or theft from hacking or internal fraud.
10.1.2 Bank Account Deposit Insurance, where applicable, up to the guaranteed amount per client under UAE law.
10.1.3 OFZA shall develop business continuity and disaster recovery (BCP/DR) procedures ensuring uninterrupted custody and access to client assets.
10.1.4 OFZA will test these procedures at least quarterly, with independent verification of the results.
