5.3. Obligations of Validators

Validators provide Signatures to Minters for the update of their Collateral Balance and for the removal of RetrievalIDs.

This requires the Validators to have full visibility on:

• The Minter’s Collateral Storage, including its Deposit Accounts.

• All order flows of such accounts.

• The appropriate blockchain addresses of a Minter’s Collateral Storage.

In addition to verifying account data and compliance with the eligibility criteria for collateral, the Validators shall perform checks, given that it is in the interest of the Minter to provide maximum transparency on the collateral.

Validators shall, for example, confirm that the Mandatory Contracts are in place between the Minter and the SPV Operator, as well as confirm that the country of incorporation of the SPV is in an Approved Jurisdiction at the time of each confirmation, etc.

In the case that the Validator gains certain knowledge that certain Mandatory Contracts have been made invalid or have been terminated without a valid replacement, the Validator shall no longer provide Signatures until those contracts have been remedied in compliance with the Adopted Guidance.

Should the Validator perceive obviously suspicious or obviously non-compliant mint proposals as well as mint proposals that are the result of obvious human error (by any Minter) it shall cancel such mint proposals within the Mint Delay time frame.

The Validator shall in particular cancel mint proposals of Minters if the Validator was informed by the SPV Operator of such Minter that the Administrative Buffer is not meeting the criteria set out in the Adopted Guidance for as long as such breach exists.

In emergency situations where a Validator has a justifiable reason to believe that a Minter is non-compliant with the Adopted Guidance in a material way, but does not refrain from submitting mint proposals, or a damage to the collateralization of $M is to be reasonably expected, the Validator shall use the freezeMinter() function until the situation is remedied.

The use of the freezeMinter() and the cancelMint() functions shall not constitute any basis for claims for damage compensation by the affected Minter and/or its BD Minter against the Validator who has called such function.

Validators shall only terminate a Minter-Validator Agreement with a notice period of no shorter than 90 days, including in the case of a Wind Down. They shall help the Minter to transition to a replacement Validator. If no replacement Validator can be found within this time window, the terminating Validator shall extend its service for the Minter for up to an additional 90 days upon request of the Minter. The right to terminate for cause shall remain unaffected.