Fork Policy

1. GLOSSARY

Accepted Virtual Asset (AVA)	The Virtual Assets permitted to be traded on the MTF, as set out in and in accordance with the MTF Rules and the Virtual Assets in respect of which Ousoul is an Authorised Person for the purposes of providing Custody.
Airdrop	Airdrop is the name given to an event that occurs when a blockchain issues a new virtual asset using known addresses from another blockchain.
Audit and Risk Committee	The Firm’s Audit, Risk and Compliance Committee is comprised of at least three and maximum five Non-Executive, Independent Directors and Senior Management permanent attendees. The Chairman of the Board shall be a member of the ARC Committee. It reviews, and reports to the Board on, amongst other things as indicated in the ARC Committee’s terms of reference.
Client	Any Applicant granted a right of access to and use of the MTF, and whose access or use has not been terminated
Contentious Hard Fork	Typically occur when there is a disagreement within a community (i.e miners). The two disagreeing factions will fork the chain and implement the changes they desire on their respective chains.
Distributed Ledger Technology (DLT)	A system in which a record of transactions made by Virtual Assets and are maintained across several computers that are linked in a peer-to-peer network.
Fork	A change in original protocol of a software i.e when the original blockchain splits into separate chains due to functionality improvements or updates.
FSRA	Financial Services Regulatory Authority
Bid Order	An Order constituting an offer to buy a quantity of an Accepted Virtual Asset or Stablecoin;
Hard Fork	Happens when the underlying blockchain protocol is changed and is no longer compatible with older versions. The result is two concurrent, mutually exclusive and incompatible blockchain branches with the same historical blockchain root. Each new blockchain branch is operated by different sets of nodes based on what version node operators choose to support, respectively.
Platform	Ousoul's user interface providing Clients with access to the Services and includes website (the “Website”) and or the API (the "API") as well as any other medium for provision of Services by Ousoul and any online communication tool operated within the Platform for notification to Clients and for management of Client information.
Services	The provision by Ousoul of access to and use of the MTF and/or Custody Service
Soft Fork	Happens when the underlying blockchain protocol changes but maintains backward compatibility with the old version. Transactions may be still be validated by nodes on the old protocol, but those that have not been upgraded to the new protocol may be rejected from adding new blocks to the network, or may not be able to access new functionality, and as such would be encouraged to upgrade
Status page	Refers to the Firm’s Platform Status page. It can be accessed at https://ousoul.com/exchange_status/
Uncontentious Hard Forks	Protocol changes that have been planned and agreed to by the community without any significant disputes
Virtual Asset	A digital representation of value that can be digitally traded and functions as (1) a medium of exchange; and/or (2) a unit of account; and/or (3) a store of value, but does not have legal tender status in any jurisdiction.

2. INTRODUCTION

The Fork Policy (“this Policy”) has been designed to set out the arrangement of Ousoul Limited (“the Firm”) to any changes of protocol of the listed Accepted Virtual Assets (AVA) on the platform.

This Policy applies to the current AVAs offered and listed by Ousoul through its platform.

This Policy covers any changes in a blockchain protocol which can either be “Soft Fork” or “Hard Fork”.

For the purposes of this document, Ousoul treats Airdrops and Forks similarly and the evaluation and support of the new value will be determined based on Ousoul Fork Policy.

3. FORKS

A Fork occurs when an underlying blockchain protocol changes such that there is a divide in the blockchain due to functionality changes, improvements or updates. These changes may or may not be based upon consensus among nodes/miners that verify transactions.

“Soft Fork” happens when the underlying blockchain protocol changes but maintains backward compatibility with the old version. Transactions may still be validated by nodes on the old protocol, but those that have not been upgraded to the new protocol may be rejected from adding new blocks to the network, or may not be able to access new functionality, and as such would be encouraged to upgrade.

“Hard Fork” happens when the underlying blockchain protocol is changed and is no longer compatible with older versions. The result is two concurrent, mutually exclusive and incompatible blockchain branches with the same historical blockchain root. Each new blockchain branch is operated by different sets of nodes based on what version node operators choose to support, respectively.

In this case Hard Fork, wallets holding the Virtual assets on the blockchain will now have duplicate, mirrored assets on each of the two blockchain branches. Both Bitcoin & Bitcoin Cash are Virtual assets for example and are the result of a Hard Fork. Uncontentious Hard Forks do not result in new assets and the change is accepted by the consensus of the blockchain network.

4. APPLICATION OF FORKS

Any upcoming blockchain fork will be carefully evaluated by the technology and operations teams then will be presented to the Firm’s Risk & Audit Committee and the new Virtual Asset will be subject to the FSRA approval, as applicable.

In the process of a Contentious Hard Fork, any new virtual asset will not be supported by Ousoul unless the virtual asset is approved to be an AVA.

Ousoul will inform clients via a notification on the status page or a pop-up message on the Platform regarding the upcoming fork, its impact [on deposit/withdrawal, MTF trading, Clients’ AVA custody] and risks associated with it. Clients that are subscribed to the Ousoul’s status page will receive an email about the fork event.

In the event of a Contentious Hard Fork, any new virtual asset will not be automatically supported by Ousoul due to the fact that it must be assessed in line with VA Compliance Policy and subsequently approved by the FSRA. Therefore, Clients [those who wish to benefit from a new VA] shall be requested to withdraw their AVA balance from Ousoul’s Custody prior to the fork event.

5. REGULATORY IMPLICATIONS

Ousoul is restricted from using, or allowing the use of, any other Virtual Asset apart from the AVAs. The Firm will only allow custody and trading of Virtual Assets where they are accepted by the FSRA (FSRA may change these criteria from time to time) as per the criteria below:

1. Maturity / Market Capitalization
2. Security and Operation
3. Traceability / Monitoring
4. Exchange Connectivity and Demand
5. Type of Distributed Ledger Technology (DLT)
6. Innovation and Efficiency
7. Practical application and functionality

For more details on the criteria for acceptance, please see the Ousoul VA Compliance Policy.

The technology and operations team will also consider some additional items detailed in Section 7 of this document in relation to forks, including but not limited to:

1. The level of demand for trading of the Virtual Assets on each fork branch and the long-term expectations for such demand, which will require ongoing monitoring and periodic revaluation.
2. The support of the forked branches for sustaining and growing one or both new blockchain branches.
3. The security protections implemented in the chain or protocols, such as replay protection post forks events to prevent replay attacks.

6. PROCESSING AND SUPPORTING FORKS

When considering how to support the Fork, Ousoul will consider the impact on existing blockchain wallet systems, security and the need for upgrades or other modifications.

For Soft Forks, an upgraded version of the platform will be deployed after testing for the forked blockchain and the upgraded software will be released.

For Hard Forks, several checks and reviews are to be considered as mentioned in Section 5. Also, to offer the new Virtual Asset resulting from the fork (if applicable), Ousoul must be able to support the fork from a technology standpoint.

While the specific features and circumstances of a fork and the new blockchain will determine the exact process to be followed, as a practical matter it is expected that it will involve the following:

1. Pause withdrawals and deposits of the Virtual Asset. Clients will be notified via the platform when deposits and withdrawals are not permitted. The timeline will be determined on an individual basis to ensure there is adequate time allowed to assess the security and viability of the network.
2. The Firm will also suspend trading following the suspension of deposits and withdrawals to fully account the Accepted Virtual Assets. Clients will be notified via the platform when trading on the platform is not permitted.
3. The Firm will take a snapshot of the existing VA balances immediately after the deposits, withdrawals and trading are paused.
4. When network conditions stabilize, Ousoul will notify client of the expected date and time to re-enable transactions and trading for the existing AVA
5. Ousoul may clear the order book before re-enabling trading for the VA.
6. If it is determined after the fork to offer trading for the new VA, based on the balance of the original AVA in each client’s account at the time prior and immediately after the fork, the Firm will determine the amount of the forked AVA owed to each client and update the client’s balance accordingly.

The Firm will provide notification directly via platform of its decision to support a forked Virtual asset, whether before or after the fork occurs, prior to the date on which it will credit the relevant client account if applicable.

7. ADDITIONAL CRITERIA

7.1. Custodians

Ousoul has testnet access for all applicable 3rd parties to test the forks ahead of the livenet releases and will base their decisions taking into account the support afforded to Ousoul.

7.2. Traceability

Ousoul uses blockchain analysis company Chainalysis to perform its KYT checks on wallets and virtual asset transactions. Any upcoming forks will require Ousoul [Technology or Operations team] to find out from our provider if they intend to support both assets, their timeline and decision-making process and how they intend to notify us clients.

8. CONTINUAL ASSESMENT

Ousoul is aware that each fork has its own uniqueness and criteria mentioned in this document may not apply in all cases. We will evaluate each fork on a case-by-case basis, as each case may require additional actions to be taken by the Firm.

Ousoul will notify the FSRA about how they intent to handle the upcoming fork and share with the FSRA any public notifications prior to being published.

Ousoul Operations team will review and update this document on an on-going basis.

9. PUBLIC NOTIFICATION

Unless the Firm explicitly publishes via platform that it will support a fork for an AVA, any new asset from the fork WILL NOT be supported.

Upon the announcement of an upcoming fork for an AVA in which the platform supports trading, the Firm will provide notification directly to its clients, via platform, that it is aware of the upcoming fork and will be reviewing the fork.

The notification will further make it clear that it should not be presumed that the forked AVA will be supported by the platform and those persons holding the original AVA that wish to claim the forked AVA will have to transfer the AVAs held at the MTF to their external wallets in advance of the fork.