Virtual Assets Standards Policy

Last updated: October 2025

Purpose and Scope

This Policy establishes the governance, control framework, and operational standards governing the issuance, maintenance, and ongoing oversight of USAFi, an Asset-Referenced Virtual Asset (ARVA) fully backed by ETF units of the Atlas America Fund. It ensures Atlas AI Labs FZE complies with the Dubai Virtual Assets Regulatory Authority (VARA) requirements under:

Issuance Rulebook,
Market Conduct Rulebook — Rule VIII (Virtual Asset Standards),
Compliance & Risk Management Rulebook, and
Technology & Information Rulebook.

This Policy applies to:

Activities: all issuance, burning, redemption, custody, and settlement activities concerning USAFi.
Personnel: all personnel involved in VA Activities, including management, operations, compliance, risk, technology, and finance.
Systems: all third-party systems used to support the issuance process (Fireblocks, SoftLedger, LeanTech, etc.).

Atlas AI Labs FZE maintains, and periodically updates, a documented policy (Whitepaper) describing how USAFi derives and maintains its value, including the type, composition and any permitted changes in the Reference Assets.

Governance and Oversight

Governance Structure

Function	Responsibility
Board of Directors	Ultimate accountability for approval of this Policy, oversight of USAFi issuance, reserve sufficiency, and regulatory compliance. Responsible for appointing the independent third-party auditor for the Reserve Assets.
Chief Executive Officer (CEO)	Day-to-day responsibility for implementation of this Policy and resource allocation.
Chief Compliance Officer (CCO)	Ensures full adherence to VARA rules; maintains the Issuance Register and VA Assessment Scorecards; coordinates notifications to VARA.
Money Laundering Reporting Officer (MLRO)	Conducts AML/CFT due-diligence reviews on issuance and redemption participants and monitors transactional flows.
Chief Information Security Officer (CISO)	Oversees smart-contract integrity, Fireblocks custody configuration, and DLT security reviews.
Chief Risk Officer (CRO)	Provides independent risk assessment of issuance, liquidity, and market exposures.

Committees and Approvals

Issuance Committee: reviews USAFi assessment results and approves any parameter changes (e.g., collateral composition).
Risk & Compliance Committee: quarterly review of assessment results, audit findings, and regulatory correspondence.

Segregation of Duties

To mitigate operational risk and conflicts of interest:

The functions of issuance approval, custody management, and reconciliation will be performed by separate individuals.
Fireblocks transaction policies enforce multi-signature approval (minimum two authorizations — CO and Finance Officer).

Accountability and Reporting

Atlas AI Labs FZE has appointed an independent third-party auditor to conduct, at least every six (6) months, an audit of:

the number and value of USAFi tokens in public circulation; and
the composition and value of the Reserve Assets. An annual audit of the financial statements shall also be commissioned.

The Compliance Officer will report quarterly to the Board on:

Adherence to VA Standards;
Results of ongoing assessments and reconciliations;
Incidents, trigger events, and VARA notifications; and
Recommendations for policy enhancement.
Submit an attestation of the accuracy of the independent audit to VARA.

Virtual Asset Standards Framework

Atlas AI Labs FZE establishes and applies comprehensive Virtual Asset Standards (VA Standards) for USAFi to ensure continuous compliance with VARA. These standards govern both pre-issuance assessment and ongoing monitoring of the asset and its underlying reference holdings. Atlas AI Labs FZE ensures that the terms and conditions governing USAFi — including valuation methodology, issuance and redemption processes, settlement timelines, and liquidity management — reflect, to the extent possible, the operational mechanics, pricing methodology, and settlement practices of the underlying ETF and its reference markets. The structure of USAFi is designed to ensure that issuance, redemption, and pricing activities remain consistent with the functioning of the underlying ETF and do not create distortions, inefficiencies, or adverse impacts on the underlying market. Atlas AI Labs FZE conducts periodic and event-driven reviews to ensure that USAFi terms and conditions — including valuation methodology, issuance and redemption processes, and settlement mechanisms — remain aligned with the evolving operation and practices of the underlying ETF and its reference markets. Such reviews take into account changes in ETF structure, market conditions, liquidity profile, and applicable regulatory or operational developments. Any misalignment identified through such reviews shall be escalated to the CCO and CRO, with authority to recommend adjustments, suspension, or remediation measures to ensure continued alignment with the underlying ETF market.

Application of Virtual Assets Standards Criteria

VARA Requirement	Internal Assessment Methodology	Responsibility	Thresholds / Red Flags
Market Capitalisation & Liquidity	Not applicable to self-issued ARVA; instead monitor ETF Net Asset Value (NAV) and daily redemption ratio	CCO	NAV variance > 2% from token supply value for > 24 h
Design, Features & Use Cases	Review of smart-contract design and intended use; ensure token represents only ETF units with no embedded leverage or governance rights	CISO	Any non-ETF linkage or smart-contract modification
Compliance Impact (AML/CFT, Sanctions, Securities, IP)	Conduct legal and regulatory analysis prior to launch; MLRO screens issuance/redemption flows, including periodic reassessments and continuous monitoring of transactional flows to identify and report suspicious activities	CCO/MLRO	Match with sanctioned party list → halt issuance
Regulatory Treatment & Approvals	Confirm VARA classification as ARVA; monitor global regulatory statements quarterly	CCO	Any regulatory prohibition → immediate suspension
Prohibition by Authorities	Continuous watch of VARA and foreign blacklists	CCO	Listing of USAFi or ETF by authority → delisting
Security & Immutability of DLT	Quarterly Fireblocks and smart-contract security review; external audit annually	CISO	Critical vulnerability unpatched > 48 h
Future Development (Roadmap)	Maintain product roadmap approved by Board; any change requires Impact Assessment	CCO	Material change to issuance logic without approval
Susceptibility to Price Manipulation	Analyse secondary-market data (if listed), ETF liquidity, and potential misalignment between USAFi and ETF pricing	CRO/CCO	Concentration > 50% held by one entity
Conflicts of Interest	Maintain Conflicts Register; disclose holdings of Atlas Group in ETF assets	CCO	Undisclosed related-party exposure
Issuer Background	Due diligence on Atlas America Fund and its managers	CCO	Adverse regulatory findings
Enforceability of Rights	Legal opinion on ETF custody agreements and redemption mechanics reviewed annually	Legal Counsel	Opinion lapse > 12 months without renewal
Sufficient Assets Available	Daily SoftLedger reconciliation of ETF units vs on-chain tokens	CFO	Discrepancy > 0.1% > 24 h
Correlation to Underlying Market	ETF NAV monitored against market indices and USAFi pricing to ensure alignment with ETF market behaviour and pricing dynamics; review quarterly	CFO	Divergence > 2% over 7 days
Disclosure of VA Standards	Publish VA Standards on Atlas Labs website (in machine-readable form); update within 5 days of change	CCO	Non-updated posting > 5 days after revision
Underlying Market & Avoidance of Adverse Impact	Ensure USAFi terms (including valuation based on ETF NAV, issuance/redemption mechanics, and settlement processes) are designed in line with ETF market practices. Prior to large issuance or redemption events, conduct impact assessments considering ETF liquidity, trading volumes, and market conditions. Monitor for price dislocation and arbitrage between USAFi and the ETF	CCO / CRO	Abnormal ETF price movement linked to USAFi activity; significant deviation between USAFi price and ETF NAV; issuance/redemption size materially large relative to ETF liquidity without prior assessment
Periodic Review of Alignment with Underlying Market Practices	Conduct quarterly and event-driven reviews to ensure USAFi terms, valuation (NAV), issuance/redemption, and settlement processes remain aligned with ETF market practices. Event triggers include changes in ETF structure, liquidity conditions, or regulatory developments	CCO / CRO	Misalignment between USAFi terms and ETF operations; changes in ETF structure not reflected in USAFi; delayed update following material market or regulatory change

Internal Scoring Methodology (VA Assessment Scorecard — VAAS-01)

Scoring Approach

Each criterion is assigned a score (1–5) and weighting according to risk impact. The weighted average determines overall adherence to Atlas Labs VA Standards.

1 = Low Risk / Strong Adherence
3 = Moderate Risk / Requires Monitoring
5 = High Risk / Non-Adherent — Trigger Event

Weighing and Thresholds

Category	Weight (%)	Acceptance Criteria
Compliance & Regulatory	25%	Must score ≤ 2.5
Legal Enforceability	15%	Must score ≤ 3
Technology Security	20%	Must score ≤ 2
Market Integrity	15%	Must score ≤ 3
Reserve Adequacy	25%	Must score ≤ 2

A final weighted average > 3.0 constitutes a Trigger Event, prompting immediate review and possible suspension.

Assessment Workflow

Initial Assessment: conducted by CCO and CFO prior to issuance launch.
Quarterly Review: repeating scoring with updated data from SoftLedger and Fireblocks logs.
Event-Driven Review: initiated upon regulatory change, ETF suspension, security incident, or price volatility beyond defined tolerances.
Documentation: results logged in the VAAS-01 template and retained for 8 years.
Approval: Issuance Committee / Board approval required for continuation if score > 3.0.

Application of Virtual Asset Standards

Atlas AI Labs FZE applies its Virtual Asset Standards through a structured, documented, and risk-based internal assessment process designed to ensure that each Virtual Asset meets the requirements of the VARA Market Conduct Rulebook prior to issuance and on an ongoing basis. The standards are operationalized through the VA Assessment Scorecard (VAAS-01) and the internal scoring, weighting, and escalation methodology described above. The assessment process translates qualitative regulatory criteria into measurable indicators, thresholds, and governance actions, enabling Atlas to:

evaluate whether a Virtual Asset satisfies regulatory, legal, operational, and risk requirements prior to issuance;
monitor continued compliance on a periodic and event-driven basis;
identify trigger events requiring escalation or remediation;
determine whether issuance may proceed, continue, be suspended, or be discontinued.

Responsibility for assessment, review, and escalation is assigned to designated control functions, including Compliance and Finance, with final oversight exercised by the Issuance Committee or Board, as applicable. All assessments, decisions, and supporting evidence are documented and retained in accordance with record-keeping requirements and are made available to VARA upon request.

Token Issuance, Minting and Burning Controls

Issuance Conditions

Tokens will only be minted following confirmation that ETF units of equivalent value have been credited to Atlas Labs’ designated reserve account.
CFO verifies asset receipt in SoftLedger; CCO authorizes minting via Fireblocks multi-sig.
Smart contract parameters (pre-audited and VARA-notified) shall define maximum supply and burn functionality.

Burn and Redemption

Tokens redeemed for ETF units are burned immediately upon completion of redemption settlement.
Burn transactions are executed under Fireblocks multi-sig policy and logged for audit.

Custody and Key Management

Fireblocks platform configured with segregated vaults for issuance and operational wallets.
Key management policies require minimum 2–3 signatures; private keys never stored outside HSM modules.
Wallet access rights are reviewed quarterly by CISO and CCO.

Provisions for Redemption Rights and Direct Claim

The legal structure governing the ETF reserve assets will ensure that these assets are held in a segregated custodial account, legally separate from Atlas AI Labs FZE’s operational and treasury accounts, thereby maintaining full bankruptcy remoteness.
Each USAFi token holder will have an enforceable, direct legal claim against the underlying ETF reserve assets in the event Atlas AI Labs FZE is unable to process redemption or becomes insolvent.
Custody or trust agreements governing the ETF reserves will explicitly establish token holders as the ultimate beneficial claimants, guaranteeing redemption parity at all times.
The redemption process shall provide token holders the right to redeem USAFi for an equivalent value denominated in AED, calculated against the corresponding ETF NAV, without any additional redemption fee charged by Atlas AI Labs FZE, and only subject to any unavoidable third-party costs (for example, network gas fees) as permitted by VARA.

Redemption Process and Timeline

Atlas AI Labs FZE will ensure that USAFi holders may, at all times, redeem their tokens either:

directly against Atlas AI Labs FZE as Issuer, or
against the Reserve Assets in the event Atlas AI Labs FZE is unable to process and complete redemption requests.

Redemption requests will be processed and completed within a reasonable period following receipt of a valid request and successful onboarding of the holder, in line with the timelines and mechanics disclosed in the Whitepaper and client documentation. Detailed redemption procedures, including eligibility, operational steps, and contact channels, are documented in the VA Whitepaper.

Reserve Asset Management

Atlas AI Labs FZE shall, at all times, manage the Reserve Assets effectively and prudently in accordance with Rule III.C of the ARVA Rules, at least by:

maintaining Reserve Assets only with custodians or other entities which are duly authorized, regulated and qualified to hold such assets, in accordance with applicable laws, regulations and VARA requirements (BNY Mellon);
ensuring that Reserve Assets are at all times held in segregated accounts, legally and operationally separate from Atlas AI Labs FZE’s own funds (including operational and treasury accounts) and from any other client assets, and that such segregation is reflected in all custody, trust and account-opening documentation;
ensuring that any newly added Reserve Assets are transferred to and held in custody with such authorized custodians in accordance with clause 1 above by no later than the time period stipulated by VARA as a condition of Atlas AI Labs FZE’s approval to issue USAFi;
maintaining and implementing written policies and procedures to ensure that Reserve Assets can be promptly accessed, realized and, where applicable, converted into AED as necessary to process and complete redemption requests in accordance with Rule III.E of the ARVA Rules and the redemption sections of this Policy, including during stress, suspension or delisting events;
conducting regular, risk-based assessments of the adequacy and composition of the Reserve Assets — including credit quality, liquidity, concentration and market risk — using the VA Standards Framework and VAAS-01 scorecard, at least on a quarterly and event-driven basis, to ensure ongoing compliance with Rule III.C of the ARVA Rules and to identify any Trigger Events requiring escalation, remediation or suspension.

Implementation, Monitoring, and Control

Ongoing Assessment and Monitoring

Atlas AI Labs FZE shall regularly and on an ongoing basis assess relevant information to ensure that USAFi continues to meet the VA Standards. This is achieved through: Daily Reconciliation

SoftLedger reconciles issued USAFi tokens against ETF holdings.
Any discrepancy > 0.1% triggers immediate escalation to CCO and CFO.

Automated Monitoring

Fireblocks logs monitored for unusual transaction patterns, failed authorizations, or unauthorized key access.
Alerts routed to CCO, CRO, and CISO.

Scheduled Reviews

Quarterly formal review of VAAS-01 scores.
Compliance, Finance, and CISO teams jointly verify scoring, thresholds, and risk classification.
Assessment of continued alignment between USAFi terms and conditions and the operational practices of the underlying ETF, including valuation, issuance/redemption mechanics, and settlement processes.

Trigger-Based Reviews

Regulatory changes impacting USAFi or ETF;
Security incidents, critical vulnerabilities, or suspected DLT exploits;
Market deviations or redemption issues;
Material deviations in ETF NAV or reserve holdings;
Changes in ETF structure, trading conditions, liquidity profile, or market practices that may impact the alignment of USAFi with the underlying market.

Record Keeping

All assessment records, reconciliation logs, audit reports, and VARA notifications are retained for eight (8) years. Records are stored securely in both digital and backup formats and available for VARA inspection upon request.

Suspension and Delisting Procedures

Conditions for suspension include:

Trigger events identified in VAAS-01 scoring;
Regulatory prohibition by VARA;
Critical security vulnerability;
Reserve shortfall or ETF operational suspension;
Evidence that USAFi issuance or redemption activity may adversely impact the underlying ETF market, including liquidity disruption, abnormal volatility, or material deviation from ETF NAV.

When a potential suspension/delisting trigger is identified, Atlas AI Labs FZE will follow these procedures:

Trigger Identification & Immediate Assessment — The responsible team (e.g. Risk, Compliance or Operations) logs the event, confirms it meets one or more suspension conditions, and performs an initial impact assessment (affected clients, systems, Reserve Assets, regulatory obligations).
Decision by C-Suites — The event is escalated to the CEO, CCO, CRO and CFO within 24 hours. Senior Management / Issuance Committee decides whether to (i) continue operations with enhanced monitoring, (ii) temporarily suspend new issuance or other activities, or (iii) initiate delisting.
Client Notification — If suspension or delisting is approved, Atlas prepares client communications explaining the reason, impact on USAFi (including redemptions), and expected next steps. Holders are notified within 48 hours, with instructions for redemption or withdrawal, issued in coordination with VARA directions (see VARA Notification below).
Operational Controls & Asset Handling — Atlas immediately applies technical and operational controls (e.g. pause minting/burning, restrict smart-contract changes), secures and reconciles Reserve Assets, and ensures that token holder rights and redemption processes are protected and can continue in an orderly manner.

VARA Notification

VARA is notified immediately after a Trigger Event or discovery that USAFi no longer meets VA Standards. Atlas AI Labs FZE implements any VARA-directed steps to minimize adverse client impact.

Training and Awareness

Atlas AI Labs FZE is committed to fostering a culture of compliance regarding Virtual Asset Standards.

The Chief Compliance Officer (CCO) is responsible for ensuring comprehensive training on the obligations outlined in this Policy, the VARA Issuance Rulebook, and all relevant AML/CFT standards.
Initial Training: All Covered Persons will receive initial training promptly after policy approval or upon joining the company, whichever is later.
Refresher Training: Annual refresher sessions will be conducted for all Covered Persons to ensure continued understanding of evolving regulatory requirements and industry standards.
Training Log: The CCO will maintain a detailed log of all training sessions or educational programs conducted, capturing the date, participants, topics covered, and learning objectives for audit purposes.

Policy Adherence Monitoring and Reporting

The Chief Compliance Officer (CCO) is tasked with overseeing the adherence of Covered Persons to the processes and obligations outlined in this Policy. Annual Reporting: At least annually, the CCO will submit a comprehensive report to the Board of Directors and the Risk & Compliance Committee, documenting:

Any instances of non-compliance with the VA Standards.
The remedial actions taken to address non-compliance.
The implementation of new controls and mechanisms to enhance future compliance.

This systematic monitoring ensures the continual alignment of personnel with established policies and fosters a culture of accountability and regulatory compliance.

Disclosure and Transparency

Atlas AI Labs FZE maintains transparency in accordance with Rule VIII.A.3: Website Publication

VA Standards (VAAS-01 methodology, scoring criteria, responsibilities).
Smart contract address, audit reports, and Fireblocks custody overview.
Redemption terms, ETF reference details, and reserve attestations.

Update Frequency

Updates within 5 business days following a material change in standards, procedures, or regulatory guidance.

Machine-Readable Data

All public disclosures are in a format allowing automated retrieval by clients and VARA.

Conflicts of interest relating to the constitution or management of Reserve Assets, including any Atlas Group exposure to the ETF, will be publicly disclosed in website disclosures and the Whitepaper.

Recordkeeping and Reporting

Atlas AI Labs FZE maintains a dedicated Issuance Register as part of its mandatory recordkeeping framework under the VARA Rulebooks. The Register provides a complete, auditable record of all issuance-related activities and controls. It is securely maintained within Atlas AI Labs FZE’s compliance systems and subject to regular internal audit review. The Issuance Register shall record, at a minimum, the following information:

Total USAFi Tokens Issued and Burned: Detailed logs of each minting and burning transaction, including transaction hash, date, time, and authorised signatories.
ETF Reserve Holdings and Reconciliation Results: Daily reconciliations between on-chain USAFi supply and off-chain ETF units as verified through SoftLedger, including variance reports and escalation records.
VAAS-01 Assessment Scores and Approvals: Results of all initial and periodic Virtual Asset assessments, including scoring sheets, responsible assessors, and management approvals.
Regulatory and Client Communications: Copies of all notifications, disclosures, and communications to VARA and clients related to issuance, suspension, delisting, or redemption activities.

All records in the Issuance Register shall be retained for a minimum of eight (8) years and made available for inspection upon VARA’s request.

Policy Review and Updates

This Policy is formally reviewed annually or upon:

Regulatory changes by VARA or other competent authorities.
Material change in USAFi design, issuance mechanics, or technology platform.
Any significant incident or trigger event requiring policy amendment.

Updates are approved by the Board and communicated to all relevant personnel.

​Purpose and Scope

​Governance and Oversight

​Governance Structure

​Committees and Approvals

​Segregation of Duties

​Accountability and Reporting

​Virtual Asset Standards Framework

​Application of Virtual Assets Standards Criteria

​Internal Scoring Methodology (VA Assessment Scorecard — VAAS-01)

​Scoring Approach

​Weighing and Thresholds

​Assessment Workflow

​Application of Virtual Asset Standards

​Token Issuance, Minting and Burning Controls

​Issuance Conditions

​Burn and Redemption

​Custody and Key Management

​Provisions for Redemption Rights and Direct Claim

​Redemption Process and Timeline

​Reserve Asset Management

​Implementation, Monitoring, and Control

​Ongoing Assessment and Monitoring

​Record Keeping

​Suspension and Delisting Procedures

​VARA Notification

​Training and Awareness

​Policy Adherence Monitoring and Reporting

​Disclosure and Transparency

​Recordkeeping and Reporting

​Policy Review and Updates