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BitLease Technologies Ltd.
Document Type: Platform Policy & Structural Definition
Version: 1.1
Effective Date: 21 March 2026
This document defines the legal and operational status of digital assets held within the LTO Wallet during the term of a BitLease Lease-to-Own (LTO) Contract. It establishes the precise nature of the Leased Asset, distinguishes this framework from collateral, lien, custody, and lock arrangements, and defines the full spectrum of rights and obligations of the Client with respect to the Leased Asset throughout the contract term and upon its conclusion.
This framework applies to all LTO Contracts executed on the BitLease Platform and governs the relationship between the Client's Total Obligation and their exercisable rights over the Leased Asset from contract inception through Full Settlement or termination.
Leased Asset — The digital asset acquired under the LTO Contract, held within the Client's LTO Wallet for the duration of the Total Obligation. The Leased Asset is the economic property of the Client from the date of contract execution. It is not collateral, not pledged security, and not subject to any lien or encumbrance.
Total Obligation — The aggregate outstanding amount owed by the Client to BitLease under an active LTO Contract at any given point in time:
> Total Obligation = Outstanding Financed Amount + Accrued Finance Fee + Accrued HyperHedge Fee
The Total Obligation is dynamic — it decreases with each installment payment and reaches zero upon Full Settlement. It does not include penalties unless a late payment event has occurred.
LTO Wallet — The designated on-platform wallet within which the Leased Asset resides throughout the contract term. The LTO Wallet is operationally distinct from the Client's Funding Wallet. All economic activities on the Leased Asset are conducted exclusively within the LTO Wallet environment during the Obligation Period.
Funding Wallet — The Client's primary on-platform wallet for deposits, withdrawals, and unrestricted asset custody. The Leased Asset transfers to the Funding Wallet upon Full Settlement, at which point all restrictions are discharged.
Obligation Period — The period commencing at LTO Contract execution and concluding at the moment the Total Obligation reaches zero. During the Obligation Period, the Leased Asset must remain within the LTO Wallet.
Full Settlement — The event at which the Client's Total Obligation reaches zero, whether through scheduled installment payments, voluntary early repayment, or Economic Value Settlement. Full Settlement discharges the Obligation Period and transfers the Leased Asset to the Funding Wallet.
Economic Value Settlement (EVS) — The settlement mechanism triggered upon Buyout execution or contract termination. The full current market value of the Leased Asset is recognized at the Platform Reference Price, the Total Obligation is settled from the proceeds, and any Surplus Value is returned to the Client.
Buyout via Stablecoin — An EVS exit mode in which the entire Leased Asset is liquidated, the Total Obligation is deducted from the proceeds, and the remaining balance is credited to the Client in stablecoins.
Buyout via Asset — An EVS exit mode in which only the portion of the Leased Asset necessary to cover the Total Obligation is liquidated. The remaining asset balance is retained in the Client's LTO Wallet and, upon settlement completion, transferred to the Funding Wallet.
Platform Reference Price — Live Market Price plus Execution Spread, sourced in real time from TradingView, CoinMarketCap, and Binance.
The status of the Leased Asset under a BitLease LTO Contract is expressly and unambiguously distinct from the following arrangements:
Not Collateral. The Leased Asset is not pledged as security for the Client's Obligation. BitLease holds no security interest, pledge right, or collateral claim over the Leased Asset. No collateral registration or equivalent encumbrance is created at any point during the Obligation Period.
Not Subject to a Lien. No lien — whether possessory, contractual, or statutory — is imposed on the Leased Asset. Third-party creditors of BitLease cannot assert claims against the Leased Asset based on any lien or encumbrance arising from the LTO Contract.
No Independent Custodial Services. BitLease does not offer standalone custodial services. Assets under active LTO Contracts are held in MPC-secured escrow via Fireblocks exclusively in connection with the LTO Contract. This is not general-purpose custody, wallet provision, or banking.
Not Locked or Frozen. The Leased Asset is not technically locked, frozen, or restricted from economic use within the LTO Wallet. The Client retains full operational control over the Leased Asset within the LTO Wallet environment throughout the Obligation Period.
The Leased Asset is the economic and beneficial property of the Client from the date of the LTO Contract execution. The Client's relationship with the Leased Asset is governed by a single contractual condition:
> The Leased Asset must remain within the LTO Wallet for the duration of the Obligation Period. All economic activities on the Leased Asset are conducted exclusively within the LTO Wallet. Transfer to the Funding Wallet or any external address is contingent solely on the Total Obligation reaching zero.
This condition is the entirety of the restriction. It does not affect ownership, economic rights, yield entitlements, or the Client's ability to benefit from market appreciation.
Notwithstanding the Obligation Period condition, the Client retains the following rights over the Leased Asset in full:
The Client is the beneficial and economic owner of the Leased Asset from the date of LTO Contract execution. All economic upside and downside in the asset's market value accrues entirely to the Client. Asset appreciation is not shared with BitLease, the Lessor, or HyperHedge beyond their defined fee entitlements.
The Client's economic interest in the Leased Asset is not limited to the portion of the Total Obligation already paid. The Client holds the economic benefit of the entire Leased Asset from day one. If the Leased Asset appreciates in value, the full appreciation — on the total asset, not only the paid portion — belongs to the Client.
Example: A Client acquires 1 BTC at $60,000 with a 15% Down Payment ($9,000). After paying only the Down Payment, the Total Obligation stands at approximately $54,000. If BTC rises to $120,000, the full $120,000 value belongs to the Client. Upon Buyout, the $54,000 Obligation is settled, and the $66,000 Surplus is returned to the Client.
For Gold (XAUT/PAXG), the minimum Down Payment is 20%. Asset-specific Down Payment parameters are confirmed in Schedule A at contract execution.
The Client may delegate the Leased Asset to staking through the BitLease LTO Staking Delegation service or any compatible staking mechanism available within the LTO Wallet environment. All staking rewards generated by the Leased Asset belong to the Client, subject to the Staking Brokerage Commission. Delegation of the Leased Asset to staking does not alter its status as the Leased Asset — the asset remains within the LTO Wallet environment and the Obligation Period continues unaffected.
Gold (XAUT/PAXG) is not eligible for LTO Staking Delegation. Gold-backed tokens do not operate on a Proof-of-Stake blockchain and generate no native staking yield. All staking rights in this section apply exclusively to PoS-eligible assets: ETH, SOL, and BNB.
Staking rewards and other economic returns generated by the Leased Asset within the LTO Wallet may be applied by the Client toward installment payments, directly reducing the Total Obligation. This creates a mechanism by which the Leased Asset participates economically in its own acquisition.
At any point during the Obligation Period, the Client may exercise the Buyout right, triggering an EVS. The Buyout is a right, not a penalized action. The Client selects the Buyout mode at the time of exercise.
The Client may discharge the Total Obligation at any time through early Full Settlement, without penalty. Upon Full Settlement, the Obligation Period concludes, and the Leased Asset transfers freely to the Funding Wallet.
| Stage | Status | Client Rights |
|---|---|---|
| Contract Execution | Leased Asset acquired and placed in LTO Wallet. Obligation Period begins. | Full economic ownership. Staking, yield, and appreciation rights active. |
| During Obligation Period | Leased Asset held in LTO Wallet. Total Obligation decreases with each installment. | All economic activities available within the LTO Wallet. Transfer to Funding Wallet pending Full Settlement. |
| Staking Active | Leased Asset delegated within the LTO Wallet. Status unchanged. | Staking rewards accrue to the Client. Rewards may be applied toward Obligation. |
| Buyout Exercised | EVS triggered. Client selects Buyout mode. | See Section 6. |
| Full Settlement | Total Obligation = $0. Obligation Period concludes. | Leased Asset transfers to Funding Wallet. Fully unrestricted. |
| Contract Termination | EVS triggered. Leased Asset liquidated. | Surplus (if any) returned to Client. No negative balance. HyperHedge covers shortfall. |
The Client may exit an LTO Contract at any time by exercising the Buyout right. Exit is contingent on the Total Obligation being reduced to zero through one of the following mechanisms. The Buyout is only executable when the Total Obligation can be fully satisfied.
The fundamental condition for any Buyout or transfer of the Leased Asset is:
> Total Obligation must equal zero before or at the moment of exit.
This condition may be satisfied through three pathways:
Pathway A — Asset Value Covers Obligation:
If the current market value of the Leased Asset exceeds the Total Obligation, the Client may use the economic value of the Leased Asset to settle. The asset is partially or fully liquidated at the Platform Reference Price to cover the Obligation. This pathway is only available when:
> Platform Reference Price × Leased Asset Quantity > Total Obligation
Pathway B — Direct Wallet Payment:
The Client pays the Total Obligation directly from their Funding Wallet or LTO Wallet in stablecoins or LTO Token, reducing the Obligation to zero without liquidating the Leased Asset. Upon payment, the Leased Asset transfers to the Funding Wallet in full.
Pathway C — Combined:
The Client partially liquidates the Leased Asset to cover a portion of the Obligation and pays the remainder directly from their wallet.
The Client elects to liquidate the entire Leased Asset. Proceeds are converted to stablecoins at the Platform Reference Price.
> Settlement: Total Obligation deducted from proceeds → Surplus credited to Client in stablecoins → Leased Asset fully exited.
Best suited for Clients who wish to fully exit the asset position and receive the net value in stablecoins.
The Client elects to liquidate only the portion of the Leased Asset necessary to cover the Total Obligation. The remaining asset balance is retained.
> Settlement: Minimum liquidation quantity calculated → Total Obligation settled from proceeds → Remaining Leased Asset transferred to Funding Wallet as unrestricted asset.
Best suited for Clients who wish to retain as much of the asset as possible and exit with a residual asset position.
Minimum Liquidation Quantity:
> Minimum Liquidation = Total Obligation ÷ Platform Reference Price
Example: Total Obligation = $5,000. BTC Platform Reference Price = $100,000. Minimum liquidation = 0.05 BTC. Remaining 0.95 BTC transfers to Funding Wallet.
If the Leased Asset's current market value is less than the Total Obligation, Pathway A is unavailable. The Client must use Pathway B (direct wallet payment) or Pathway C (combined) to achieve Full Settlement. BitLease does not permit partial exits that leave a residual Obligation.
The restriction on transferring the Leased Asset out of the LTO Wallet is a Client-side contractual undertaking, not a platform-imposed technical lock, freeze, or encumbrance. The restriction arises from the LTO Contract and is enforceable as a matter of contract law under ADGM jurisdiction.
BitLease does not unilaterally freeze, seize, or restrict the Leased Asset during the Obligation Period. The restriction exists by virtue of the Client's contractual commitment. BitLease's sole recourse upon Client default is contract termination and EVS, as defined in the LTO Terms of Service.
Upon the Total Obligation reaching zero, all contractual restrictions are discharged. The Leased Asset transfers to the Funding Wallet and becomes fully unrestricted. The Client may withdraw it on-chain, trade it, transfer it, or otherwise dispose of it freely, subject only to standard Funding Wallet withdrawal fees.
BitLease's interest under the LTO Contract is strictly limited to the recovery of the Total Obligation through scheduled installments or settlement events. BitLease expressly:
The HyperHedge Fee paid by the Client throughout the Obligation Period is allocated to HyperHedge, which operates as the Platform's designated risk coverage layer. This arrangement provides:
The combination of the EVS mechanism and HyperHedge coverage means the Client's maximum loss upon termination is limited to installments already paid. The Client cannot owe more than what the Leased Asset is worth at the time of termination.
The Leased Asset under a BitLease LTO Contract is:
The Leased Asset is the Client's own economic property, held in the Client's own LTO Wallet, fully available for staking, yield generation, and appreciation benefit — subject solely to one contractual condition: it remains within the LTO Wallet until the Total Obligation reaches zero.
When there is no obligation associated with the asset, it becomes transferable.
| Dimension | Position |
|---|---|
| Legal title | Client (economic and beneficial) from day one |
| Collateral/pledge | None |
| Lien | None |
| Custody | None — asset in Client's own LTO Wallet |
| Technical lock/freeze | None |
| Transfer restriction | Contractual only — Leased Asset transfers to Funding Wallet upon Total Obligation = $0 |
| Asset appreciation | 100% accrues to the Client on the entire asset from day one |
| Staking rights | Full — Client retains all yield rights subject to Staking Brokerage Commission. |
| Obligation reduction via yield | Available — staking rewards may be applied toward installments. |
| Exit options | Buyout via Stablecoin, Buyout via Asset, Direct Wallet Payment, or Combined |
| BitLease recourse on default | Contract termination + EVS only |
| Negative balance on default | None — covered by HyperHedge Fee / HyperHedge |
| Post-settlement status | Fully unrestricted — transferred to Funding Wallet |
This framework is governed by the laws of the Abu Dhabi Global Market (ADGM), Abu Dhabi, United Arab Emirates. Any disputes arising from or in connection with this framework shall be subject to the exclusive jurisdiction of the ADGM Courts.
This document forms part of the BitLease Platform documentation suite and should be read in conjunction with the LTO Terms of Service, Fee Schedule, Contract Summary (Schedule A), and Staking Disclosure. All documents available at www.bitlease.com/legal