Conflicts of Interests

Definitions

To ensure adequate alignment with our internal policies and processes, we will observe the following definitions for the purpose of this Disclosure:

Conflict of interest – generally, this refers to any situation where the interests of an individual or entity conflict with the interests of other persons or where the occurrence of any type of event of any nature has the potential to compromise their judgements, decisions or behavior in the pursuit of personal gain. Conflicts of interest can be categorized by the nature of the interest as well as whether it is direct or indirect.

• Direct interests are those that pertain to an individual's own personal self-interest, family obligations and personal business interests.
• Indirect interests are those that pertain to the personal, family and business interests of people or groups with whom the individual associates.

These interests can be either financial or non-financial in nature.

• Financial interests are those that involve anything of monetary value, including services rendered, commercial dealings or share ownership.
• Nonfinancial interests are those that involve personal or familial relationships and other potential sources of bias.

Potential conflicts of interest – these refer to situations where conflicts of interests are likely to occur.

Actual conflicts of interest – these refer to situations where an event or situation has caused a conflict of interest to occur. Where such an event occurs, the persons involved cannot perform their duties appropriately due to conflicting interests with one of the parties within the situation.

Active Monitoring

Transak actively monitors instances where conflicts of interests may occur between:

• Transak and:
  • their shareholders or members;
  • any person directly or indirectly linked to the crypto-asset service providers or their shareholders or members by control;
  • members of their management body;
• their employees; or
• their clients; or
• their shareholders or members;
• any person directly or indirectly linked to the crypto-asset service providers or their shareholders or members by control;
• two or more clients whose mutual interests conflict.
  
  

Guidance

Transak understands certain situations or events may not clearly indicate whether a conflict of interest can occur and therefore it encourages all its employees to reach out to their direct manager or the Compliance officer in case they have any questions or uncertainties of how to treat or handle a specific situation.

The examples below are intended as a non-exhaustive list to provide guidance on what can be construed as indicative to a conflict of interests. When a situation similar to those exemplified below occurs Transak employees are required to report the instance, remove themselves from the situation and provide support to the relevant team assigned to investigate and manage the situation.

Conflicts of interest can occur in the form of:

• Self-dealing – happens when a person, typically a high-ranking official within a large company, takes advantage of their position to prioritize their own interests in a transaction, harming the company or its clients. This can involve using company funds or resources for personal gain at the expense of the business.
• Nepotism – favoritism granted to relatives or friends, particularly in the form of awarding jobs or benefits based on relationships rather than merit. This occurs when a person in a position of power within a company shows preferential treatment to family members due to their connection, rather than their actual qualifications.
• Excess compensation – often occurs in the nonprofit sector. It arises when an organization pays an employee significantly more than the compensation provided for similar roles within the organization or comparable roles in other organizations. Typically, the employee receiving excess compensation holds a high-ranking position and possesses substantial social or political influence.
• Multiple roles – a conflict of interest can arise when an individual holds multiple jobs within the same industry. This conflict can occur if one position provides access to confidential information, while the other does not, and this information is used to benefit the second job. This is particularly problematic if a non-disclosure agreement has been signed.
• Gifts or invitations – receiving gifts or invitations from external parties can create a conflict of interest, as it may improperly influence one's judgment, even if the gift is given without ulterior motive.
• Market abuse – practices, although quite specific, are considered to be a severe conflict of interest. This occurs when an individual artificially inflates the price of a security they own/manage/broker by leveraging their position to increase its value. Subsequently, the individual sells their shares at a profit.

Prevention and Mitigation Measures implemented by Transak

Transak understands its legal and ethical obligation to provide products and services to its customers untainted from any form of misconduct and or conflicts of interest. To ensure implementation of adequate practices to identify, prevent, manage and mitigate conflicts of interests of any type, it has put in place a number of measures.

The Compliance Function

The Compliance Function of Transak is responsible for constructing an adequate framework to allow the recognition of conflicts of interests, taking measures to avoid conflicts of interests, continuously monitoring such occurrences and, if necessary, adapting its Conflicts of Interests Policy to cover all instances having occurred or discovered after the implementation of mitigation measures and controls. A quarterly control will be carried out by the Compliance team to check the status of conflicts of interest (whether potential and apparent and recommended measures for identified conflicts of interest during the previous period). Additionally, the risk assessment framework in place includes specific metrics related to conflicts of interest and is intended to provide the Compliance function with sufficient data to ensure ample measures are implemented and monitored.

Compliance Controls

Products and services marketed by Transak are reviewed periodically by the Compliance team to ensure all legal and regulatory obligations to market such products and services in the jurisdictions of operations of Transak, including those pertaining to conflicts of interests are observed at all times. Such controls are conducted on a yearly basis or ad-hoc in case changes to the product/service or regulatory regime mandate it.

Confidentiality Areas

Transak has defined and maintains distinct confidentiality levels (e.g., Executive Management, Compliance, employees) to ensure information sharing adheres to the need-to-know principle. Documentation and reporting of all actions related to establishing, crossing or closing such areas are defined in a clear and transparent manner and are coordinated by the Compliance team.

Gifts & Invitations

Transak has established a code of conduct for its employees which defines conditions for accepting or granting gifts or invitations. Acceptance or granting of gifts or invitations that could influence business decisions, compromise independence, or lead to legal violations is prohibited. Employees are expected to familiarize themselves with the relevant internal policies and procedures to ensure understanding of processes, reporting obligations and expectations Transak has with respect to gifts and invitations (granting or receiving).

Remuneration Practices

The Transak Remuneration Policy has been put in place to clearly define and establish clear, transparent and fair remuneration practices. Additionally, rules regarding the granting of variable remuneration are put in place whereby specific evaluation is required before the approval of any type of variable remuneration to be granted to an employee.

Personal Account Dealings

Transak has put in place certain reporting obligations where employees are required to disclose any transaction they have made which can be construed as market abuse. Moreover, wallets known to be associated with Transak employees are monitored periodically to ensure their transactions abide by internal policies. The distinction between banking secrecy rights of employees and personal dealing account monitoring is defined in the Anti Market Abuse Policy.

Related Persons / Business Partners

Transak via its corporate dealings with service providers, customers, business partners and other entities, may be party to actual conflicts of interest. To ensure appropriate mitigation measures and disclosures are in place, the following measures will be observed:

• Any product or service offered by a third party will undergo the same product testing, review and approval processes as any products/services of Transak;
• Self-recusing or reallocation of duties and responsibilities of employees involved or potentially associated with the third party will be implemented;
• Any instances of conflicts of interests raised by a customer pertaining to a third party will be raised both internally and externally for investigation and disclosure;
• Transak will implement, maintain and review periodically a conflicts register where details of all reported and investigated conflicts of interests and misconduct are recorded. This register will incorporate the details of the instance/event, the reporter, investigator, timelines and circumstances of occurrence, reporting, investigation, remediation measures if any and monitoring status including reporting to the Board of Directors.
  
  

Management of Conflicts of Interests within Transak

Potential conflicts of interests

Where a conflict of interest has been identified to potentially materialize within Transak, the Compliance team will issue a Compliance Opinion containing the circumstances surrounding the potential conflict of interests and recommendations to prevent and mitigate the situation.

Such measures may include, but are not limited to:

• recusing the person related to the situation from any process related to the product/service/third party communication/decision making process;
• terminating the respective relationship (whether with the customer or service provider);
• continuation of the activity/provision of products and services under certain conditions and monitoring the activity for a determined or undetermined period.

Actual conflicts of interest

When an actual conflict of interest is identified, this will be recorded in the Conflicts Register immediately and an investigation will be launched to determine the circumstances, gravity and associated repercussions of such occurrence. Depending on the type of conflicts of interest and conclusions of the investigations, external disclosures will be made externally including mitigation and monitoring measures implemented as well as to the Board of Directors.

Remediation measures may include, but are not limited to:

• recusing the person related to the situation from any process related to the product/service/third party communication/decision making process;
• terminating the respective relationship (whether with the customer or service provider);
• continuation of the activity/provision of products and services under certain conditions and monitoring the activity for a determined or undetermined period.

Disclosure Obligations

Transak is required to disclose any conflicts of interests where the procedures or measures defined in its internal policies have been deemed inadequate to ensure with sufficient certainty that their interests are not impaired are disclosed to the customer.

Any conflicts of interests identified to be detrimental to the interests of a customer, an employee, a director, a business partner or service provider of Transak will be disclosed publicly in accordance with its legal obligations.

Reporting

Employees are required to report any instance of misconduct or conflicts of interest they are involved or privy to immediately via email or available communication channels to the Compliance Officer.

Failure to comply with this obligation may have disciplinary and other legal consequences.