Client Agreement: Digital Assets Brokerage Services

Effective Date: 24 February, 2026

Client Agreement: Digital Asset Derivatives Services

Introduction 

This Digital Asset Derivatives Services Agreement and Schedules thereto (the “Agreement”) is between you, the client (“Client”, “you”, “your”), and Payward Digital Solutions Ltd, an exempted company limited by shares, incorporated in Bermuda with registered number 202403268 and registered address at Park Place, 55 Par-la-Ville Road, Hamilton, Pembroke, HM11, Bermuda (Kraken Derivatives, we, our, us), which is the owner and operator of an online platform for the provision of services related to digital asset derivatives as detailed in Section 1 below (the “Platform”) which is accessed via kraken.com, the mobile app, or via API. Payward Digital Solutions Ltd is a wholly owned subsidiary of Payward, Inc. (together commonly referred as the “Group” and trading as “Kraken”). 

This Agreement governs the provision of Derivatives Brokerage Services (Schedule 1) and Dual Investment Services (Schedule 2) to you (together, the “Services”), which allow you to enter into derivatives transactions on digital asset and other underlyings (“Derivatives Transactions”), and governs all Derivatives Transactions and associated orders entered into or placed by you using or in connection with the Services. Derivatives Transactions shall include “Futures” and “Dual Investment Transactions”, as those terms are defined in Schedules 1 and 2, respectively. This Agreement is supplemented by our Privacy Notice, which is applicable when you open an Account. A copy of our Privacy Notice is found . You may be required to execute other agreements, which are intended to be consistent with this Agreement and each other, but in the event of conflict with this Agreement, this Agreement will prevail. 

Unless otherwise specified herein, capitalised words used in this Agreement shall have the meanings given to them in Schedules 1 and 2. 

Please read this Agreement carefully before using the Services. If you do not understand any of the provisions of this Agreement or your obligations under them, you should seek independent professional advice. 

Payward Digital Solutions Ltd. is licensed by the Bermuda Monetary Authority to conduct digital assets business pursuant to the Digital Assets Business Act, 2018 and holds a Class F license. Please note that our services are not available for residents of certain jurisdictions. Please refer to the list of Prohibited Countries on the main website, , (“Website”) for any geographical limitations that may apply. 

We may make changes to this Agreement from time to time. You should regularly check when the Agreement was last updated and review the current Agreement. It is your obligation to understand the terms of this Agreement. Where a change is material and reasonably within our control, we will make reasonable efforts to provide you with advance notice of the change via the Platform or to the contact details associated with your Kraken Derivatives Account. Where this is not practical, changes may take effect immediately without prior notice. In this instance we will ensure as much notice as possible is provided. 

If you do not accept the Agreement, or any amendment(s) to it, you must notify us immediately and stop using the Services. The continued use of the Platform or Services after any amendment, or the absence of a notification that you have rejected the amendments prior to continuing to use the Platform or Services, constitutes your acceptance of the modified Agreement. In the event of any translation of this Agreement or the Services, the English version shall prevail. 

Please contact our customer support team at if you have questions before you use or continue to use your Kraken Derivatives Account. 

Any Derivatives Transactions you enter into  represent a legal contract between you and your trade counterparty and allow you to economically participate in a decline or rise in the price of digital assets, depending on the direction of your position. 

1. Services provided by us to you 

1.1 This Agreement provides the basis on which we will provide you with the Derivatives Brokerage Services (Schedule 3) and the Dual Investment Services (Schedule 4) (together, the “Services”). 

1.2 We may add, amend or discontinue any aspect of the Services in our sole discretion and without further notice to you, save where such addition, amendments or discontinuation would materially impact your rights, whereby we would provide prior notice of such change in accordance with the provisions detailed in the Introduction. 

1.3 The Services will be provided on a non-advised basis, meaning that we will not provide you with any advice as to the merits of any particular order or Derivatives Transaction you place or enter into using the Services, or whether a particular Derivatives Transaction is suitable for you. You are solely responsible for any decisions taken in respect of the Services and any and all Derivatives Transactions that you choose to enter or not enter into under this Agreement. We will not provide you with any investment, legal, tax or other form of advice, nor can you rely on any statements made by us. 

1.4 The information provided in the terms of this Agreement and/or Website are not marketing, promotional or an offer for any product or investment. You are solely responsible for any losses, damages or costs resulting from your reliance on any data or information that we may provide. You agree that your decisions are your own independent decisions with respect to access or use of the Platform. 

1.5 You agree that you will use the Services and enter into Derivatives Transactions in your own name. Unless we have agreed otherwise with you in writing, you agree that you, as the named Kraken Derivatives Account holder, will be solely responsible for performing any obligations arising in connection with the Services and under any Derivatives Transactions you enter into.. Our obligations under this Agreement are owed exclusively to you and, unless we have agreed otherwise with you in writing, we shall owe no obligations to any other party in connection with our provision of the Services.

1.6 We may make available via the Platform market data and other information related to the Services and Derivatives Transactions. Any decision to make available such market data or other information is taken at our sole discretion. The provision of such market data and other information does not form part of the Services and we are not responsible for its accuracy or completeness, nor do we owe any obligations to you under this Agreement with respect to the provision of that market data and other information. 

1.7 You agree that any company which is a direct or indirect holding company of Payward Digital Solutions Ltd or a direct or indirect subsidiary of that company, and any other direct or indirect subsidiary of the holding company (each a “Group Company” or “Affiliate”) may provide any part, or all of, any Service at any time without any further notification, unless the change materially affects your rights and/or obligations. 

2 Applying to become a Client 

2.1 To receive the Services, you must submit an application (“Application”) to open an account (“Kraken Derivatives Account”) with us via the Platform. Your eligibility to open a Kraken Derivatives Account and access some or all of the Services may depend on your jurisdiction of residence, amongst other criteria, which can be found on the Website and may be updated from time to time at our sole discretion. We reserve the right at all times to require the production of additional “Know Your Customer” (“KYC”) to assess your eligibility to open a Kraken Derivatives Account and to receive some or all of the Services. 

2.2 By submitting an application, you agree to be bound by the terms of this Agreement and this Agreement shall be effective from the date that your Kraken Derivatives Account is opened. If you do not agree to be bound by this Agreement, then your Application will be rejected.  

2.3  We will determine whether to accept your Application and open a Kraken Derivatives Account at our sole discretion. Where we reject an Application, we will use reasonable endeavours to inform you of the reasons why, provided we are permitted to do so under applicable law and regulation. 

2.4  By submitting an Application, you acknowledge that your Kraken Derivatives Account with us, and the Services we provide, are separate and distinct from any other account you may hold with, and services that are provided by, another Group Company. 

2.5  You acknowledge and agree that you will not open, or attempt to open, a Kraken Derivatives Account under any name except your own, nor use your Kraken Derivatives Account to submit orders in relation to Derivatives Transactions on behalf of any third party without our prior written consent. We reserve the right to verify this at any time, throughout the course of our relationship. 

2.6 Your Kraken Derivatives Account is personal to you and must not be shared, nor are you allowed to create multiple Kraken Derivatives Accounts which are not linked together in a sub-account structure. We do not permit Kraken Derivatives Accounts to be opened jointly in the names of two or more persons. 

2.7  Where you are a corporate Client, you are entitled to appoint certain representatives who may access and operate your Kraken Derivatives Account on your behalf (“Users”). You acknowledge and agree that you take full responsibility for all activities undertaken by your Users on the Platform in respect of the Services. When you appoint Users, you must provide us with the full legal names of those Users and keep us updated as to any changes to the identity of your Users. 

2.8  You are required to keep your details in your Kraken Derivatives Account up-to-date at all times.

2.9  You, and any of your Users, are responsible for keeping your password(s) and any other security measures implemented on your Kraken Derivatives Account secure. As a condition of opening a Kraken Derivatives Account, you will be required to enable two factor authentication. You must notify us immediately if you, or any of your Users, have lost your password or suspect that your Kraken Derivatives Account has been accessed without your permission. Unless we receive a notification from you under this Section 2.9, we will treat all orders made on your Kraken Derivatives Account as authorised activity. We may need to obtain certain information from you in order to confirm your identity in the event that you make a notification under this Section 2.9 and you agree to provide that information. 

2.10 You confirm that the representations in Section 9 of this Agreement are true and accurate. 

3 Verifying Your Identity 

3.1  We are required by applicable law and regulation to confirm and verify your identity prior to opening your Kraken Derivatives Account. We may rely on the KYC information and verification processes conducted when you opened an account with another Group Company,  although we reserve the right to require additional information or documentation from you to satisfy any regulatory requirements applicable to us or the provision of the Services, before accepting your Application or commencing the provision of Services to you. This may include, but is not limited to, a copy of your passport, a proof of address or other identifying documents or information that may be requested from time to time, including any other information as set out on the Website.

3.2  You agree to provide us with all information or documentation that we may reasonably request in order to verify your identity in accordance with our obligations under applicable law and regulation. You must notify us immediately of any material change in the information previously provided to us or to another Group Company with which you have another account under this Section 3. 

3.3  We may decide to verify or otherwise re-confirm your identity at any time and may use third party verification providers to do so. You hereby consent to your data being used in this way. 

3.4  We will retain any information or documentation provided by you to allow us to verify your identity and will continue to hold such information following the termination of this Agreement in accordance with the periods specified under applicable law and regulation. 

4 Confidentiality 

4.1All information relating to this Agreement, but not the Agreement itself, shall be confidential and the parties agree to treat the information as such unless any disclosure is required under applicable law or by a party’s regulatory body. 

4.2 You agree that we may share any confidential information with other Group Companies and any other third parties in order to carry out our obligations under this Agreement. 

5 Payments, Fees, Taxes

5.1 We may charge you fees for our Services. Details of our fees can be found on our Website and we may change the fees from time to time at our sole discretion. It is your responsibility to ensure that you are aware of our current applicable fees.

5.2 Fees must be paid in accordance with the procedures made available via the Platform. Any attempts to pay fees other than via an available method will be rejected. Unless we have agreed otherwise, all fees arising in connection with the provision of our Services will be due and payable by you to us immediately. If you fail to pay the relevant fee or you have insufficient fiat currency or digital assets in your Kraken Derivatives Account to cover the value of the fee, then your use of our Services may be suspended, and any transaction or order you may submit may be rejected or cancelled.

5.3 All fees or other amounts owed by you to us may be settled by us at our sole discretion on the day they fall due by debiting your Kraken Derivatives Account with the relevant amount payable by you. If there is insufficient fiat currency or digital assets in your Kraken Derivatives Account to satisfy all fees or other amounts owed by you, you acknowledge that any amount due and payable from you under this Agreement is a debt immediately due and owing by you to us. You will be liable in full to us for all losses, costs and expenses we incur due to your failure to pay any amounts which are due from you. Such losses, costs and expenses include our legal costs, interest on overdue payments and third party costs reasonably incurred in recovering any sums from you.

5.4 Without affecting any legal right of set-off under this Agreement or applicable law, you acknowledge and agree that we may set off any and all amounts which are due from you (or, where appropriate, from the relevant entity for whom you are acting) or to you (or, where appropriate, to the relevant entity for whom you are acting) in respect of the Services and/or any other services provided to you through the Platform or otherwise. You acknowledge and agree that you (or, where appropriate, the entity for whom you are acting) will not be entitled to exercise any right of set-off or counterclaim against amounts due to us.

5.5 You are solely responsible for paying all taxes you might owe as a result of using the Services. We may be required to cooperate with tax authorities, as well as governmental and regulatory agencies, and you hereby consent to your information being released for this purpose where necessary. 

6. Funding, Deposits, Withdrawals 

6.1.  Funding. To use the Derivatives Brokerage Services, you must maintain a positive balance of eligible digital assets, fiat currency, or other assets in order to secure your obligations in relation to any Derivatives Transactions (“Collateral”) in:  (i) your Kraken Derivatives Account; or (ii) where you have enabled the unified wallet feature via the Platform, in another account you hold with a Group Company, in which case any eligible digital assets or fiat currency held in that account will, upon enabling the unified wallet feature, be deemed to constitute eligible Collateral and Secured Assets for the purposes of the Security Interest. Collateral shall include any Futures Collateral or Subscription Amounts, as those terms are defined in Schedules 1 and 2, respectively. Where the unified wallet feature is not enabled, your Kraken Derivatives Account may only be funded by depositing digital assets or fiat currency that qualify as eligible Collateral into that account. Instructions on how to make deposits, together with the list of eligible digital assets and fiat currency, and any additional applicable terms, are made available on the Platform and/or the Website. Any attempted deposit of digital assets or fiat currency to your Kraken Derivatives Account that does not constitute eligible Collateral will be rejected. You bear the sole risk of any transfer of digital assets or fiat currency into your Kraken Derivatives Account. We reserve the right to impose restrictions on the amount of digital assets or fiat currency that may be held in your Kraken Derivatives Account. 

6.2. Digital Asset Custody. You instruct us to hold any digital assets deposited or credited to your Kraken Derivatives Account. Any digital assets held by us, or by a third party appointed by us, may be held in omnibus wallets together with digital assets of other Clients, but will be separately accounted for and segregated from our proprietary assets. We will maintain appropriate books and records to document the value of any digital assets deposited or credited to your Kraken Derivatives Account and will present your digital assets balance in respect of your Kraken Derivatives Account via the Platform. You acknowledge and agree that your redelivery rights in respect of any digital assets deposited or credited to your Kraken Derivatives Account are not necessarily for the exact same digital assets as you deposited, but will instead be in respect of an equal amount of digital assets which is based on the same cryptographic protocol of that deposited. The treatment of any shortfall of digital assets in the event of our or any third party’s insolvency will be determined by applicable law and regulation. You acknowledge and agree that any digital assets deposited or credited to your Kraken Derivatives Account are not covered by any statutory insurance protections under the Digital Assets Business Act 2018 or otherwise, and we shall have no obligation to insure any digital assets that are held by us.

6.3 Fiat Currency. Any fiat currency deposited or credited to your Kraken Derivatives Account will be held by us, or by a third-party banking provider appointed by us, in omnibus bank accounts together with fiat currency of other clients and/or clients of our Group Companies. Such fiat currency will be separately accounted for and segregated from our proprietary assets. We will maintain appropriate books and records to document the amount of fiat currency deposited or credited to your Kraken Derivatives Account and will present your fiat currency balance in respect of your Kraken Derivatives Account via the Platform. We shall have no obligation to pay interest on any fiat currency balances held by us or a third-party banking provider.

6.4. Sub-Custodians and Third Parties. You authorise us to appoint one or more third parties to safeguard and administer digital assets on our behalf, and one or more third-party banking providers to hold fiat currency on our behalf. Except to the extent required by applicable law, we shall not be responsible for, and shall have no liability in respect of, the acts, omissions or insolvency of any sub-custodian or third-party banking provider appointed by us. In the event of insolvency, you understand that: (i) the treatment of any fiat currency or digital assets deposited or held with a third party may be subject to the applicable law and regulation of the jurisdiction in which that third party is located and/or where the digital assets or fiat currency is held; (ii) your rights in respect of any digital assets or fiat currency held by that third party will be determined by applicable law; and (iii) you may be treated as an unsecured creditor of that third party. We do not guarantee that you will be able to recover some or all of the digital assets or fiat currency recorded as being held for your benefit.

6.5. Withdrawals. You can submit a request to withdraw available digital assets or fiat currency from your Kraken Derivatives Account at any time. In order to withdraw fiat currency to an external bank account, it must first be withdrawn from your Kraken Derivatives Account to your Kraken spot account. Direct withdrawals of fiat currency from your Kraken Derivatives Account are not supported. In order to withdraw digital assets to the blockchain, the assets must first be transferred from your Kraken Derivatives Account to your Kraken spot account. Direct on-chain withdrawals from your Kraken Derivatives Account are not supported. Instructions for submitting withdrawals will be displayed to you within the Platform. Any withdrawals may take up to 48 hours and will be conducted on a best efforts basis. You acknowledge and accept that we may not be able to immediately execute any withdrawal request and that we are not liable for any damages incurred due to a delay in executing your withdrawal request.

6.6 Restrictions. We reserve the right to impose restrictions on the type or amount of digital assets or fiat currency that may be deposited to or withdrawn from on your Kraken Derivatives Account. You cannot withdraw fiat currency or digital assets that are required to cover any minimum balance requirements, or your losses or obligations arising under any closed or open Derivatives Transactions or orders related to the same, or to pay any fees owed by you. Only you, as the Kraken Derivatives Account holder, can fund your Kraken Derivatives Account with your own fiat currency or digital assets and no third parties are permitted to make deposits into your Kraken Derivatives Account. Likewise, you will not be able to withdraw any digital assets or fiat currency from your Kraken Derivatives Account to an account that is not held in your name. 

6.7. Fees. Any fees that apply to withdrawals or deposits of fiat currency or digital assets to or from your Kraken Derivatives Account will be communicated to you via the Platform and/or the Website. We reserve the right to introduce a fee in respect of any such deposits or withdrawals. Any deposits or withdrawals to or from your Kraken spot account may be subject to fees. 

7. Security

7.1.  No Third Party Security Interest. You cannot and must not create security over your Derivatives Transactions, Collateral or other assets held in, posted to, or otherwise used in connection with your Kraken Derivatives Account unless you have obtained our prior approval in writing. You represent and warrant that all Collateral is free and clear of all liens and encumbrances other than those arising hereunder, and that you have the right to grant a first priority security interest hereunder. 

7.2. Secured Assets. Any and all Collateral or other securities, digital assets, fiat currency, financial assets, security entitlements, general intangibles and other property delivered by you to, posted to, or otherwise used in connection with your Kraken Derivatives Account or any positions or Derivatives Transactions associated with your Kraken Derivatives Account (“Secured Assets”) will be held, notwithstanding any provision or instructions to the contrary, as security on a continuous basis and will be subject to a general lien and right of set-off in favour of us for any and all of your obligations, liabilities or monies whatsoever at any time now or hereafter owing, dure, incurred, or payable by you to us or otherwise in connection with any Services you use or Derivatives Transactions you enter into under this Agreement or otherwise, whether present or future, actual or contingent, solely or jointly, or whether as principal or surety (“Obligations”).

7.3. Security Interest. As continuing security for the Obligations, you hereby charge by way of a first fixed charge and assign by way of security (the “Security Interest”), in favour of us, all of your rights, title, and interest in the Secured Assets. The Security Interest is a continuing security and will remain in full force and effect notwithstanding any settlement, compromise or intermediate payment made in respect of your Obligations. Notwithstanding any other terms of this Agreement, no part of the Assets may, unless and until your Obligations have been duly paid and discharged in full, be withdrawn, assigned or otherwise disposed of or encumbered except where you have requested and obtained our prior consent. In addition to the rights and remedies granted to us hereunder, we shall have all the rights and remedies of a secured party under the Uniform Commercial Code (“UCC”) and any other applicable law. You will take all action that may be necessary and that we may reasonably request so as at all times to maintain the validity, perfection, enforceability and priority of the Security Interest, and to enable us to protect, exercise or enforce our rights hereunder, including, but not limited to: (i) promptly discharging all liens on the Secured Assets other than our security interest or any other liens permitted herein; and (ii) executing and delivering financing statements, control agreements, instruments of pledge, notices and assignments, in each case, in form and substance reasonably satisfactory to us, relating to the creation, validity, perfection, maintenance or continuation of our security interest in and lien on the Secured Assets under the UCC or other applicable law. You hereby authorise us to file against you one or more financing, continuation or amendment statements pursuant to the UCC or other applicable law in form and substance reasonably satisfactory to us, provided that the description of the collateral in any such statement is limited to only the Secured Assets necessary to meet your Obligations and any related fees and expenses due hereunder. 

7.4. Event of Default. We may immediately enforce the Security Interest if at any time an Event of Default occurs with respect to you in order to give effect to any of the actions we are permitted to take in accordance with Section 15 of the Agreement. 

7.5 Exercising the Security Interest. In exercising our rights to enforce the Security Interest, we will be entitled, without notice or further demand, immediately to exercise all our rights, powers and remedies in accordance with applicable law as chargee and assignee of the Secured Assets and to: (i) demand and receive all and any monies due under or arising out of your Kraken Derivatives Account; (ii) exercise in relation to the Secured Assets all such rights as you were then entitled to exercise in relation to the Secured Assets or might exercise; and (iii) apply, set-off or transfer all or any part of the Secured Assets in or towards the payment or other satisfaction of the Obligations or any part of them.

7.6 Authorisation. In exercising our rights to enforce the Security Interest and without limiting any other rights or remedies under this Agreement or applicable law, you hereby irrevocably authorise us to sell, appropriate or otherwise realise any and all Secured Assets and to apply the proceeds of sale in order to satisfy your Obligations in such order and manner as we think fit, including in or towards payment of all costs and expenses incurred by us in connection with such sale or realisation. If we exercise our right of appropriation to any Secured Assets, we will be entitled to determine their value in good faith and in a commercially reasonable manner.

8 Data Protection and Intellectual Property 

8.1  We hold and process data relating to, including but not limited to, your identity, address, company details, or other information you provide us with. We will hold your data on secure servers which may be located outside of the jurisdiction of the Platform or your local jurisdiction. For more details see our Privacy Notice on the Website. 

8.2  We will make best endeavours to protect your data and we will not sell any of your data or licence it to third parties. To the extent required by applicable law, permissible, and that it would not otherwise adversely affect our ability to respond to any breach of your data, we will promptly disclose any unauthorised access by a third party to your data in violation of this Agreement, our Privacy Policy, or our other policies. 

8.3  We may transfer your personal information to other Group Companies or business partners outside of the jurisdiction of the Platform or your local jurisdiction. We will take steps to ensure that personal information is protected and such transfers comply with applicable laws. 

8.4  We will retain your personal information for as long as required to perform the purposes for which the data was collected, depending on the legal basis for which that data was obtained and/or whether additional legal or regulatory obligations require us to retain it. For more details see our Privacy Notice on our Website. 

8.5  We own or are the licensee of all the intellectual property that constitutes the Services.

9 Representations and Warranties 

9.1 You represent and warrant when making your Application and continuously thereafter that each representation and warranty is deemed to be repeated by you each time you enter into or submit an order in relation to a Derivatives Transaction or otherwise use the Services: 

1.   if you are a natural person, that you are of the age of majority and have full legal capacity to enter into this Agreement;
   
   

2. if you are a corporate Client, that the representative that executes this Agreement has full capacity and authority to bind you to this Agreement. We may require you to provide documentary evidence of the ability and authorisation of any of your representatives to enter into this Agreement on your behalf;
   
   

3. if you are a corporate Client and you have appointed Users in accordance with Section 2.7 of this Agreement, you will ensure that (i) your Users comply with applicable provisions of this Agreement when accessing the Services; (ii) your Users have appropriate skills, knowledge and expertise to use the Platform and the Services; (iii) each User has the appropriate authority to bind you to Derivatives Transactions and associated orders entered into or placed in connection with the Services; and (iv) that none of your Users are residents of or  otherwise located in any Prohibited Country;
   
   

4. that you are the legal and beneficial owner of the digital assets and/or fiat currency deposited into or used in connection with your Kraken Derivatives Account;
   
   

5. that such digital assets and/or fiat currency are free of all charges, mortgages, security interests, pledges, liens or any other encumbrance;
   
   

6. that such digital assets and/or fiat currency do not constitute the proceeds of crime;
   
   

7. that using the Services does not infringe any local law of your country of incorporation, residence or location;
   
   

8. that you hold all necessary authorisations, licences, permissions and consents to engage in the Services where applicable;
   
   

9. that you will not use the Services to engage in any activity that is fraudulent, deceptive, misleading, manipulative, abusive, causes disorderly trading conditions or otherwise brings us into disrepute;
   
   

10. that you are acting solely on your own behalf and not as agent for another person;
    
    

11. that you only will apply for a single Kraken Derivatives Account with us;
    
    

12. that you have read the Risk Notices in Schedule 1 and 2 of this Agreement and understand the risks associated with using the services; and
    
    

13. that you are not a resident of or otherwise located in any prohibited country as listed on the Website (“Prohibited Country”). 

10 Our Rights 

10.1 To protect the integrity of the Services and to ensure our compliance with applicable law and regulation, we reserve the right to: 

1. request from you proof of source of funds and/or wealth;
   
   

2. obtain confirmation of your control of your digital assets address;
   
   

3. investigate any suspected breach of this Agreement, including but not limited to any suspected breach of the representations and warranties provided by you under Section 9 of this Agreement, or any other suspicious activity or behaviour;
   
   

4. request from you proof of your identity and residential address;
   
   

5. suspend your Kraken Derivatives Account due to repetitive losses and to assess the appropriateness of the Services for you; and
   
   

6. suspend or terminate your Kraken Derivatives Account due to suspected misuse, if we suspect that you have breached the terms of this Agreement, applicable law and/or any of the trading terms detailed on our Website. 

10.2 At our sole discretion we may suspend your Kraken Derivatives Account whilst we are requesting information/documentation from you to verify your identity or, where you are a corporate Client, to confirm authority for a representative of yours to enter into this Agreement. 

10.3  If you do not cooperate with us in our request for further information or documentation during the suspension of your Kraken Derivatives Account, we reserve the right to keep your Kraken Derivatives Account in suspension indefinitely or to terminate your Kraken Derivatives Account and without stating the reasons.

10.4  We reserve the right to freeze and/or wind down the balance of any funds on your Kraken Derivatives Account, including any digital asset balance and fiat currency balance, for regulatory or legal reasons or to mitigate any liability related to your use of the Kraken Derivatives Account in accordance with local law. 

10.5  Where we suspect that you are breaching or potentially breaching or about to breach the terms of this Agreement or where we are directed to do so by a government or regulatory authority, we will suspend your Kraken Derivatives Account and commence an investigation. You will not be able to use your Kraken Derivatives Account during this investigation. We may not be able to give you specific information regarding the suspension, nor any timeframe during which it can be resolved, and you agree to cooperate fully with us during this period. 

11 Liability 

11.1 The Services and the Platform are provided on an “as is” basis. We will not be liable for any losses, damages or other amounts you or any other party may suffer or incur arising out of your use of the Platform, the malfunctioning, misuse, failure or stoppage of the Services or the unavailability of our Platform or for any indirect or consequential loss. We do not exclude liability for death or personal injury or otherwise to the extent we are not permitted to do so as a matter of applicable law. To the extent we are liable, our liability will be limited to the fees we received from you during the 30 days preceding the date on which the act or omission giving rise to the liability occurred. 

11.2  We exclude all liability where the damage does not relate to our conduct, for example where the cause is due to a technical failure in a digital asset protocol, the fork of a digital asset protocol or an action by another Client or a third party. 

11.3  You will indemnify us for any loss, liability, costs (including reasonable legal costs), damages or expenses arising from any breach by you of the terms of this Agreement, including any fraudulent, negligent or reckless act, omission or default or your misuse of the Services. 

11.4  We will not be liable to you for any losses that result from the suspension or termination of your Kraken Derivatives Account. 

12 Complaints 

12.1 We are committed to providing a high standard of service. If you are dissatisfied with the service you have received and wish to raise a complaint then please submit your complaint via email to https://support.kraken.com/hc/en-us/forms. 

12.2 Please provide the following details in order for us to be able to process your complaint in time: 

1. your name;
   
   

2. the email address you used to register your Kraken Derivatives Account;
   
   

3. a clear description of your concern or complaint;
   
   

4. details of what you would like us to do to fix this matter;
   
   

5. copies of any relevant correspondence. 

12.3 We will provide you with an acknowledgement of your complaint within 5 business days of receipt. We will aim to resolve your complaint within 2 weeks of receipt. If we are unable to address the complaint within 2 weeks then we will write to you to explain what is happening with your complaint. Within 4 weeks we will send you a final response. 

13. Inactive Accounts 

13.1 We may mark any Kraken Derivatives Account as dormant if it has been inactive for at least one year to protect both you and us. If you ask us, we will tell you how you can access your Kraken Derivatives Account. If you have positive digital asset or fiat currency balances in a dormant Kraken Derivatives Account, it will remain your property (or if you die it will form part of your estate). 

14. Events of Default

14.1 It will be an “Event of Default” under this Agreement if, in our reasonable opinion:

1. you have repeatedly or materially failed to comply with or perform any of your obligations under this Agreement;
   
   

2. you have repeatedly or materially failed to comply with or perform any obligation under any other agreement with us relating to our Services;
   
   

3. any representation, warranty or undertaking made by you to us under or in connection with this Agreement is untrue, inaccurate, incomplete or misleading in any respect at the time when made by you or later becomes untrue, inaccurate, incomplete or misleading in any respect and you fail to inform us of the true position as soon as reasonably practicable;
   
   

4. if you are an individual, you become deceased, bankrupt or commence action (or have any action commenced against you) to place you into bankruptcy or personal insolvency or you are otherwise unable to pay your debts as and when they fall due;
   
   

5. if you are acting on behalf of a partnership, any of the partners thereof become deceased, bankrupt or commence action (or have any action commenced against them) to place them into bankruptcy or personal insolvency or are otherwise unable to pay their debts as and when they fall due or if any action is commenced to dissolve the partnership;
   
   

6. if you are a corporate Client or are acting on behalf of a corporate Client, the corporate Client becomes unable to pay its debts as and when they fall due, or action is commenced to place the legal entity in insolvency, judicial management, receivership, examinership, administrative management, or any similar or analogous proceedings;
   
   

7. any investigation, claim, action or proceeding of any nature is commenced against you (including investigation into suspected market abuse, manipulation or other criminal conduct), you have breached applicable laws or steps are taken by any person to enforce any security interest against you;
   
   

8. a credible allegation of fraud, misconduct, embezzlement, money laundering, insider trading, market manipulation abuse or other material illegality, breach of regulation or impropriety is made against you or we otherwise reasonably believe that you have conducted any of the foregoing activities or you have used our services with improper intent, which we, acting in good faith and a commercially reasonable manner, believe could reasonably result in reputational harm to us and/or the Kraken brand and/or members of the Group, compromise the integrity of the markets maintained by us and/or result in losses being sustained by other clients;
   
   

9. you are, or appear to be, unable to meet your obligations in respect of one or more Derivatives Transactions;
   
   

10. we have notified you of a material change to, or discontinuation of, our Services, either generally or in relation to you specifically, that requires you to close or reduce any Derivatives Transactions, and you have failed to close or reduce such transactions within the relevant notice period;
    
    

11. you become ineligible to use any of our services in accordance with our eligibility criteria set out in this Agreement; or
    
    

12. we reasonably believe that any of the circumstances set out under the above bullet points are likely to happen and we also reasonably believe that any action described in Section ‎‎15 of this Agreement (Consequences of Default) below is necessary, desirable or expedient to protect our interests or the interests of our other Clients.

15. Consequences of Default

15.1 In the case of an Event of Default, we may immediately or any time thereafter whilst the Event of Default is continuing, do any one or more of the following without prior notice:

1. suspend, cancel or terminate any Kraken Derivatives Account or any Services provided to you and/or accelerate any and all of your liabilities to us (including any and all fees, interest, commission, and charges owed by you to us) so that they will become immediately due and payable;
   
   

2. refuse to complete, or place on hold, block, cancel or reverse a transaction you have authorised (even after funds or assets have been debited from your Kraken Derivatives Account);
   
   

3. at such times and manner as we may reasonably determine based on factors including market conditions and portfolio health, sell or otherwise transfer any digital assets or other property which we (or another Kraken entity on your behalf, as the case may be) may hold for you or which has been transferred to us by you and apply the proceeds to the discharge of your obligations, subject to our rights to set-off and net amounts owed as between you and us as set out herein or under applicable law;
   
   

4. apply any positive balance in your Kraken Derivatives Account against any amounts which you owe us, or generally exercise our rights of netting and set-off as set out herein or under applicable law, and to then demand any shortfall from you, or hold any excess pending full settlement of any other of your obligations, or pay any excess to you by way of any methods considered appropriate by us;
   
   

5. liquidate, accelerate, and/or close out any outstanding positions in Derivatives Transactions by determining their value in good faith and in our absolute discretion as of the date of such liquidation, acceleration or close-out as soon as practicable thereafter;
   
   

6. restrict your ability to withdraw or transfer (as the case may be) any digital assets or fiat currency which we (or another Kraken entity on your behalf, as the case may be) may hold for you; and/or
   
   

7. if the Event of Default is due to your potential breach of applicable law (including for fraud, misconduct, embezzlement, money laundering, insider trading or market abuse), we reserve the right (without liability to you or any third party) to unwind or reverse any Derivatives Transactions or orders related thereto, freeze any or all amounts allocated to your Kraken Derivatives Account, and/or deduct any amounts allocated to your Kraken Derivatives Account that relate to or arise out of any Services in connection with your potential breach of applicable law.

15.2 To the extent permitted under applicable law, you will be responsible for the reasonable costs and expenses of collection of any unpaid fees, charges or balance in your Kraken Derivatives Account (including legal counsel’s fees incurred by us), and will be responsible for any other reasonable costs and expenses incurred by us in exercising any of our rights under this section pursuant to any Event of Default.

16 Account Termination 

16.1 You may terminate the Agreement (and close your Kraken Derivatives Account) at any time and for whatever reason upon giving 14 days’ written notice to us by email to https://support.kraken.com/hc/en-us/forms. Your right to terminate this Agreement will be subject to the settlement of all open positions in Derivatives Transactions to which you are a party as at the date we receive the notice of termination, and any fees, interest, charges, or other amounts payable to us, including as a result of closing out such positions. 

16.2 On receipt of a notice to terminate from you under Section 16.1 of this Agreement, we will work with you to close any open positions. 

16.3 We may terminate your Kraken Derivatives Account at any time and for whatever reason upon giving you 14 days’ written notice to the contact details associated with your Kraken Derivatives Account, such termination to be subject to the settlement of all open positions Derivatives Transactions to which you are a party as at the date we issue you with a notice of termination, and any fees, interest, charges, or other amounts payable to us, including as a result of closing out such positions. You will need to ensure that you withdraw any digital assets and/or fiat currency balances from your Kraken Derivatives Account as soon as possible following your receipt of a notification of termination, and in any event by no later than 14 days following the date of that notification. 

16.4 Notwithstanding the provisions of Section 16.3 above, where you are in breach of this Agreement or we reasonably suspect that you are involved in any fraudulent or criminal activity, we may terminate this Agreement immediately. This will result in us terminating your Kraken Derivatives Account with immediate effect and, where we consider it reasonably necessary to do so to ensure our compliance with applicable law and regulation, we may freeze the balances of digital assets and/or fiat currency held in or used in connection with your Kraken Derivatives Account at that time. In the event of termination under this Section 16.4, we will cancel all your open orders in relation to Derivatives Transactions, and close out all Derivatives Transactions to which you are a party as at the date of termination. Where we terminate this Agreement under this Section 16.4 as a result of our reasonable suspicion that you are involved in any fraudulent or criminal activity, we reserve the right to take any further or other action against you in such respect. 

16.5 All provisions of this Agreement which by their nature extend beyond the expiration or termination of this Agreement, including the sections relating to suspension or termination, Kraken Derivatives Account termination, payments to us, general use of the Platform or Website, defined terms, disputes with us, and general provisions will continue to be binding and operate after the termination or expiration of this Agreement.

17 General 

17.1 Assignment. We may assign any of our obligations or rights under this Agreement to any Group Company. Your Kraken Derivatives Account is personal to you and is non-assignable. 

17.2 No Third-Party Rights. A person who is not a party to this Agreement shall not have any rights under the Contracts (Rights of Third Parties) Act 2016 to enforce any term of this Agreement. 

17.3 Severability. If any provision or part-provision of this Agreement is or becomes invalid, illegal or unenforceable, it shall be deemed modified to the minimum extent necessary to make it valid, legal and enforceable. If such modification is not possible, the relevant provision or part-provision shall be deemed deleted. Any modification to or deletion of a provision or part-provision under this section shall not affect the validity and enforceability of the rest of this Agreement. If any provision or part-provision of this Agreement is invalid, illegal or unenforceable, the parties shall negotiate in good faith to amend such provision so that, as amended, it is legal, valid and enforceable, and, to the greatest extent possible, achieves the intended commercial result of the original provision. 

17.4 Entire Agreement. This Agreement constitutes the entire agreement between the parties and supersedes and extinguishes all previous agreements, promises, assurances, warranties, representations and understandings between them, whether written or oral, relating to its subject matter. Each party agrees that it shall have no remedies in respect of any statement, representation, assurance or warranty (whether made innocently or negligently) that is not set out in this Agreement. Each party agrees that it shall have no claim for innocent or negligent misrepresentation or negligent misstatement based on any statement in this Agreement. 

17.5 Notices. We will send you notices to the email address or other contact details associated with your Kraken Derivatives Account. These will be deemed to be delivered to you if we do not receive a failed delivery message. You must send your notices to https://support.kraken.com/hc/en-us/forms. Your notices will be deemed delivered on the business day following the submission of that notice to us. 

17.6 Force Majeure. We shall not be in breach of this Agreement nor liable for delay in performing, or failure to perform, any of our obligations under this Agreement if such delay or failure results from events, circumstances or causes beyond our reasonable control. We will take all reasonable steps to act in your best interests when a Force Majeure event occurs and may suspend or alter part or all of the Agreement, to the extent that we can no longer comply with the terms in question. 

17.7 No Waiver. No failure or delay by a party to exercise any right or remedy provided under this Agreement or by law shall constitute a waiver of that or any other right or remedy, nor shall it prevent or restrict the further exercise of that or any other right or remedy. No single or partial exercise of such right or remedy shall prevent or restrict the further exercise of that or any other right or remedy. 

17.8 Governing Law and Jurisdiction. This Agreement is between us and you and is in all respects governed by and construed and interpreted in accordance with California law, and the courts of California will have exclusive jurisdiction to settle any legal proceedings arising out of or in connection with this Agreement, including any non-contractual disputes and claims. Nothing in this section will prevent us from bringing proceedings against you in any other jurisdiction. If you are situated outside of California, a process by which any proceedings in California are begun may be served on you by being delivered to the address provided by you when you opened your Kraken Derivatives Account or to any new address subsequently notified to us. Nothing in this section affects our right to serve process in another manner permitted by law. 

SCHEDULE 1 — DERIVATIVES BROKERAGE SERVICES

1 Definitions 

1.1. For the purposes of this Schedule 1:

1. “Futures Collateral” means the digital assets, fiat currency, or other asset that you post to, deposit into, or otherwise use in connection with your Kraken Derivatives Account as security for your obligations under Futures, subject to any restrictions on eligible collateral imposed under Clause 4.5 of this Schedule 1.
   
   

2. “Counterparty” means the counterparty to a SC Future or MC Future entered into by the Client.
   
   

3. “Execution Venue” means the regulated market, multilateral trading facility, or entity that operates a system for bringing together multiple third party buying and selling interests in Futures under its rules in a way that results in a contract.
   
   

4. “Future” means a SC Future and/or an MC Future and “Futures” shall be construed accordingly.
   
   

5. “Liquidity Pool” means the pool of funds set aside to support the equity protection process for certain Futures, and increase Position Liquidations and Position Assignments before a Position Unwind is required.
   
   

6. “MC Future”  means derivative contract that references a digital asset or other underlying reference asset, sometimes on the basis of an agreed future price of the particular underlying, with or without a fixed maturity date: (a) for which eligible Futures Collateral is not limited to the base or quote asset of the relevant trading pair, but is subject to the permitted collateral list published on the Website (see ) and/or the Platform as updated from time to time; and (b) which is governed by the contract specifications published on the Website (see ) and/or the Platform from time to time.
   
   

7. “Order” means a request made via the Platform to enter into or close partially or wholly a Future.
   
   

8. “SC Future” means a derivative contract that references a digital asset or other underlying reference asset, sometimes on the basis of an agreed future price of the particular underlying, with or without a fixed maturity date: (a) for which eligible Futures Collateral is limited to the base asset or the quote asset of the relevant trading pair, as published on the Website (see ) and/or the Platform as updated from time to time; and (b) which is governed by the contract specifications published on the Website (see here) and/or the Platform from time to time.
   
   

9. “Derivatives Brokerage Services” means the services defined in Clause 2 of Schedule 1.

2 Services provided to you by Kraken Derivatives 

2.1.  Derivatives Brokerage Services. This Schedule 1 governs your access to and use of the Derivatives Brokerage Services. The Derivatives Brokerage Services comprise the receipt of Orders from you via the Platform in relation to Futures and the subsequent transmission to, and execution of those on, an Execution Venue as your agent. When you use the Derivatives Brokerage Services the terms of this Schedule 1 apply to you.

2.2. PDSL as agent. By using the Derivatives Brokerage Services, you hereby appoint us as your agent to act on your behalf to procure the execution of your Orders on Execution Venues. Any Futures entered into by you as part of the Derivatives Brokerage Services will be executed on the Execution Venue on an agency basis, either directly by us or via a third party member of the Execution Venue to whom we transmit your order, and upon execution will result in a bilateral contract between you and the Counterparty. We will not be a Counterparty to any Futures. All Derivatives that you enter into will be initiated and managed by you through the Platform.  

2.3. Supporting Services. We may provide supplementary supporting services (“Supporting Services”) where requested by you, or where they are necessary in connection with or for the purposes of providing the Derivatives Brokerage Services, including, but not limited to, any currency or Futures Collateral conversions. By agreeing to this Agreement and asking to receive these Supporting Services, you accept that these may be provided by us or third parties appointed by us, and will be delivered on a best efforts basis. We make no claims or warranties as to the fitness of these Supporting Services. The availability and costs of Supporting Services may change from time to time. 

2.4.  Execution Venues. We facilitate and enable the trading of Futures by clients on Execution Venues. We may be required to provide certain information to the Execution Venue with respect to your dealings with us under the Derivatives Brokerage Services. This may include, but is not limited to, information about your Futures positions and information about you, including your Legal Entity Identifier where you are a corporate Client. You consent to our provision of this information. 

2.5. Execution Only. The Derivatives Brokerage Services are an execution-only service. This means that: (a) you will be responsible for all investment decisions and actions with respect to the Futures that you enter into, and you acknowledge that you have not received any investment advice or recommendation from us; (b) you can only enter into Futures via the Platform; (c) you cannot transfer Futures to other platforms or enter into secondary trading in respect of Futures; and (d) any open positions in relation to Futures in your Kraken Derivatives Account can only be managed or closed as Futures. You should verify all transaction information before submitting any instructions to us. We will have no liability or responsibility for ensuring that the information you provide us is accurate and complete. Futures Orders cannot be reversed once we have accepted the Order.

2.6. Disruption to Derivatives Brokerage Services. We cannot guarantee uninterrupted or error-free operation of the Derivatives Brokerage Services or that we will correct all defects or prevent disruptions or unauthorised access. We may suspend or discontinue the Derivatives Brokerage Services in our sole discretion at any time. In the event of any disruptions, suspension, or discontinuance of the Derivatives Brokerage Services, any open positions may be closed and you may realise a loss in respect of those positions.

3 Orders 

3.1. Submitting Orders. To enter into or close wholly or partly a Future, you must submit an Order via the Platform. We will seek to continuously make our Platform available, but we cannot guarantee that it will always be available. We will not be liable to you for the unavailability of our Platform. Where the Platform is to be unavailable as a result of scheduled or unscheduled maintenance, we shall seek to give you reasonable advance notice of such unavailability if reasonably practicable. You acknowledge and agree that we have sole discretion to determine the types of Futures that you can submit Orders for. Each Order that you submit will be binding on you, and represents your intention to enter into a Future and assume the relevant obligations under that Future. 

3.2. Rejecting Orders. At our sole discretion we may reject, cancel, correct or close any Orders, or restrict your ability to place new Orders or increase the size of existing Orders, including in the following circumstances: (i) at any time or immediately after the Order submission, to correct any error or malfunction, including if, in our opinion, such Orders were executed at unreasonable prices, do or could constitute market abuse, did or could unduly influence market prices, or occurred because of an error or malfunctioning of the Derivatives Brokerage Services, or were erroneously submitted by a Client; (ii) at any time or immediately after the Order submission, if you do not have sufficient Futures Collateral; (iii) at any time if necessary to comply with applicable law, or if you have not provided us with information we reasonably request to comply with applicable law (for instance, if there is suspicion of money laundering, terrorist financing, breaches of international sanctions, fraud, or any other financial crime); (iv) if we are requested to do so by a third party, such as an Execution Venue or a regulatory authority; (v) at any time to perform scheduled maintenance and system upgrades. We will notify you if an Order is rejected, but we shall not be required to explain why your Order was rejected. You acknowledge and agree that we shall have no liability to you in respect of Orders that are rejected, canceled, corrected, closed, or otherwise restricted by us in accordance with this clause.

3.3. Counterparties. You will be anonymous to your Counterparty and your Counterparty will be anonymous to you. We will not provide you with any information about such Counterparty, nor will we provide any information to your Counterparty about you. 

3.4 Order Execution. When you submit an Order, you authorise us to execute a transaction in accordance with the Order and to charge you any applicable fees or charges. We will endeavour to execute Orders as soon as it is reasonably able to do so, depending on the market conditions, and in accordance with our order handling procedures which are detailed on the Website, as updated from time to time. You acknowledge and agree that whether or not your Order is executed is not within our control, and will depend on the ability of the matching engine of the Execution Venue to find an appropriate Counterparty in respect of your Order. You further acknowledge and agree that the Execution Venue may reject or cancel your order in accordance with its rules and procedures or to comply with applicable law and regulation. You acknowledge and agree that we shall have no liability to you in respect of Orders that are not executed.

3.5. Remediation. At our sole discretion we may reject, cancel, or take any other such action within a time period of 72 hours after any Orders have been accepted or executed to correct any error or malfunction, including if, in our opinion, such Orders were executed at unreasonable prices or constitute market abuse or unduly influenced market prices or occurred because of a malfunctioning of the Derivatives Brokerage Services or were erroneously submitted by a Client. 

3.6. Order Cancellation. All Orders are final, non-refundable and non-cancellable, including before or after we execute an Order, unless otherwise provided in this Agreement. In some circumstances, you may have the opportunity to request cancellation of an Order before we execute it, but we may refuse any cancellation request at our sole discretion.

4. Collateral 

4.1.  Collateral. For each open Futures position and each open Order to buy or sell Futures that would establish a position or further increase an existing position size, you need to provide Futures Collateral. The amount of Futures Collateral you must provide is determined by us and is shown to you on the Platform and/or the Website as updated from time to time (the “Collateral Requirement”). 

4.2.  Collateral Requirement. Our Collateral Requirement is important with respect to your use of the Derivatives Brokerage Services, and you should familiarise yourself with it before placing any Orders or entering into any Futures. The Collateral Requirement will set out how Futures Collateral is calculated, how to maintain appropriate Futures Collateral levels, close-out and liquidation processes and when and how they are implemented, how the Liquidity Pool operates, and other important requirements. By placing an Order or entering into a Future, you agree to comply with, and be subject to, the Collateral Requirement in place at the time you place that Order or enter into that Future. It is your responsibility to know the current Collateral Requirement applicable to your open positions at all times. We reserve the right to make amendments to the Collateral Requirement in our sole discretion at any time without prior notice, and you hereby consent and agree to any and all such amendments and further agree to unconditionally abide and be bound by them. Unless the notification we provide expressly states otherwise, alterations to the Collateral Requirement will become effective immediately upon our giving notice to you, which you agree may be by any of the following means: post, telephone, email, text message, or posting on the Platform.

4.3. Valuation of Collateral. Futures Collateral will be valued at fair market value as determined by us, subject to haircuts or discounts which may be applied to non-USD denominated Futures Collateral (see ). Due to market conditions, including lack of liquidity and high price volatility, where your Futures Collateral is converted, it may be converted at a rate inclusive of any haircuts or discounts.

4.4. P&L Model. We calculate the profit and loss of your open Futures positions based on a proprietary model (the “P&L Model”), which reflects our view of the fair market price of the Futures. We may change the specification of the P&L Model at our sole discretion and at any time. 

4.5. Eligible Futures Collateral. We may determine at our sole discretion the types of eligible Futures Collateral in our sole discretion, and may update the types of eligible Futures Collateral without notice to you at any time. Eligible Futures Collateral may comprise any combination of: (i) digital assets, fiat currency, or other assets deposited in, posted to, or otherwise used in connection with your Kraken Derivatives Account; (iii) your realised profit or loss from past Futures positions  that are now closed; (iv) the unrealised profit or loss from your open Futures positions as calculated under the P&L Model; (v) your realised profit or loss from past margin positions that are now closed; and/or (vi) the unrealised profit or loss from your open margin positions, as calculated under the model for valuing the profit or loss of such positions published by the Group Company offering you margin trading services. A complete list of eligible Futures Collateral is available on our Website, as updated from time to time (see ), and may vary in relation to SC Futures and MC Futures.

4.6. Maintaining Collateral. It is your responsibility to constantly monitor your Futures Collateral and to ensure that it is equal to or higher than your Collateral Requirement at any given time. If this is not the case, it is your responsibility to immediately post or deposit additional Futures Collateral to or into your Kraken Derivatives Account, cancel open Orders, and/or to trade out of existing Futures positions such that your Futures Collateral is equal to or higher than your Collateral Requirement. 

4.7. Leverage. Different amounts of leverage apply to different Futures. We can change the leverage (and therefore the Collateral Requirement) we offer at any time. The amount of leverage which you can access at a particular point in time can be viewed on the Platform or on the Website in the Futures contract specifications. 

4.8. Required Margin. An Execution Venue may require that only certain types of Futures Collateral may be used as margin in relation to a Future (the “Required Margin”). Where the Futures Collateral you hold, post, deposit, or otherwise use in connection with your Kraken Derivatives Account is not eligible to serve as Required Margin, we may, without converting your Futures Collateral, fund the Execution Venue with the relevant amount of Required Margin on your behalf in order to satisfy your Collateral Requirement. Where we do so, we may charge a fee to you, including where you hold an open Futures position that is showing a loss. Details of any applicable interest charges are published on the Website (see ) and may be updated from time to time at our sole discretion. 

4.9. Collateral Conversions. If you hold an open Futures position that is showing a loss, or where a Futures position is closed out or liquidated at a loss (whether by you or by us, including where you are unable to meet a Collateral Requirement), and the Futures Collateral you hold is not of the same asset or currency type as the Required Margin, we may, at any time and without prior notice to you, exercise the Security Interest to convert some or all of your Futures Collateral, or the proceeds of any close-out or liquidation, into the asset or currency in which the Required Margin is denominated. Any such conversion may be carried out at thresholds we consider appropriate to manage the risk associated with an open loss-making position or to repay some or all amounts funded by us to an Execution Venue in accordance with Clause 4.8 of this Schedule 1. The thresholds at which Futures Collateral conversions may occur, and the fees applicable to any such conversions, will be made available via the Platform and/or the Website (see ), as updated from time to time at our sole discretion. Any conversion may be carried out by us or through a third-party service provider. Our selection of, and contractual arrangements with, any such third party are at our sole discretion.

5. Liquidation

5.1.  Position Liquidation. If at any time your Futures Collateral is lower than your Collateral Requirement we may, without advance notice to you, at our sole discretion, cancel your open Orders in Futures and/or liquidate some or all of your open positions in Futures (“Position Liquidation”). We will liquidate long positions by selling them to another Client on your behalf, and we will liquidate short positions by buying them back from another Client on your behalf. We will liquidate all positions at the best available price at the time of Position Liquidation, and you agree to accept this price. 

5.2. Position Liquidation Process. The Position Liquidation process may vary according to the Execution Venue and the relevant Future, further details of which are available on the Platform and/or Website (see ), as may be updated from time to time at our sole discretion, without notice to you. 

5.3.  Position Assignment. If we cannot liquidate some or all of your open positions in Futures, for example due to lack of demand by other Clients to buy or sell, we may, at our sole discretion, and without advance notice to you, assign some or all of your remaining open positions to another Client who has previously agreed to receive assignments of positions for this purpose (“Position Assignment”). We will select the price at which your position(s) are assigned such that your remaining Futures Collateral is zero. 

5.4.  Position Covered Liquidation. If we cannot assign some or all of your open positions in Futures, for example because there is insufficient demand for Position Assignment, and if market conditions permit, we may, at our sole discretion, attempt to liquidate your remaining open positions to another client, and cover any remaining negative balance of required Futures Collateral from the Liquidity Pool (“Position Covered Liquidation”). Only certain Futures are eligible for the Position Covered Liquidation process, details which may be made available through the Platform and/or Website (see ), and may be updated from time to time at our sole discretion, without notice to you.

5.5. Position Unwind.  If we cannot assign and/or liquidate some or all of your open positions in Futures, for example because there is insufficient demand for Position Assignment, we may, at our sole discretion, and without advance notice to you, unwind some or all of your open positions (“Position Unwind”). Your open positions in Futures will then terminate at an unwind price, determined by us in our sole discretion, for each of the open positions such that: (i) if you are subject to Position Unwind, all of your remaining Futures Collateral is liquidated and split equally between the relevant Counterparties in proportion to the size of the open positions with each relevant Counterparty; or (ii) if a Counterparty is subject to Position Unwind, the remaining Futures Collateral of the Counterparty is liquidated and split equally between claimant Counterparties, including you, in proportion to the size of the open positions held by each claimant Counterparty. As a claimant Counterparty, you may receive a payment that may or may not cover the whole liability the Counterparty has. You agree to forfeit any claims in excess of this payment.

5.6. General. We do not benefit from Position Liquidations, Position Assignments, or Position Unwinds other than in the form of standard transaction fees. You agree and acknowledge that our calculations and decisions associated with operating the Derivatives Brokerage Services, in particular, but not limited to, the use of the P&L Model, how we calculate the P&L of open positions in Futures, the valuation  of any Futures Collateral, the calculation of your Collateral Requirement, and use of Position Liquidation, Position Assignment, Position Covered Liquidation, and Position Unwind shall be made in our sole discretion and shall be binding and final. We may change the methodology by which we make any such calculations at our sole discretion. We may enforce the Security Interest to execute, bring about, or give effect to the Position Liquidation, Position Assignment, Position Covered Liquidation, and Portfolio Unwind processes referred to in this Clause 5. 

6 Pricing and Fees 

6.1.  Pricing. Prices for Futures are determined based on the price of the underlying reference asset, which we obtain from a variety of third-party data vendors, price feeds, and exchanges, including Execution Venues, and are outside our control. For each Future, the Platform will usually quote an Offer Price and a Bid Price. You may only submit an Order at the current and valid price quoted on the Platform. The pricing will vary according to the type of Future that the Order relates to and may change at any time depending on market conditions. 

6.2. Inability to Calculate or Execute. There may be instances when it is not possible to calculate a price for a Future. Should this occur, that Future will read as “closed” or “suspended” on the Platform and you will not be able to place an Order for that Future. If the Platform informs you that a price is “indication only” or “invalid”, you may not submit an Order in relation to that price.

6.3. Fees. We may charge fees, interest, or other charges in connection with the Derivatives Brokerage Services, including in relation to the opening, maintenance, close-out, liquidation, assignment, covered liquidation, or unwind of a Futures position, and in the circumstances described in Clauses 4.8 and 4.9 of this Schedule 1. Where a fee, interest amount, or other charge accrues in one digital asset or fiat currency and must be settled in another, we may convert balances held in your Kraken Derivatives Account for that purpose. Details of applicable fees and charges are made available on the Platform and/or the Website and may be updated from time to time at our sole discretion.

6.4. Currency Conversions. Where you do not hold the fiat currency or digital asset required to execute or settle an Order, settle any amounts payable between you and us (including fees), or realise profits or losses on your positions, we may convert other balances in your Kraken Derivatives Account. Any such conversion will be carried out at prevailing market rates reasonably available to us and may include a mark-up or other conversion costs, which will be charged to you.

6.5. Timing of Payment. Unless we have agreed otherwise, all fees or other amounts due in connection with the Derivatives Brokerage Services shall be due and payable by you to us immediately. If you fail to pay the relevant fee or you have insufficient funds on your Kraken Derivatives Account to cover the value of the fee, then your Order may be rejected or cancelled. 

7 Market Abuse 

7.1. Prohibition on Market Abuse. As a Client you will not: (a) use the Services in contravention of any laws related to insider dealing, market manipulation or market conduct or behaviour deemed to be market abuse; (b) adopt any practices in relation to your access of the Platform or use of the Derivatives Brokerage Services that are abusive, manipulative, disorderly, fraudulent, misleading or otherwise not in compliance with the promotion of fair, efficient and orderly trading activity; (c) use the Derivatives Brokerage Services in a way to deliberately transfer digital assets between one digital asset wallet and another; or (d) act in any way to damage the fairness, integrity or functioning of the Derivatives Brokerage Services.

7.2.  Preventative Measures. We may implement any measures, procedures or arrangements that we determine, in our sole discretion, to be necessary to limit the possibility of the behaviours detailed in Clause 7.1.

8 Arrangements with Certain Counterparties on the Execution Venue

8.1. In connection with any Futures which we enter into on your behalf on the Execution Venue: 

1. You accept and acknowledge that your Counterparty may be an entity that (i) holds certain of its assets as margin with a third party custodian; and (ii) effects settlement of certain obligations to you in connection via the settlement processes of that third party custodian and the Execution Venue, as amended from time to time.
   
   

2. You agree that:
   
   

   1. the determination and settlement of any amounts in connection with such transactions as contemplated by the settlement processes of such third party custodian and the Execution Venue, as amended from time to time, shall be effective to settle any corresponding underlying obligations with respect to such transactions between you and the relevant counterparty to the extent of the amounts settled;
      
      

   2. by such third party custodian taking the steps contemplated by such settlement processes, any obligations of that third party custodian to you, including, without limitation, any obligations as security trustee with respect to any security interests granted by your Counterparty in favour of such third party custodian as security trustee and in respect of which you are a beneficiary shall be discharged to the extent of the amounts so settled or credited in accordance with such settlement processes; and
      
      

   3. any agreement or contract between you and the Counterparty shall be varied accordingly to take account of the above.

SCHEDULE 2 — DUAL INVESTMENT SERVICES

1 Definitions 

1.1 For the purposes of this Schedule 2:

1. “Alternative Currency” means the digital asset or fiat currency that you will receive on the Maturity Date if the Target Price is reached.
   
   

2. “APR” means the annualised percentage rate applicable to a Dual Investment Transaction, used to calculate the Premium you are entitled to receive.
   
   

3. “Buy Low Dual Investment Transaction” means a Dual Investment Transaction to purchase digital assets with the Subscription Amount at the Target Price on the Maturity Date.
   
   

4. “Premium” means the consideration payable by PDSL to you for entering into a Dual Investment Transaction.
   
   

5. “Dual Investment Service” means the services defined in Clause 2 of Schedule 2.
   
   

6. “Dual Investment Transaction” means an individual over-the-counter transaction entered into between you and PDSL pursuant to a Subscription, on the specific parameters confirmed by you via the Platform.
   
   

7. “Deposit Currency” means the digital asset or fiat currency that your Subscription Amount is denominated in.
    

8. “Maturity Date” means the date and time at which a Dual Investment Transaction matures and the Settlement process is triggered.
   
   

9. “Market Price” means the market price of one digital asset quoted in another digital asset or fiat currency, as determined by us at our sole discretion using reliable market data sources or indices.
   
   

10. “Sell High Dual Investment Transaction” means a Dual Investment Transaction to sell the Subscription Amount for a digital asset or fiat currency at the Target Price on the Maturity Date.
    
    

11. “Settlement” means the delivery to you of any digital assets or fiat currency under the Dual Investment Transaction, such amounts and their denomination to be determined by reference to whether the Target Price is reached at the Maturity Date.
    
    

12. “Subscription” means your legally binding instruction, submitted and confirmed via the Platform, to enter into a Dual Investment Transaction on the parameters displayed at the time of confirmation.
    
    

13. “Subscription Amount” means the amount or quantity of digital assets or fiat currency you commit as Collateral in relation to a Subscription and which is locked for the duration of the Subscription Period until Settlement of the Dual Investment Transaction is complete.
    
    

14. “Subscription Date” means the date and time at which your Subscription is confirmed by the Platform. The Subscription Date is the trade date for the Dual Investment Transaction and the commencement of Premium accrual.
    
    

15. “Subscription Period” means the duration between the Subscription Date and Settlement.
    
    

16. “Target Price” means the price at which your Subscription Amount will be exchanged into the Alternative Currency, if the Market Price is higher than or equal to the Target Price as at the Maturity Date (in respect of a Sell High Dual Investment Transaction), or is lower than or equal to the Target Price as at the Maturity Date (in respect of a Buy Low Dual Investment Transaction).

2 Dual Investment Services

2.1. Dual Investment Services. This Schedule 1 governs your access to and use of the Dual Investment Services. The Dual Investment Services allow you to enter into Dual Investment Transactions that combine elements of digital asset trading and options contracts. By entering into a Dual Investment Transaction, you agree to sell or purchase a digital asset to or from us at a specified Target Price on the Maturity Date in exchange for receiving a Premium from us.

2.2. No Guarantee. Dual Investment Transactions are a non-principal guaranteed investment product involving digital assets and are subject to risk of loss, volatility, and may expose you to losses or settlement in assets of lower value than originally deposited. You should not use the Dual Investment Services unless you fully understand the product, its risks, and have the financial capacity to bear the loss of invested assets.

2.3. No Advice. The Dual Investment Services are offered on a non-advised basis, meaning that we will not provide you with any advice as to the merits of any particular Dual Investment Transaction whether a particular Dual Investment Transaction is suitable for you. You acknowledge that your use of the Dual Investment Services is self-directed and you are solely responsible for any decisions taken in respect of any and all Dual Investment Transactions that you choose to enter or not enter into. 

3 Subscription and Confirmation

3.1. Subscriptions. To enter into a Dual Investment Transaction, you must submit a Subscription through the Platform specifying the:

1. Deposit Currency;
   
   

2. Alternative Currency;
   
   

3. Target Price;
   
   

4. Subscription Amount;
   
   

5. APR; and
   
   

6. Subscription Period.

3.2. Deposit Currencies. Fiat currency or digital assets eligible for use as Deposit Currencies will be shown to you via the Platform. The Maturity Date applicable to a Dual Investment Transaction will be shown to you before submitting your Subscription. 

3.3. Confirmation. Upon confirmation, your Subscription becomes binding and you enter into a Dual Investment Transaction with PDSL.

3.4. Subscription Amount. Once you enter into a Dual Investment Transaction, your Subscription Amount will be locked until the Maturity Date and cannot be withdrawn, transferred, or otherwise dealt with during the Subscription Period. We may exercise the Security Interest to give effect to this clause.

3.5. Cancellation. We may, at its discretion, reject or cancel any Subscription before it is confirmed or if necessary to maintain market integrity, comply with applicable law, or protect its systems or clients. You agree that if we determine that there is an obvious error in the Subscription placed by you, we shall have the right to cancel the Subscription after its confirmation. If we cancel the Subscription, we will promptly notify you of the cancellation. 

4 Premium and Yield

4.1. Premium. The Premium is calculated using the applicable APR and the Subscription Period and accrues from the Subscription Date. The Premium is deemed earned and payable to you as of the Subscription Date, but settlement of the Premium will occur on the Maturity Date in the same currency as the settlement asset of the Dual Investment Transaction, as described in Clause 5 of this Schedule 2. The Premium displayed via the Platform is an estimated Premium, and is not guaranteed or promised. The actual Premium you stand to receive at the Maturity Date may not meet or may be lower than the estimate. We make no guarantee as to the Premium received.

5 Settlement

5.1. Settlement Process. On the Maturity Date, each Dual Investment Transaction will be settled as follows:

1. If the Market Price of the relevant digital asset is higher than or equal to the Target Price for a Sell High Dual Investment Transaction, or is lower than or equal to the Target Price for a Buy Low Dual Investment Transaction:
   
   

   1. Your Subscription Amount will become payable to us, and will be exchanged at the Target Price for the Alternative Currency; and
      
      

   2. The Premium will be paid in the Alternative Currency.
      
      

2. If the Market Price of the relevant digital asset is lower than the Target Price for a Sell High Dual Investment Transaction, or is higher than the Target Price for a Buy Low Dual Investment Transaction:
   
   

   1. Your Subscription Amount will be returned to you in the Deposit Currency; and
      
      

   2. The Premium will be paid in the Deposit Currency.

5.2. Duties. You acknowledge that we do not owe you any duty of best execution or fiduciary responsibility in connection with the execution or Settlement of Dual Investment Transactions.

5.3. Timing of Settlement. Settlement will be completed within a reasonable period following the Maturity Date, generally within eight (8) hours, subject to network conditions and system availability. You acknowledge and agree that it may take additional time for digital assets to appear in your Kraken Derivatives Account (less any applicable fees) after the Maturity Date. The settlement time may vary depending on platform processing times, blockchain network conditions, or other operational factors. You agree and accept that we shall not be liable for any losses caused by or related to settlement delays, and that all settlement amounts, once credited to your Kraken Derivatives Account, shall be final and binding.

5.4. Disruptions. If a system or market disruption prevents timely settlement, we may delay settlement without liability until such disruption is resolved. We will not be liable for delays beyond our reasonable control.

5.5. Price Determinations. The determination of whether the Target Price is equal to, less than, or more than the Market Price (as the case may be) will be made by PDSL at its sole discretion, acting in good faith and using reliable market data sources or indices.

5.6. General. We may enforce the Security Interest to execute, bring about, or give effect to the Settlement Process. 

6 Fees and Taxes

6.1. Any fees applicable to the Dual Investment Service will be disclosed on the Platform. We may amend the fee schedule from time to time. You are solely responsible for determining and paying all taxes arising from your use of the Dual Investment Service. We do not provide tax reporting or advice.

7 Suspension, Modification, and Termination

7.1. Suspension or Termination. We may suspend or terminate your access to the Dual Investment Services, or any part of it, at our sole discretion, immediately, and without notice, including in, but not limited to, circumstances where:

1. required by applicable law, regulation, or an order or request of a competent authority;
   
   

2. we reasonably suspect that you have breached this Schedule 2, the Agreement, or applicable law;
   
   

3. we consider that suspension or termination is necessary or desirable to protect the integrity, stability, or security of the Platform or the Dual Investment Services; or
   
   

4. we reasonably determine that continuing to provide the Dual Investment Services may expose you, us, or any counterparty to unacceptable legal, regulatory, credit, operational, or market risk.

7.2. Early Termination of Dual Investment Transactions. We may, acting in good faith and using commercially reasonable judgment, suspend, terminate, or close out any Dual Investment Transaction before its scheduled Maturity Date if:

1. market conditions are abnormal or significantly disrupted, including excessive volatility, illiquidity, or price dislocation in the relevant digital asset markets;
   
   

2. a systems failure, force-majeure event, or other circumstance beyond our reasonable control prevents normal operation or timely settlement;
   
   

3. required by applicable law, regulation, or an order or request of a competent authority; or
   
   

4. we determine that continuing the Dual Investment Transaction would expose you, us, or our counterparties to unacceptable legal, credit, or operational risk.

7.3. Effect of Early Termination. If a Dual Investment Transaction is terminated or suspended prior to its scheduled Maturity Date, PDSL will, as soon as reasonably practicable, credit to your Kraken Derivatives Account:

1. your Subscription Amount, with or without the Premium owing at the date of termination; or
   
   

2. such other amount as may reasonably reflect the economic value of the Dual Investment Transaction at the time of termination. 

7.4. Notification of Early Termination. We will notify you of the early termination and the amount credited, together with a brief description of the basis used for determining the amounts credited to your Kraken Derivatives Account.

7.5. Resumption Following Suspension. If a Dual Investment Transaction is suspended (but not terminated), we may resume it once the underlying cause of suspension has been remedied. Settlement will then occur on a revised Maturity Date, which will be communicated to you in advance.

7.6. No Liability for Suspension or Early Termination. We shall not be liable for any loss of profits, opportunity, or other indirect, consequential, or special damages arising from or in connection with any suspension, amendment, or early termination of the Dual Investment Service or a Dual Investment Transaction.

7.7. Termination by You. You may cease participating in the Dual Investment Service at any time by providing written notice to us through the Platform or the support centre, provided that such termination shall not affect or unwind any Dual Investment Transaction already entered into and pending settlement. All outstanding Dual Investment Transactions will remain subject to this Schedule 2 until fully settled.

8 Liability and Indemnity

8.1. No Warranty. The Dual Investment Service is provided on an “as is” and “as available” basis without warranty of any kind.

8.2. Liability. To the maximum extent permitted by law, we shall not be liable for any indirect, incidental, consequential, or special losses arising out of your use of the Dual Investment Services, including loss of profits, opportunity, or data.

8.3. Indemnity. You agree to indemnify and hold harmless PDSL and its affiliates from any losses, claims, or expenses arising from your breach of this Schedule 2, the Agreement, or misuse of the Dual Investment Service.

9 Hedging Activity

9.1. Hedging Activity. We may, at its discretion and from time to time, hedge or otherwise mitigate our exposure to you under any Dual Investment Transaction by entering into one or more transactions or analogous positions with third-party institutions or counterparties (“Hedging Transactions”). Such Hedging Transactions may include, without limitation, options, futures, forwards, swaps, or spot positions in the relevant digital asset or any related instrument. You acknowledge that we may benefit from such Hedging Transactions.

9.2. Impact. You acknowledge and agree that the execution or unwinding of our Hedging Transactions may, directly or indirectly, influence market conditions for the underlying digital asset. As a result, a Dual Investment Transaction entered into by you may, through our hedging activity, exert a distorting or amplifying effect on trading in the relevant digital asset market and may also affect the parameters of other Subscriptions, including the APR or other values derived from the same underlying digital asset.

9.3. Delays. You acknowledge that delays, failures, or disruptions affecting our Hedging Transactions—including execution, margining, or settlement of such transactions—may impact our ability to perform or settle our obligations to you under a Dual Investment Transaction. We shall not be liable for any delay, failure, or disruption in settling or performing a Dual Investment Transaction with you to the extent that such delay, failure, or disruption results from, or is attributable to, any delay, failure, or disruption in connection with our Hedging Transactions or related market activity, and does not guarantee the performance or creditworthiness of any counterparty to a Hedging Transaction.

9.4. Notifications. We will make reasonable efforts to notify you, via the Platform or to the contact details associated with your Kraken Derivatives Account, if a material delay, failure, or disruption occurs or is reasonably expected to occur. However, we shall be under no obligation to provide such notice, and any omission or delay in providing notice shall not constitute a breach of this Schedule 2 or the Agreement.