3.3. Collateral Storage

Collateral shall only be recognized as Eligible Collateral by the Validator if this collateral is appropriately held in the Collateral Storage.

Given the current technological conditions, and the nature of the Eligible Collateral proposed by the Adopted Guidance, with appropriate Collateral Storage we refer specifically to the fact that the entity that legally owns the collateral (SPV) fulfills a set of requirements as described below. The fulfillment of these requirements should be verified through cooperation between Minters (via appropriate transparency), Validators, and Governance oversight in a way deemed satisfactory by Governance. The appropriate execution of the Mandatory Contracts described above should satisfy those conditions.

Based on this set of fundamental requirements, the SPV:

• is an orphaned entity;

• is minimally affiliated (via its shareholders) with or (practically) controlled by any Validator or Minter or the affiliates of any Validator or Minter;

• does not conduct any other business except the storage of collateral for Minters and issuance of Notes to Minters;

• is a restricted-purpose vehicle that prevents entering into any other liabilities but the ones directly related to the storage of collateral and the issuance of Notes against such collateral;

• is designed to be insolvency remote;

• is incorporated in an Approved Jurisdiction, as described below;

• possesses all required licenses and permissions (if necessary) to store collateral and to issue Notes against such collateral;

• is audited on an annual basis by a licensed auditor deemed appropriate to perform the task.

Additionally, any Notes issued to the Minter shall comply with the following in order to be considered Eligible Collateral:

• Full asset segregation of collateral not only at the Minter level, but also at the level of each wallet address controlled by the Minter — in case the Minter controls more than one permissioned address.

• Limited recourse so that the claims of any Minter are strictly limited to the collateral belonging to its Notes.