Custody & Asset Handling Disclosure

BitLease Technologies Ltd. A subsidiary of 49G Holding Ltd. Incorporated in Abu Dhabi Global Market (ADGM), Registered Address: Unit PC-1, Level 7, Al Maryah Tower, Abu Dhabi Global Market Square, Abu Dhabi, Al Maryah Island, United Arab Emirates

ADGM Registration No.: 34619

Last Updated: 21 March 2026

Effective Date: 21 March 2026

Version: 1.0

1. Introduction

1.1 Purpose

This Custody & Asset Handling Disclosure (“Disclosure”) describes how BitLease Technologies Ltd. (“BitLease”) holds, secures, segregates, and manages digital assets associated with Lease-to-Own (LTO) Contracts on the Platform. It explains the ownership structure, the Client’s economic rights, the custody architecture, asset segregation practices, security infrastructure, and the controls that prevent misuse of escrowed assets.

This Disclosure should be read in conjunction with the Terms of Service, LTO Service Agreement, Risk Disclosure Statement, and Privacy Policy.

1.2 Scope

This Disclosure applies to all digital assets held by BitLease in connection with:

1. Active LTO Contracts (Contract A, Ownership Contracts);
2. Client LTO Wallet balances (stablecoin holdings);
3. Staking-delegated assets under LTO Staking Delegation;
4. Assets pending ownership transfer following Full Settlement;
5. Assets pending settlement following Buyout or contract termination.

1.3 Platform Context

BitLease is not a cryptocurrency exchange, a standalone custodian, or a general-purpose wallet provider. BitLease holds digital assets solely in connection with the structured Lease-to-Own model. Custody is an integral component of the LTO service, not a standalone offering. All LTO Contracts are denominated in stablecoins, and all assets are held in MPC-secured escrow provided by Fireblocks.

2. Ownership Structure During the LTO Contract

2.1 The Two-Layer Model

Every digital asset under an active LTO Contract exists in two distinct layers. Understanding how these layers work is central to understanding how your asset is held and protected.

Layer 1: Economic Utility (Held by the Client from Day One)

From the Commencement Date of the LTO Contract, the Client holds full Economic Utility of the asset. This means the Client holds the substantive economic ownership, everything that makes ownership economically meaningful, while formal title is retained by BitLease as a structural mechanism pending full payment.

Economic Utility comprises:

1. Price appreciation rights: All increases in the asset’s Platform Reference Price value accrue to the Client’s economic benefit. If Bitcoin rises from $60,000 to $90,000 during the contract term, the $30,000 gain belongs economically to the Client
2. Price depreciation exposure: Decreases in value are borne by the Client, subject to the non-recourse limitation (maximum loss equals payments made)
3. Portfolio inclusion: The asset appears in the Client’s portfolio on the Platform from day one with real-time performance tracking, unrealized gain/loss calculation, and historical performance data
4. Buyout right: The Client may close the contract at any time and extract the net economic value (Surplus Value) through the Buyout mechanism (Economic Value Settlement)
5. Full Settlement right: The Client may pay the remaining balance at any time and receive Formal On-Chain Ownership immediately, without penalty
6. Economic realization: The Client may realize the asset’s economic value at any time through a buyout (asset liquidated, surplus returned) or Full Settlement (asset transferred). The asset is not locked without economic recourse
7. Staking yield: Where available and opted in, 80% of staking rewards accrue to the Client
8. Surplus Value Right: Upon contract termination for any reason, any value exceeding the Client’s outstanding obligations belongs to the Client

Assets under LTO are not restricted in an economic sense. The Client has continuous, real-time economic exposure and multiple paths to realize value at any time.

Layer 2: Formal On-Chain Ownership (Held by BitLease in Escrow)

Throughout the LTO Contract term, BitLease retains Formal On-Chain Ownership, meaning the registered on-chain title, private key control, and custodial authority, in MPC-secured escrow. This layer:

1. Represents a security mechanism, not an economic claim by BitLease on the asset’s value;
2. Ensures that the asset cannot be transferred, pledged, or encumbered by the Client outside the Platform during the contract term;
3. Provides the structural framework for the conditional sale: title passes to the Client upon verified completion of all payment obligations;
4. Is consistent with the retention-of-title mechanisms in traditional hire-purchase, conditional sale, and finance lease arrangements.

2.2 When Ownership Transfers

Formal On-Chain Ownership transfers to the Client under the following conditions:

Upon confirmed transfer, BitLease relinquishes all title, control, and custodial authority over the asset. The Client receives the asset at their designated wallet address with a Proof of Ownership Transfer (transaction hash and timestamp).

2.3 What Happens to the Asset at Termination

If the LTO Contract is terminated due to non-payment:

1. The asset is liquidated at the prevailing Platform Reference Price with a controlled execution spread;
2. All outstanding obligations (principal + overdue installments + penalties + fees) are deducted;
3. Surplus Value (if any) is returned to the Client’s LTO Wallet;
4. If the asset value is less than total obligations, the Client’s loss is limited to payments already made (non-recourse). BitLease absorbs the deficit.
5. The Client receives a Final Settlement Statement within five (5) business days.

3. Custody Architecture

3.1 Custody Provider: Fireblocks

BitLease’s custody infrastructure is provided by Fireblocks, a leading institutional digital asset security platform trusted by over 1,800 financial institutions globally. Fireblocks provides Multi-Party Computation (MPC) custody technology, SOC 2 Type II certified infrastructure, HyperHedge coverage for custodied assets, institutional-grade operational controls, and a regulatory-aligned custody framework.

3.2 Multi-Party Computation (MPC): How It Works

MPC is a cryptographic technique that eliminates the single point of failure inherent in traditional private key storage. To understand why this matters, consider the difference:

Traditional custody: A single private key controls the asset. Whoever has the key has the asset. If the key is stolen, compromised, or lost, the asset is gone.

MPC custody (Fireblocks): The private key is never created whole. Instead:

1. Key generation: The key is mathematically generated as multiple encrypted shares (key shares) in a distributed process. At no point does a complete key exist in any single location;
2. Distribution: Key shares are distributed across multiple independent, geographically separated infrastructure nodes operated by Fireblocks;
3. Transaction signing: To authorize any transaction (including asset transfers, settlements, or staking operations), multiple key shares must participate in a distributed signing ceremony. No single share, and no single party, can sign a transaction alone;
4. No single point of compromise: Even if one infrastructure node is compromised, breached, or physically seized, the attacker cannot reconstruct the private key or authorize transactions without the cooperation of other nodes;
5. No single party control: BitLease employees, executives, or systems cannot unilaterally access, move, or dispose of escrowed assets. Transaction authorization requires multi-party cryptographic approval with configurable policy controls.

3.3 Custody Policies and Controls

*3.4 Gold-Backed Token Assets — Dual Custody Layer

Gold-Backed Token Assets — Dual Custody Layer. For Gold LTO Contracts (XAUT/PAXG), custody operates across two distinct layers:

1. Token Layer: BitLease holds the XAUT or PAXG token in Fireblocks MPC-secured escrow, identical to all other supported digital assets.
2. Physical Gold Layer: The physical gold backing the token is held by the token issuer in their vault infrastructure — TG Commodities Limited (Switzerland/Hong Kong) for XAUT, and Paxos Trust Company (New York) for PAXG. BitLease has no control over, responsibility for, or access to the physical gold vault. BitLease does not guarantee the physical gold backing beyond the on-chain token representation. Clients may independently verify gold backing using the issuer's verification tools: XAUT — gold.tether.to; PAXG — paxos.com/paxgold/. Clients should read the respective issuer's terms and custodial disclosures before entering a Gold LTO Contract.

4. Asset Segregation

4.1 Principle

BitLease maintains strict segregation of all client assets from operational assets, other clients’ assets, and Lessor capital. Segregation is enforced at the infrastructure level, not merely by accounting policy.

4.2 Segregation Architecture

The BitLease Platform maintains the following segregated account structures:

Tier 1: LTO Escrow Accounts (Digital Assets Under Active Contracts)

Each LTO Contract’s underlying digital asset is held in a dedicated escrow allocation within the MPC custody system. These allocations are:

1. Individually identifiable and traceable to a specific LTO Contract;
2. Segregated from all other LTO Contract assets;
3. Segregated from BitLease’s operational wallets;
4. Segregated from Lessor capital pools;
5. Subject to release only under the conditions specified in the LTO Service Agreement (Full Settlement, Buyout, or Termination);
6. Not available for any purpose other than fulfillment of the specific LTO Contract to which they are allocated.

Tier 2: Client LTO Wallets (Stablecoin Balances)

Each Client’s LTO Wallet maintains a segregated stablecoin balance used for Down Payments, Installment payments, receipt of Buyout proceeds and Surplus Value, receipt of staking rewards, and user-directed withdrawals.

LTO Wallet balances are:

1. Individually tracked per Client;
2. Segregated from BitLease’s operational stablecoin holdings;
3. Segregated from Lessor funds;
4. Available for Client withdrawal at any time (for free assets not committed to active contracts).

Tier 3: Staking-Delegated Assets

Assets under LTO Staking Delegation are

1. Tracked separately from non-staked escrow assets;
2. Delegated to validators through BitLease’s staking infrastructure;
3. Subject to protocol-level unbonding periods upon opt-out;
4. Yield distributed 80% to Client LTO Wallet, 20% to BitLease brokerage account.

Tier 4: BitLease Operational Accounts

BitLease’s own operational funds, fee revenue, and treasury holdings are maintained in entirely separate accounts with no connection to client asset structures.

Tier 5: Lessor Capital

Capital provided by institutional Lessors under Investment Contracts (Contract B) is managed separately from Client assets and BitLease operational funds.

4.3 No Commingling

Under no circumstances are client assets (digital assets or stablecoin balances) commingled with:

1. BitLease’s operational assets or funds;
2. Fee revenue or company treasury;
3. Other clients’ escrowed assets (each contract’s asset is individually segregated);
4. Lessor capital or Investment Contract proceeds;
5. Assets of 49G Holding or any other group entity;
6. Any third-party assets.

4.4 Insolvency Protection

The segregation architecture is designed so that, in the event of BitLease insolvency:

1. Client assets held in segregated MPC escrow would not form part of BitLease’s general estate, to the extent permitted by ADGM insolvency law and applicable legal frameworks;
2. Client stablecoin balances in segregated LTO Wallets would be identifiable and separable from BitLease’s own assets;
3. The segregation is consistent with client asset protection principles under ADGM FSRA regulations, FCA CASS (Client Assets Sourcebook), MAS custody requirements, and equivalent frameworks.

Important: The legal treatment of segregated digital assets in insolvency has not been definitively tested in all relevant jurisdictions. While BitLease’s segregation architecture is designed to maximize client protection, the ultimate outcome in an insolvency scenario would depend on the specific facts, applicable law, and court determinations. This is disclosed as a risk in the Risk Disclosure Statement.

5. No Rehypothecation

5.1 Absolute Prohibition

BitLease does not rehypothecate, lend, pledge, hypothecate, encumber, or in any way reuse client-associated digital assets.

This prohibition is absolute and unconditional and applies to all asset categories:

*Staking delegation is performed solely at the Client’s direction and for the Client’s benefit (80% yield to Client). This is not “third-party use.” It is user-directed economic activity on the Client’s own escrowed asset.

5.2 What This Means in Practice
BitLease is not able to lend your Bitcoin to hedge funds, trading companies, and other third parties. BitLease is not able to use your Ethereum as collateral for our borrowings and hedging requirements. Your assets cannot be used as margin on any exchange, derivatives platforms, or any kind of lending, liquidity, or yield-generating platforms, for the benefit of BitLease. In the same way, your stablecoins cannot be used as collateral for our borrowings and hedging requirements. The only use of your assets is to hold them in MPC escrow on your behalf, to stake them on your instruction, and to release them upon Full Settlement, Buyout, and Termination.

5.3 Contrast with Industry Practice
Industry practices in the cryptocurrency space include rehypothecation, whereby the assets you hold with a platform are deployed in a manner to generate maximum yields, provide liquidity, and help the platform run efficiently. This has led to the collapse of a number of platforms and the depletion of customers’ assets.
Our no-rehypothecation policy removes the risk of such a situation arising at BitLease. Your assets are held in segregated MPC escrow and are only used to fulfill your LTO Contract.

5.4 Verification
Our no-rehypothecation policy is verifiable by anyone in the future once the Chainlink Proof of Reserve integration is active. This integration is currently planned but not yet active. This would verify the total assets held in custody by BitLease to be equal to or more than the total obligations across all active LTO Contracts.

6. LTO Staking Delegation

6.1 Availability and Opt-In

LTO Staking Delegation is available for eligible Supported Digital Assets where the underlying blockchain supports proof-of-stake or delegated staking. Staking is never activated by default. It is available exclusively upon the Client's explicit opt-in through the Platform.

6.2 BitLease’s Role

BitLease acts solely as an execution agent for staking delegation:

1. BitLease delegates the escrowed asset to a staking validator on the Client’s behalf;
2. BitLease selects validators based on institutional-grade criteria: uptime, performance history, security practices, slashing history, and jurisdictional compliance;
3. BitLease does not guarantee that validator selection criteria will prevent all adverse outcomes;
4. BitLease does not guarantee any staking return, yield, or performance;
5. BitLease does not provide investment advice regarding the decision to stake.

6.3 Yield Distribution

Staking rewards credited to the Client are free, unencumbered assets that are not subject to the LTO Contract terms. They do not reduce the Outstanding Balance or count toward Installments, and they may be withdrawn from the LTO Wallet at any time. They are subject to the Client’s own tax obligations.

6.4 Risk Allocation

All staking risks are borne by the Client, including

Slashing losses reduce the asset’s Platform Reference Price value and directly affects Buyout and termination Surplus Value calculations. The Client accepts this risk by opting into staking.

6.5 Opt-Out

The Client may opt out of staking at any time. Unstaking is subject to any protocol-level unbonding period (which varies by blockchain and may range from hours to weeks). During the unbonding period, the asset is not earning staking rewards but remains in escrow under the LTO Contract.

6.6 No Impact on LTO Contract

Staking does not alter the LTO Contract terms, payment obligations, installment amounts, termination conditions, or any other contractual provision. The decision to stake is independent of and supplementary to the LTO Contract.

7. Security Infrastructure

7.1 Physical and Logical Security

7.2 Incident Response

BitLease maintains a documented Custody Incident Response Plan for events affecting escrowed assets:

Detection: Automated monitoring with real-time alerting for anomalous custody operations, unauthorized access attempts, or unexpected asset movements.

Containment: Immediate suspension of affected custody operations. Emergency key share rotation if compromise is suspected. Isolation of affected infrastructure.

Assessment: Rapid assessment of scope, affected assets, affected clients, and root cause. Engagement of Fireblocks incident response team.

Notification:

1. Regulatory authority notification within the timeframe required by applicable law;
2. Affected client notification without undue delay;
3. Law enforcement notification where criminal activity is suspected.

Recovery: Asset recovery procedures, including coordination with blockchain analytics providers and law enforcement where applicable. Restoration of normal custody operations.

Post-Incident: Root cause analysis, remediation of vulnerabilities, policy and control enhancements, documentation, and Board reporting.

7.3 HyperHedge

Digital assets in custody are covered by Fireblocks’ commercial crime and specie HyperHedge policy (covering theft and unauthorized access) and BitLease’s own operational HyperHedge coverage.

HyperHedge limitations: HyperHedge coverage has policy limits and exclusions. Not all loss scenarios are covered. Coverage amounts may not equal the full value of all custodied assets under all circumstances. HyperHedge is a supplementary protection, not a guarantee.

8. Reconciliation and Audit

8.1 Daily Reconciliation

BitLease performs daily automated reconciliation of:

1. Total digital assets in MPC custody versus total assets recorded in the Platform’s internal ledger;
2. Total LTO Wallet stablecoin balances versus total client entitlements;
3. Individual LTO Contract escrow allocations versus contract records;
4. Staking-delegated assets versus staking records and yield calculations.

Discrepancies trigger immediate investigation by the compliance and operations teams.

8.2 Periodic Audit

1. Internal custody audit: Conducted quarterly, reviewing segregation integrity, reconciliation accuracy, policy adherence, access control compliance, and incident handling;
2. External audit: Annual audit by an independent firm, covering custody controls, asset segregation, and reconciliation processes;
3. Fireblocks attestation: Fireblocks provides periodic attestations regarding the security and integrity of the MPC custody infrastructure (subject to Fireblocks’ SOC 2 Type II reporting).

8.3 Chainlink Proof of Reserve (Planned)

Upon activation, Chainlink Proof of Reserve will provide independent, on-chain, publicly verifiable attestation that total assets in custody match or exceed total obligations, real-time or near-real-time verification available to any party, and a transparency standard exceeding what is required of traditional financial institutions.

This integration is planned and not yet operational.

9. Client Rights Regarding Custodied Assets

9.1 Right to Information

At any time during an active LTO Contract, the Client may request and receive within five (5) business days:

1. Confirmation that the asset is held in segregated MPC escrow;
2. The current Platform Reference Price of the escrowed asset;
3. The current Outstanding Balance and amortization status;
4. A Buyout estimate (indicative surplus or deficit);
5. Staking status and accumulated rewards (if staking is active);
6. Transaction history related to the escrowed asset.

9.2 Right to Buyout

The Client may initiate a Buyout at any time, for any reason, without BitLease approval. This right cannot be suspended, delayed, or conditioned by BitLease except: (i) where required by law (sanctions freeze, court order); (ii) during a custody incident affecting the specific asset; or (iii) where the asset is undergoing a protocol-level unbonding period following a staking opt-out, in which case the Buyout request is accepted and queued and will be executed immediately upon unbonding completion. BitLease will notify the Client of the expected unbonding timeline upon request submission (in which case BitLease will resolve the issue as rapidly as possible and execute the Buyout thereafter).

9.3 Right to Full Settlement

The Client may complete Full Settlement at any time. Upon verified payment, Formal On-Chain Ownership transfers within twenty-four (24) hours. This right cannot be withheld by BitLease.

9.4 Right to Surplus Value

Upon termination or Buyout, any Surplus Value belongs to the Client and is returned to the Client’s LTO Wallet. BitLease does not retain value exceeding the Client’s outstanding obligations.

9.5 Right to Complain

If the Client believes that their custodied assets are being mishandled, not properly segregated, or subject to unauthorized use, they may submit a complaint to complaints@bitlease.com. BitLease will investigate and respond within fifteen (15) business days. The Client may escalate to the relevant regulatory authority if unsatisfied.

10. Regulatory Alignment

10.1 Standards Applied

BitLease’s custody and asset handling practices are designed to meet or exceed the requirements of:

10.2 Custody-Related Licensing

BitLease’s licensing applications in ADGM, VARA, EU (MiCA), UK (FCA), and Singapore (MAS) encompass custody-related activities to the extent classified as regulated by each jurisdiction’s framework.

11. Summary of Commitments

12. Contact

For custody-related inquiries:

BitLease Technologies Ltd. A subsidiary of 49G Holding Incorporated in Abu Dhabi Global Market (ADGM). Registered Address: Unit PC-1, Level 7, Al Maryah Tower, Abu Dhabi Global Market Square, Abu Dhabi, Al Maryah Island, United Arab Emirates

ADGM Registration No.: 34619

Website: bitlease.com