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Terms and Conditions of Lykke FX Colored Coins Issuance

20 June 2018

BACKGROUND INFORMATION

These Terms and Conditions govern the issuance of certificates of IOUs (referred as "colored coins") by Lykke Corp UK Ltd., full subsidiary of Lykke Corp (referred as "Lykke").

Lykke is a FinTech company building a global marketplace with settlement on the blockchain using colored coins technology.

TECHNOLOGICAL NATURE

Lykke is using distributed ledger technology (referred as "blockchain" or "distributed ledger") for providing the services, including issuance, transfers and exchange of colored coins. The services are based on the Open Assets protocol. Open Assets is a colored coin implementation based on the OP_RETURN operator. Metadata is linked from the blockchain and stored on the web. See www.openassets.org.

For communication with the distributed ledger, a client application has been created for mobile iOS and Android operating systems. To own and exchange colored coins the Lykke Wallet mobile app needs to be downloaded and installed.

This document might not contain the entire information considered important by the interested parties. Since the blockchain technology is relatively new, Lykke will start testing the new colored coins issue carefully, on a limited scale and by using a design that serves to minimise risks.

LEGAL FRAMEWORK

The precondition for the purchase and redemption of the colored coins is a customer relationship with Lykke. In the establishment of the relationship, Lykke thus adheres, among other things, to the obligations arising from the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017, The Proceeds of Crime Act 2002, Money Laundering Reulgations 2007, Terrorism Act 2006 and associated laws and regulations.

BASIC CONDITIONS FOR THE ISSUANCE

The colored coins shall be freely transferable and exchangeable, subject to the limitations arising from the laws and regulations of the EU and other countries. The issue of the colored coins is not currently registrable or registered in the UK and is also not currently registered under the laws of any other country. The colored coins may therefore not be sold or offered for sale in any country, where a previous registration or other formalities are required for the purpose.

Any payments to be made by Lykke and the holder of the colored coin in connection with the colored coins shall be made in bitcoins.

ASSET DEFINITION

Lykke uses Colored Coin technology to serialise the deposit made by a client. The Colored Coin technology is used as a form of identifier in distributed ledger and described as “certificates of IOUs” by Lykke. The Colored Coins can then be used to trade in precious metals, cryptocurrencies or spot foreign exchange.

A holder of a colored coin has the right to return the colored coin to Lykke and request fulfilment of the obligation (IOU) as specified by the colored coin.

FX colored coins issued by Lykke represents the IOU to request a transfer of respective amount in settlement currency. Holder of the colored coin is entitled to receive assets as specified in Appendix A.

All FX colored coins trades are placed on Lykke Exchange. Lykke organizes spot exchange to other colored coins traded. No remittance services are possible. Asset specification is provided in Appendix A.

Example of a colored coin: 1 Lykke USD colored coin: commitment to pay 1 USD within three business days.

The time period for the payment begins with the remittance of the coin to Lykke and the request for delivery.

Payment is made to the account of the holder.

ACQUISITION AND REDEMPTION

To acquire a colored coin, customer needs to use Lykke Exchange accessible of the Lykke Wallet mobile application.

The value of the colored coins is defined by reference to market prices.

Colored coins may be acquired during the entire period of the Terms.

Lykke has the right to decide on the cancellation of the issue or reduction of the volume of the issue.

Colored coins may only be redeemed by customers of Lykke.

The redemption payment per colored coin shall be the nominal value of the colored coin.

Lykke has the right to redeem colored coins at an earlier date.

Lykke shall make the redemption payment to the person who has sought redemption of the colored coin in Lykke during the term of redemption.

The last redemption date of the colored coins is 1 January 2022.

FINAL PROVISIONS

Lykke shall only be liable for direct losses arising from the breach of an obligation arising from the conditions of issue and only to the extent the breach is deliberate or attributable to gross negligence. The liability Lykke hereunder shall be limited to the value of the specific transaction to which the breach relates.

The colored coins and any rights and obligations thereof shall be governed by the laws of England and Wales.