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Conflicts of Interest Disclosure

 

(In accordance with Article 72 of the Markets in Crypto-Assets Regulation (EU) 2023/1114)

 

INTRODUCTION

This disclosure outlines SMART VALOR AG’s approach to conflicts of interest, in accordance with Article 72 of the Markets in Crypto-Assets Regulation (EU) 2023/1114 (MiCAR).

Due to the nature and scope of SMART VALOR's business activities, conflicts of interest can arise in various scenarios, including but not limited to situations where:

  • The interests of SMART VALOR conflict directly with those of its clients.
  • Conflicting interests emerge between two or more clients of SMART VALOR.
  • Personal interests of management may conflict with the interests of SMART VALOR or its clients.
  • Personal interests of employees may conflict with the interests of SMART VALOR or its clients.
  • Access to sensitive, confidential, or non-public information could be used improperly, leading to potential conflicts or unfair advantages.

In line with Article 72 MiCAR, SMART VALOR:

  • implements effective policies and procedures;
  • maintains oversight and independent monitoring;
  • provides transparent disclosures to clients; and
  • ensures that conflicts never result in material detriment to client interests.

SMART VALOR remains committed to proactively identifying, mitigating, managing, and transparently disclosing all such conflicts of interest to ensure compliance with regulatory standards and to protect the integrity of client relationships.

 

WHERE THE CONFLICTS CAN ARISE

Conflicts may arise in the following contexts:

Between SMART VALOR and its clients – Conflicts may arise where SMART VALOR executes client orders against its own account as part of its market making activities. This can create risks relating to pricing and execution fairness. To mitigate these risks, SMART VALOR relies on automated order execution, real-time market pricing, post-trade hedging strategies, risk management, independent audits, and oversight.

Between different clients – Conflicts may occur when multiple clients place orders in the same crypto-asset at the same time, raising concerns about fair treatment and prioritisation. To ensure equal treatment, SMART VALOR implements Fair Order Execution Principle (FIFO - First In, First Out), ensuring trades are executed automatically, transparently and fairly based on the order of receipt, as all client orders are recorded with timestamps precise to milliseconds, ensuring objective and verifiable sequencing.

Between SMART VALOR and employees – Conflicts may arise where employees have access to sensitive systems or inside information, or when they engage in personal transactions in crypto-assets. Such risks include unauthorised actions or insider trading. These risks are addressed through dual-control procedures, role-based access controls, logging and monitoring, periodic access reviews, mandatory training and awareness and incident reporting and investigation.

Between SMART VALOR and third parties – Conflicts may occur where employees, management or connected persons have affiliations with third-party companies that do business with SMART VALOR, creating risks of preferential treatment or information leakage. These risks are mitigated by disclosure obligations, independent review of arrangements  and a clear recusal policy.

Between SMART VALOR and liquidity providers – Dependence on external liquidity providers may give rise to conflicts concerning execution quality or dependency risks. SMART VALOR mitigates these risks by engaging multiple liquidity sources, applying transparent pricing and conducting ongoing audits and monitoring.

Between SMART VALOR and outsourced service providers – Outsourcing arrangements may create conflicts where service quality, confidentiality, or overlapping interests with providers could pose risks to clients. These risks are mitigated through rigorous due diligence in partner selection, clear contractual provisions, regular compliance audits and prompt escalation to the Board where necessary.

 

MANAGEMENT OF CONFLICTS OF INTERESTS 

SMART VALOR has established a framework to identify, prevent, manage and where necessary, disclose conflicts of interest. This framework combines governance, organisational measures, employee obligations, and oversight to ensure that conflicts never result in material detriment to clients.

Governance and Oversight – The Board of Directors retains overall responsibility for conflicts management. A Conflicts Officer maintains the Conflicts Register and prepares reports, while the Compliance Officer provides independent monitoring and advice.

Segregation of Duties – Conflicts are reduced through separation of roles, the “four eyes” principle, role-based access controls, IT firewalls and activity logging, ensuring impartial and independent decision-making.

Order Execution and Market Making – Client orders are processed on a strict first-in, first-out basis. Automated execution, transparent pricing, hedging strategies, and independent audits mitigate conflicts when SMART VALOR acts as market maker.

Employee Conduct – Staff must seek pre-approval for personal transactions and disclose external roles or affiliations. Compliance monitors trading activity, applies restrictions where necessary, and enforces training.

Remuneration – Compensation policies balance fixed and variable elements, excluding incentives tied to specific assets or outcomes, so that staff act in the best interests of clients.

Outsourcing and Third Parties – External providers are subject to due diligence, contractual safeguards, monitoring and escalation procedures, with risks reported to the Board.

Disclosure – Where conflicts cannot be fully eliminated, SMART VALOR provides clear, timely disclosure to clients, explaining the nature of the conflict, associated risks and mitigation steps.

 

DISCLOSURE TO CLIENT

Disclosure is provided at multiple stages, including during client onboarding when the client accepts the Confidentiality Policy, Terms and Conditions, and other contractual documents; on an ongoing basis via the dedicated Conflicts of Interest section of the website; and on a case-by-case basis before the client engages in any transaction or service where a material conflict of interest cannot be fully mitigated.

SMART VALOR maintains a dedicated Conflicts of Interest Disclosure section on its website, accessible on all devices, which:

  • provides a clear and specific description of the general nature and sources of conflicts of interest that may arise in connection with the crypto-asset services provided;
  • explains in detail the relevant services, activities, or circumstances that give rise (or may give rise) to conflicts of interest, including the role and capacity in which SMART VALOR is acting when the service is provided;
  • outlines the associated risks for clients; and
  • sets out the steps and measures taken by SMART VALOR to prevent, manage, or mitigate those conflicts.

The disclosure is available in German and English and is updated on an ongoing basis to reflect current operations and risk exposures. Clients are notified in advance where internal procedures cannot fully resolve a conflict, ensuring they can make informed decisions.

SMART VALOR further ensures that:

  • disclosures are not treated as a substitute for internal conflict management, but as an additional transparency safeguard;
  • a direct link to the public disclosure is provided within client-facing interfaces; and
  • up-to-date records are maintained on all actual and potential conflict scenarios, including relevant services and the measures taken to mitigate related risks, in accordance with regulatory retention requirements.

These measures ensure full transparency and compliance with the disclosure obligations under MiCAR and ESMA standards.

 

MONITORING, OVERSIGHT AND REVIEW

SMART VALOR maintains a structured and multi-layered system for the proactive identification of actual and potential conflicts of interest. This system includes:

  • Mandatory Disclosure Procedures: All employees and connected persons are required to promptly disclose potential conflicts to the Conflicts Officer, including external affiliations, personal transactions, and outside appointments. A formal declaration process is integrated into onboarding and annual re-certifications.
  • Regular Compliance Audits: The Compliance Officer conducts thematic reviews and targeted audits of high-risk processes such as personal trading, third-party relationships, and order execution. These audits are documented and findings are reported to the Board.
  • Conflict of Interest Register: Maintained by the Conflicts Officer, this central log captures all reported or detected conflicts, along with their classification, risk assessment, mitigation actions, and status. The register is reviewed quarterly and updated as needed.
  • Record-Keeping and Retention: SMART VALOR maintains comprehensive, accurate, and up-to-date records of all identified conflicts of interest, the measures and actions taken to manage or mitigate these conflicts, and any related disclosures provided to clients. These records are systematically documented, securely stored, and retained for a minimum period of 10 years, in strict accordance with applicable regulatory requirements and internal compliance standards. The documentation ensures full auditability and transparency, facilitating regulatory oversight, internal reviews, and continuous improvement of SMART VALOR’s conflict-of-interest management framework.
  • Automated Controls and Screening Tools: Where applicable, automated flagging systems are embedded into operational processes to detect anomalies, such as suspicious trading behavior or breaches of role-based access restrictions.
  • Defined Escalation Channels: SMART VALOR enforces clearly defined escalation and reporting lines. Employees report to their line managers, who escalate material issues to the Conflicts Officer. The Conflicts Officer has a direct reporting line to the Board of Directors and full independence in investigations.

 

COMMITMENT

SMART VALOR is committed to the highest standards of fairness, transparency and regulatory compliance. Protecting client interests is our top priority. We continuously review and improve our framework to ensure that conflicts of interest are effectively identified, managed and disclosed, in full alignment with MiCAR and ESMA standards.

 

Last updated 24  September 2025