Custody and Administration Procedure: Summary

1. Introduction and Purpose of the Procedure

YouHodler Italy S.r.l. (the “Company” or “YHIT”) is committed to providing secure, state-of-the-art custody and administration services for cryptocurrencies and related funds.
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Our priority is to protect our clients’ assets from unauthorized access and to safeguard their ability to always access and exercise their rights over such assets. To achieve this goal, YHIT implements the most advanced and cutting-edge security technologies and protocols, ensuring the integrity, confidentiality, and availability of our clients’ assets.
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The Company understands the importance of maintaining trust in the cryptocurrency custody sector and is committed to upholding the highest standards of integrity and security and ensuring compliance with all applicable regulatory requirements. For this reason, YHIT has drafted a YHIT Custody Policy that outlines the rules and procedures the Company has in place to ensure the safeguarding of client assets and funds and to prevent any unauthorized use of client assets for personal gain.
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In addition to the above, this summary of the Custody Policy (the “Summary”) provides an overview of the key aspects of the Custody Policy, ensuring that clients have a clear understanding of how their assets are managed and protected: It contains a description of the services offered by YHIT to clients, outlines the processes and controls in place to ensure that client assets are protected from unauthorized use, accurately tracked, and operationally and legally segregated from YHIT’s assets. It also details clients’ rights regarding their assets and the procedures followed by YHIT to manage, transfer, and report on these holdings. YHIT custody service clients are also referred to the terms and conditions governing the provision of custody services by YHIT. YHIT recognizes the critical role it plays as a custodian and is committed to maintaining a transparent relationship with clients.

2. Asset Segregation and Custody

YHIT adheres to strict asset segregation practices to ensure that clients’ crypto-assets are held securely and operationally separated from YHIT’s assets. This segregation is essential to protect clients’ assets and maintain transparency in custody operations, ensuring transparency and effectively preventing any risk of misappropriation, commingling, unauthorized access, or misuse.
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The Company generates both individual wallet addresses (“Hot Wallets”)  and collective (omnibus) accounts (“Cold Storage”), depending on the type and purpose of custody. Each client’s assets are managed within an omnibus account linked to the respective blockchain protocol but are tracked individually through YHIT’s internal ledger system. This system ensures that the integrity of each client’s holdings is preserved. In addition to operational segregation, YHIT employs advanced security measures, including multi-signature wallets, encryption, and regular audits, to safeguard assets. These measures are complemented by a robust operational framework that includes strict access controls, regular reconciliations, and continuous monitoring of all custody activities.
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To protect the blockchain infrastructure from cyberattacks, clients are not permitted to deposit assets directly into omnibus accounts, as a significant portion of client assets may be held there.
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For additional security reasons, only the Company’s omnibus accounts are whitelisted on exchange accounts and within the operating systems of external custodial service providers: For these reasons, YHIT has implemented a dedicated system for standard access controls and, in addition to this, employs a multisignature (multisig) system as a critical layer of protection for its crypto-asset storage infrastructure. Furthermore, strong password policies are enforced throughout the organization.
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All these measures combined (multisig controls, multi-factor authentication, strict role-based access, and strict password enforcement) form a resilient security framework to safeguard the integrity, confidentiality, and availability of client assets.

3. Client Rights and Asset Management through the Position Register

The custody policy ensures that protecting each client’s rights to their crypto-assets is a priority.
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Each client’s rights to their assets are reflected in a detailed position ledger maintained by YHIT.
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This ledger records each client’s specific holdings, tracking all transactions, including deposits, withdrawals, and transfers. The ledger is continuously updated to ensure it accurately reflects the client’s holdings at any given time, providing a clear and transparent view of their asset positions.
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This tool ensures that any movement affecting a client’s assets is promptly recorded and that each client’s ownership is clearly defined and respected: clients have full visibility into their holdings through the secure client portal, where they can view detailed reports of their positions, transaction history, and any relevant updates. The Company will provide the client with their transaction history once per quarter, and the statement will include the assets held, the value of the assets, and the balance, as well as the transactions carried out during the period in question.

4. Transaction Management

YHIT has developed and implemented secure and efficient transaction management for its custody services.
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All asset movements, including deposits, withdrawals, and transfers, are conducted with the highest levels of security and accuracy to ensure the integrity of client holdings. When a client initiates a transaction—whether moving assets within or outside their account—the process is governed by rigorous internal controls: these controls include multi-level authorization procedures, thorough verification of client instructions, and the use of secure communication channels to prevent unauthorized access or fraudulent activity.
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Asset movements are recorded in real time within YHIT’s internal accounting system, ensuring that the position ledger remains up to date and accurately reflects each client’s current holdings. This real-time monitoring enables timely reconciliation and minimizes the risk of discrepancies between client instructions and actual asset movements.
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All transactions are subject to continuous monitoring and review to ensure compliance with regulatory requirements and internal policies.

5. Compliance and Risk Mitigation

YHIT operates within a robust compliance framework that aligns with the latest regulatory standards, including MiCA. Compliance is fundamental to all custody operations, ensuring that client assets are managed in accordance with legal requirements and industry best practices.
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YHIT’s risk management procedures are designed to identify, assess, and mitigate risks associated with the custody and administration of crypto-assets: the Company continuously monitors and assesses risks associated with custody services, particularly the custody of crypto-assets.
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Appropriate risk mitigation strategies are in place to address potential threats and vulnerabilities, and regular training and awareness programs focused on cybersecurity and fraud are conducted for employees to enhance their knowledge of security practices.
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To maintain high standards of compliance, YHIT conducts regular audits to review and verify that all custody activities meet regulatory and policy requirements.

6. Reporting and Transparency: Communication and Customer Support

YHIT is committed to maintaining transparency in its custody operations by providing clients with comprehensive and timely reports on their crypto-asset holdings. These reports are designed to provide clients with clear information on the status of their assets, including detailed information on account balances, transaction history, and any movements within their portfolios.
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There is a secure online portal through which clients can access, view, and download reports at any time. The portal provides real-time updates on asset positions, allowing clients to monitor their holdings and review past transactions with ease: this level of transparency ensures that clients are always informed about the status of their assets, fostering trust in the custody services provided.
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Reports are generated using secure systems that protect client data and maintain the confidentiality of all information.
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To ensure that clients are well-informed and supported in all aspects of their crypto-asset custody experience, YHIT offers several channels through which clients can reach out, including email (and the secure online portal described earlier in this summary), ensuring that assistance is always readily available.
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In addition to routine communications, YHIT offers dedicated support for any questions or issues that may arise: the customer support team is trained to handle a wide range of inquiries, from basic account management to more complex questions regarding custody operations and asset movements. For more specific issues, customers have access to expert support staff who can provide detailed explanations and guidance.
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In any case, the Company will not make any claims or exercise ownership rights over client assets without explicit authorization and protects client assets from any third-party claims