Terms of Service

Liquid Bitcoin Staking Platform — Effective Date: September 25, 2025

Please read these Terms of Service ("Terms" or "Agreement") carefully before using the BITS platform. By accessing or using the services of BITS Blockchain Inc. ("BITS", "Company", "we", or "us"), you agree to be bound by these Terms. If you do not agree with any part of these Terms, you must not use the Platform or services.

1. Acceptance of Terms

   By creating an account, depositing digital assets, or otherwise using any services provided by BITS, you ("User" or "you") acknowledge that you have read, understood, and agree to comply with these Terms and all policies incorporated by reference (such as our Privacy Policy and any supplemental terms). This Agreement constitutes a binding legal contract between you and BITS. If you do not accept these Terms, you must refrain from using the Platform and services. Use of the services is void where prohibited by law.

   This Agreement may only be modified by BITS through the procedures set forth in Section 15, and no modification shall be effective unless in writing and signed by an authorized representative of BITS or posted to the Platform as provided herein.

2. Definitions

   For the purposes of this Agreement, the following terms have the meanings below. Additional terms may be defined in context within these Terms.

   • Platform: The online interface including any website, application, or smart contract system operated by BITS that enables Users to deposit Digital Assets into vaults and receive tokenized representations in return, and facilitates related staking transactions.
   • Digital Assets: Cryptocurrencies or other digital tokens such as Bitcoin (BTC), wrapped BTC tokens (wBTC, cbBTC, SolvBTC), or other supported wrapped Bitcoin variants that are accepted by BITS for use in the Platform. Digital Assets are not fiat currency and are not legal tender, and they are not backed or insured by any government or insurance program.
   • BITS Tokens: The proprietary digital tokens issued by the Platform to Users who deposit Digital Assets. BITS Tokens represent a User's claim on the underlying deposited assets and any accrued yield in the relevant vault. BITS Tokens are intended solely as a technical representation of your deposited assets and are not equity, not debt, and not any form of security or investment contract in the Company.
   • wBITS: Wrapped BITS tokens that provide exposure to BITS yield through a steadily increasing exchange rate mechanism, similar to other wrapped staking tokens in the DeFi ecosystem.
   • Vault: A smart contract or designated on-chain system where Users' deposited Digital Assets are aggregated for staking purposes. Each Vault may hold assets from multiple Users and issue corresponding BITS Tokens to those Users. Vaults operate through non-custodial smart contract logic and are not controlled by traditional custodial arrangements.
   • Staking Provider: Third-party entities or protocols that utilize aggregated Vault assets for legitimate blockchain staking activities to generate yield. Staking Providers are independent of BITS and operate under their own terms and risk profiles.
   • Services: The services provided by BITS via the Platform, including facilitating deposits of Digital Assets, issuance and redemption of BITS Tokens, arranging the pooling of assets for staking strategies, distributing yields to Users, and related technology services. Services also include any other features, content, or offerings on the Platform.
   • Fiat or Fiat Currency: Government-issued currency such as USD that is not a Digital Asset.
   • User (also "you" or "Client"): Any person or entity who accesses or uses the Services. This includes depositors of Digital Assets and holders of BITS Tokens.
   • Agreement: These Terms of Service, including any documents, policies, or schedules incorporated by reference, as updated from time to time.
   • QBITS: The BITS protocol governance and utility token, with Token Generation Event (TGE) expected in future quarters. QBITS entitlements accrue on a time-weighted basis until TGE.
   • Core: Digital assets earned as yield from Core blockchain staking activities.
   • Account Control Agreement (ACA): Legal agreements governing institutional custody arrangements, which may be omnibus (standardized) or bespoke (customized) depending on institutional requirements.
   • Core Foundation: A third-party intermediary provider that facilitates KYC/AML compliance for self-service Users accessing the Platform, independent of BITS Blockchain Inc.

3. Eligibility and User Representations

   By registering an account or using the Services, you represent, warrant, and covenant that the following are true at all times:

   1. Legal Age and Capacity: You are at least 18 years old (or the age of majority in your jurisdiction) and have the legal capacity to enter into this Agreement. If you are using the Services on behalf of an entity, you have the authority to bind that entity to these Terms, and you shall include that entity within all references to "you" herein.
   2. Geographic and Legal Compliance: You are not a resident or citizen of any jurisdiction that prohibits the use of the type of Services provided by BITS. In particular, you are not located in a country or region that is subject to U.S. economic sanctions (including, but not limited to, Cuba, North Korea, Iran, Syria, or the Crimea region) and you are not on any list of prohibited or restricted parties (such as the U.S. Treasury Department's Specially Designated Nationals list). You further represent that your use of the Services does not violate any applicable export control, sanctions, or other law or regulation.
   3. Personal Use and Beneficial Owner: You are using the Services for your own personal or organizational benefit, and not on behalf of or for the benefit of any third party (unless such third party has also been identified and verified by the applicable compliance provider). You are the true beneficial owner of any Digital Assets you deposit, and you are not depositing assets that belong to another person or entity (other than an entity for which you are an authorized representative).
   4. Ownership of Assets: All Digital Assets you deposit into any Vault are owned by you, and you have good and marketable title to such assets, free and clear of any liens, claims, security interests, charges, or encumbrances. You will not deposit any Digital Assets acquired through borrowing or any form of leverage unless you have disclosed such to the applicable compliance provider and ensured it does not violate any agreement or law. You further represent that no Digital Asset you deposit is derived from, or will be used for, any illegal or fraudulent activity, including money laundering, terrorist financing, tax evasion, or any other financial crime.
   5. Accurate Information: You have provided and will maintain truthful, current, and complete information about yourself and, if applicable, your organization during account registration and verification processes. This includes your legal name, address, contact information, identity documents, and any other information required for know-your-customer (KYC) or Anti-Money Laundering (AML) purposes. You agree to promptly update any information that changes. You represent that you are not impersonating any other person or using any alias or false identities.
   6. Compliance with Laws: You will only use the Services in full compliance with all laws and regulations that apply to you, including those concerning financial services, digital assets, anti-money laundering, anti-corruption, securities, and taxes. You confirm that you will not use the Platform for any unlawful purpose such as gambling, fraud, sanctions evasion, intellectual property infringement, or the operation of a ponzi/pyramid scheme.
   7. Understanding of Risks: You have a sufficient understanding of blockchain technology, digital assets, smart contracts, and the risks associated with them to make an informed decision about using the Services. You acknowledge that you have read the Risk Disclosure in Section 9 and the Comprehensive Risk Disclosures in Section 19 and are aware of, and able to bear, the potential risks of loss involved in depositing Digital Assets and participating in yield-generating strategies. You are financially able to bear such risks up to a total loss of your deposited assets.
   8. No Reliance on Advice: You acknowledge that BITS has not provided you with any investment, legal, or tax advice, and that you have had the opportunity to consult your own advisors before using the Services. You are not relying on BITS or the Platform for any advice or recommendations regarding Digital Asset transactions.
   9. No Infringing or Harmful Use: You will not use the Services to transmit any harmful code, to engage in any activities that harm or disrupt the Platform, or in any manner that infringes on the rights of others. In particular, you will not upload or transmit any malware, viruses, or other destructive software, and you will not harass, threaten, or defraud BITS or any third party through your use of the Services.
   10. Further Assurances: You will execute and deliver any additional documents and instruments, and take any other actions reasonably required, to fulfill the intent of these representations or to comply with applicable law or requests of governmental authorities. You understand that BITS and applicable compliance providers are relying on the above representations in providing Services to you. If at any time any of the above statements is or becomes untrue, you must notify the appropriate party immediately and cease using the Services.

4. Account Registration and KYC/AML Compliance

   1. Compliance Framework Overview

      BITS maintains a compliance posture regarding know-your-customer (KYC) and Anti-Money Laundering (AML) requirements in accordance with U.S. federal law and the laws of the State of Wyoming. However, the specific implementation of KYC/AML procedures depends on the service pathway you choose:

      • For Self-Service Users: KYC/AML compliance is maintained through the Core Foundation, an independent third-party intermediary provider. When you access the Platform through self-service options, you will undergo identity verification and compliance screening through the Core Foundation's systems, not directly with BITS.
      • For Institutional/Bespoke Users: KYC/AML compliance may be conducted directly by BITS or through other approved institutional compliance providers, depending on the specific Account Control Agreement (ACA) and custody arrangements.
   2. Registration Requirements

      To access Services, you must complete the applicable registration and verification process. This process includes providing all requested information for identity verification, including but not limited to your name, date of birth or date of incorporation, nationality, address, telephone number, email, government identification number (e.g., social security or tax ID), and any beneficial ownership or account funding information required by the applicable compliance provider.

      Required documentation may include a passport, driver's license, proof of address, incorporation documents, or other verification materials as determined by the compliance provider. You authorize the applicable compliance provider to make inquiries, either directly or through third-party services, to verify your identity and to take actions reasonably deemed necessary based on the results of such inquiries.

   3. Identity Verification and Ongoing Due Diligence

      By using the Services, you agree to cooperate with all identity verification, background checks, source of funds inquiries, and other compliance steps deemed necessary by the applicable compliance provider. This may include providing additional information or documents at any time, either during onboarding or on a periodic basis, to ensure the continued legality of the relationship and your transactions.

      For self-service Users, the Core Foundation will conduct such verification procedures independently of BITS. For institutional Users, BITS or the designated institutional compliance provider will conduct such procedures. Your failure to timely provide accurate information and documentation in response to such requests may result in service delays, suspension of your access, or termination of services.

   4. Screening and Sanctions

      Users will be screened against lists of prohibited persons, including sanctions lists maintained by the U.S. Office of Foreign Assets Control (OFAC) and other authorities. This screening will be conducted by the applicable compliance provider (Core Foundation for self-service Users, BITS or designated provider for institutional Users).

      If you or any party associated with you (such as an ultimate beneficial owner of an entity account) is identified as a prohibited or high-risk person, access may be rejected or immediately suspended. You represent that you and any person or entity you represent are not subject to any such sanctions or legal prohibitions.

   5. Account Security

      You are responsible for maintaining the confidentiality and security of your account credentials, including your password and any API keys or private keys associated with Digital Asset wallets. You must not share your login information with anyone or allow any other person to access your account. If you suspect that your account has been compromised or accessed without authorization, you agree to notify the appropriate service provider immediately.

      We may require you to use multi-factor authentication or other security measures, and you must follow applicable security procedures. Neither BITS nor any compliance provider will be liable for any loss or damage arising from unauthorized access to your account resulting from your failure to secure your credentials.

   6. Use of Personal Data

      You acknowledge that the applicable compliance provider will collect, use, and store your personal information as necessary to provide compliance services and meet legal obligations. This includes using third-party services for identity verification and transaction monitoring. Information may be disclosed to government authorities if required by law or to comply with legal process.

      For self-service Users, the Core Foundation's privacy practices will govern data handling. For institutional Users, BITS's Privacy Policy (incorporated herein by reference) or the designated compliance provider's privacy practices will apply. By using the Services, you consent to the collection and use of your data in accordance with the applicable privacy policies and laws.

   7. Account Restrictions and Monitoring

      The applicable compliance provider reserves the right to refuse service, or to suspend, terminate or restrict any account, at any time for reasons including but not limited to breach of these Terms, suspicion of fraudulent or illegal activity, failure to provide requested information, or upon request by law enforcement.

      You must use your account only for intended purposes and not for any improper use. You will not create multiple accounts to bypass any limits or restrictions, and you will not use any automated means to access services except through officially provided APIs and in compliance with their rules.

   8. Intermediary Relationship Clarification
      • For Self-Service Users: You acknowledge that your KYC/AML compliance relationship is with the Core Foundation, not directly with BITS. The Core Foundation operates independently and maintains its own compliance procedures, risk tolerances, and operational standards. BITS does not control or oversee the Core Foundation's compliance processes, though BITS may rely on the Core Foundation's compliance determinations for service provision.
      • For Institutional Users: KYC/AML procedures may be conducted directly with BITS or through designated institutional compliance providers as specified in your Account Control Agreement. In the event of account issues, compliance questions, or verification problems, you should contact the appropriate compliance provider directly. BITS will cooperate with compliance providers as necessary but cannot override or circumvent their independent compliance determinations.

5. Description of Services

   1. Overview of the BITS Platform

      BITS provides a financial technology platform that enables Users to stake their Bitcoin or Bitcoin-backed assets productively. Users deposit BTC or supported wrapped BTC tokens ("Deposited Assets") into a BITS Vault, and in exchange receive newly issued BITS Tokens that represent their deposit. BITS then facilitates the aggregation of these Deposited Assets and arranges for them to be used in legitimate blockchain staking strategies through vetted Staking Providers. The yield generated by these strategies is used to benefit the Users who made the deposits, after deducting applicable fees.

   2. Non-Custodial Technology Layer

      BITS operates as a technology service provider utilizing non-custodial smart contract vaults, similar to other major DeFi protocols. When you deposit Digital Assets into a Vault, the assets are managed by smart contract logic deployed on supported blockchains. BITS does not have unilateral control over user funds beyond what is programmatically defined in the smart contract protocols.

      You acknowledge that by using the Services, you authorize the smart contract systems to pool your assets with those of other Users and deploy them in staking strategies through approved Staking Providers. However, BITS does not act as a broker, dealer, investment advisor, or bank and no fiduciary relationship is created between you and BITS by this Agreement. BITS provides the infrastructure and smart contract tools, but all decisions to participate in a Vault or strategy are made voluntarily by you as the asset owner.

      For institutional arrangements requiring traditional custody solutions, Users may opt for Account Control Agreements (ACAs) with approved third-party custodians (such as BitGO or COBO). Such arrangements are separate from the standard Platform operation and subject to additional terms.

   3. BITS Tokens (Tokenized Deposits)

      When you deposit Digital Assets into a Vault, the Platform will issue you an equivalent amount of BITS Tokens (minus any fees, if applicable) to denote your share in that Vault. For example, if you deposit 1 BTC, you may receive 1 BITS-BTC token (or similar representation) in return. The BITS Token serves as a digital receipt or claim for your deposited assets and any earned yield.

      BITS Tokens may be recorded on a blockchain or within the Platform's internal ledger. They are intended to be used within the Platform for tracking your balance and for redemption of assets. BITS Tokens may also be "wrapped" into wBITS tokens, which accrue yield through a steadily increasing exchange rate mechanism.

      Transfer of BITS Tokens may be restricted to whitelisted addresses or other verified Users to ensure compliance. Any transfer of BITS Tokens outside of authorized channels is prohibited and may result in the loss of ability to redeem the underlying assets. You must exercise caution in handling your BITS Tokens—anyone with access to your BITS Tokens or the private keys controlling them may be able to redeem your assets. BITS is not responsible for any loss due to your transfer of BITS Tokens to an unsupported wallet or third party.

   4. Use of Deposited Assets (Staking Strategy)

      By depositing assets and using the Services, you authorize BITS and the Platform's smart contracts to take actions with your Deposited Assets as reasonably necessary to generate yield, consistent with the Services' design. This includes pooling your assets with other Users' assets and deploying them through Staking Providers for legitimate blockchain staking activities.

      The details of the active strategies, eligible staking parameters, and risk profiles may be provided in the Platform's documentation and may change over time. BITS will use commercially reasonable efforts to vet Staking Providers and structure these arrangements securely; however, BITS does not guarantee any particular Staking Provider's performance or the return of funds. All transactions involving Staking Providers carry inherent risk (see Risk Disclosures in Section 9 and Comprehensive Risk Disclosures in Section 19).

   5. Yield and Rewards

      When yield is generated from the Staking Providers' activities, the Platform will allocate such yield to Users proportionally. Yield is distributed in Core tokens and QBITS protocol tokens. QBITS entitlements accrue on a time-weighted basis, with actual distribution deferred until the QBITS Token Generation Event (TGE) expected in future quarters.

      Yields will be net of fees—meaning BITS will subtract its platform fees or performance fees from the gross yield before crediting your balance. The specific fee rates and structures will be disclosed in the Platform or in a fee schedule provided to you, and may be updated from time to time.

      BITS does not guarantee that any yield will be generated at all, or that any particular rate of return will be achieved. Yield rates displayed or advertised are estimates or historical figures and are subject to change based on market conditions and Staking Provider performance. By using the staking Service, you acknowledge that yield rates may be zero or may fluctuate and that your participation carries risk of loss, not a guaranteed return.

   6. Redemption of Assets

      You have the right to redeem your Deposited Assets by returning an equivalent amount of BITS Tokens to the Platform (a "Withdrawal" request). There are no withdrawal holding periods in the initial iteration of the Platform, though this may change in future versions or for specific institutional arrangements.

      Upon proper request, BITS will facilitate the return of your underlying Digital Assets. In practice, this means that if you wish to withdraw, the Platform may need to unwind the corresponding portion of the assets from the Staking Provider. Once the underlying assets are available, your BITS Tokens will be deducted or burned and the equivalent Digital Asset (BTC or wrapped BTC) will be transferred back to you, minus any applicable withdrawal fees.

      We will use reasonable efforts to process withdrawals promptly, but we cannot guarantee immediate liquidity. There may be a waiting period for the Staking Provider to return funds or for the smart contract to process the withdrawal. BITS reserves the right to impose limits on withdrawals (such as minimum or maximum withdrawal amounts and frequency) or require advance notice for large withdrawals, in line with liquidity management and operational considerations. We will notify Users of any such limitations in advance when possible.

   7. Conditions for Withdrawal

      In order to initiate a withdrawal, you must follow the procedures outlined on the Platform, which may include specifying the destination wallet address for your Digital Asset. It is your responsibility to provide an accurate and authorized withdrawal address. BITS will not be liable for any loss of assets due to an incorrect or unsupported address provided by you. If the address you provide is incompatible or if other issues arise (such as network congestion or maintenance), we may delay or reject the withdrawal until the issue is resolved.

      Additionally, if your account or a particular asset is under investigation or hold (for example, due to a court order, legal process, or suspicion of illicit activity by the applicable compliance provider), withdrawals may be suspended until the matter is resolved.

   8. Suspension or Modification of Services

      BITS reserves the right to suspend, modify, or discontinue any aspect of the Services at any time, especially if we believe it is necessary for security reasons, legal compliance, or to protect our Users. This includes the right to temporarily or permanently halt deposits, withdrawals, or yield payouts for any Vault or asset, for instance in extreme market conditions, technical emergencies, or if required by regulators. In such events, BITS will make reasonable efforts to notify Users and to resume normal operations as soon as feasible, but BITS shall not be liable for any consequences of such suspension or modification when done in good faith to address legitimate concerns.

6. Fees and Taxes

   1. Platform Fees

      By using the Services, you agree to pay all applicable fees. BITS may charge fees in various forms, including but not limited to a percentage cut of yield (performance fee), management or administrative fees, withdrawal fees, or token conversion fees. Our fee schedule is (or will be) made available on the Platform or in a separate Fee Schedule document. Fees may be updated from time to time, and any changes will be communicated via an update to the fee schedule on our website or app. Unless stated otherwise, any changes to fees are effective immediately upon posting. If you do not agree with a fee change, your sole remedy is to stop using the affected Service (which may require closing your account or withdrawing your assets). Continued use of the Services after a fee change constitutes your acceptance of the new fees.

      Fees are typically automatically deducted from yields or transactions. For example, if a Vault generates a 5% annual yield and the performance fee is 1%, your net yield would be 4%, with 1% retained by BITS. In some cases, fees may be taken in the form of the Digital Asset or in an equivalent value of another asset (e.g., in stablecoins or BITS Tokens). BITS may, at its discretion, offer fee waivers or discounts for certain Users or promotional periods; any such temporary benefit does not waive our right to enforce the standard fees thereafter.

   2. External Costs

      You are responsible for any external costs that may arise from your use of the Services, such as blockchain transaction fees (network gas fees) when transferring Digital Assets to or from the Platform, fees charged by compliance providers (including the Core Foundation for self-service Users), or fees charged by your bank or card provider if fiat transactions are involved. BITS is not responsible for differences in exchange rates or fees that third-party services (like banks, card issuers, other networks, or compliance providers) impose.

   3. Taxes

      BITS does not provide tax advice. You are solely responsible for understanding and fulfilling all tax obligations arising from your use of the Services. This may include reporting and paying any income, capital gains, sales, use, value-added, or similar tax in any applicable jurisdiction. BITS makes no representations about the tax treatment of holding or using Digital Assets or participating in the staking strategies. The rewards or yield you earn may be considered taxable income in your jurisdiction; likewise, converting between assets could be a taxable event. It is your responsibility to keep records and determine what taxes apply to transactions and rewards.

      BITS may provide tools for you to view your transaction history, but you should also keep your own records. In certain cases, if required by law, BITS or the applicable compliance provider may withhold taxes or provide you or the relevant government agency with account information (for example, issuing IRS Form 1099s for U.S. taxpayers, if applicable). However, unless required by law, taxes are generally not withheld—you must pay them yourself. We strongly urge you to consult with a tax professional regarding your use of the Services.

   4. No Refunds

      All fees and transactions generally are final and non-refundable, unless a specific error was caused by BITS. If you believe an error or mischarge has occurred, you must contact us promptly and provide evidence. We will investigate and, if the error was on our side, correct it or issue a refund at our discretion. However, network transaction fees, compliance provider fees, and similar third-party costs cannot be refunded by BITS.

7. Prohibited Activities

   When using the BITS Platform and Services, you agree not to engage in any of the following:

   1. Illegal Activities: Using the Services for any unlawful purpose, or to further or support any criminal activity. This includes, but is not limited to, money laundering, terrorist financing, fraud, tax evasion, Ponzi or pyramid schemes, trafficking of illegal goods or services, dealing in stolen funds or assets, or any activity that violates any law, regulation, or court order.
   2. Violation of Sanctions or Export Laws: Transacting with or on behalf of any person, entity, or country that is embargoed or sanctioned by the United States or other applicable jurisdiction. You shall not use your account to circumvent or violate any economic sanctions or export control laws.
   3. Unauthorized Securities or Lending: Using the Platform in a manner that violates securities laws or financial services laws (for example, attempting to use the Platform to offer securities, solicit investments, or engage in unregistered lending, brokerage, or exchange activities beyond the intended scope of the Platform). You shall not use the Services to create or trade any investment product that is not explicitly permitted by BITS.
   4. Interference with Platform: Engaging in any activity that disrupts, interferes with, or degrades the integrity or performance of the Platform or related systems. This includes: (i) attempting to hack, tamper with, or gain unauthorized access to the Platform's software, servers, security measures, or User accounts; (ii) using viruses, bots, worms, or any harmful code on the Platform; (iii) imposing an unreasonable or disproportionately large load on our infrastructure (e.g., excessive API calls or other abusive actions).
   5. Circumvention: Attempting to circumvent any security feature or access controls of the Platform, including attempting to use the Services if you have been suspended or if you are in a jurisdiction where the Services are not offered or are prohibited. You agree not to use any anonymization techniques (such as Tor, VPNs, or mixing services) with the intent of hiding your location or identity in order to break these Terms or any applicable law. Using privacy tools for legitimate privacy reasons is not itself a violation, but doing so to skirt compliance checks is.
   6. Data Scraping and Automated Use: Using any automated means (such as scripts, robots, or web crawlers) to collect information from the Platform or to interact with the Services, without our express permission is strictly prohibited. Normal use of provided APIs according to their documentation is allowed; any other automated extraction or mass collection of data is prohibited. You also agree not to reverse engineer, decompile, or disassemble any aspect of the Platform or the software used in providing the Services, except to the extent expressly permitted by law.
   7. Unauthorized Framing or Linking: You will not frame the Platform within another website, or resell or redistribute any part of the Services, without express written consent. Additionally, you must not mirror or copy any content on the Platform on another server or device.
   8. Misuse of Communications: If the Platform offers any communication features (forums, chat, customer support channels, etc.), you agree to use them respectfully. You will not harass, abuse, or spam BITS personnel or other Users. You will not post content that is defamatory, obscene, offensive, or that violates any party's rights. Impersonating any person or entity, or falsely stating your affiliation with any person or entity, is prohibited.
   9. Unapproved Marketing and Promotions: You will not use the BITS name, logo, or brand to advertise or promote any product or service without our prior written approval. Additionally, you will not use the Platform to transmit unsolicited commercial communications (such as spam or pyramid scheme invitations) to anyone.
   10. Third-Party Platform Abuse: If BITS at any time integrates with third-party services or APIs (for example, a third-party wallet or exchange), you must abide by the terms of those third-party services as well, and you will not do anything through BITS that causes a violation of those third-party terms.

   Violation of any of the above can result in immediate suspension or termination of your account and use of Services, and may also result in legal action against you by BITS or relevant authorities. We reserve the right to report any suspected criminal activity to law enforcement and to provide law enforcement with any requested information about your account or transactions consistent with applicable privacy policies and law.

8. Intellectual Property and Proprietary Rights

   1. Ownership of Platform: All content and materials on the BITS Platform, including but not limited to the software, algorithms, smart contract code, web design, text, graphics, logos, trademarks, service marks, videos, audio, information, and any other files (collectively, the "Platform Content"), are the property of BITS or its licensors and are protected by intellectual property laws. BITS and/or its licensors retain all rights, title, and interest in and to the Platform Content and Services, including all associated intellectual property rights, and except for the limited use license expressly provided below, nothing in these Terms grants you any ownership or other rights in the Platform or its content.
   2. License to Use the Services: Subject to your compliance with these Terms, BITS grants you a personal, limited, revocable, non-exclusive, non-transferable, and non-sublicensable license to access and use the Platform and Services for your own internal, lawful use. This license is provided solely for you to utilize the Services as intended (for example, to deposit assets and manage your account), and not for any other purpose. You must not copy, reproduce, distribute, modify, create derivative works from, publicly display, or commercially exploit any portion of the Platform Content, except as expressly permitted by us in writing. You also agree not to remove or alter any copyright, trademark, or other proprietary rights notices on the Platform or any materials you download or print from the Platform.
   3. Trademarks: BITS, BITS Blockchain Inc., the BITS logo, and any other BITS product or service names or slogans that may appear on the Platform are trademarks of BITS or our affiliates, and may not be copied, imitated, or used, in whole or in part, without our prior written permission. All other trademarks, names, or logos appearing on the Platform that are not owned by BITS are the property of their respective owners and may not be used without permission of those owners. Reference on the Platform to any third-party products, services, companies, or trademarks is for informational or identification purposes only and does not constitute an endorsement, sponsorship or recommendation by BITS.
   4. User Feedback: If you choose to provide any suggestions, ideas, feedback, or recommendations regarding the Platform or Services ("Feedback") to BITS, you hereby assign to BITS all right, title, and interest in and to the Feedback, and acknowledge that BITS may freely use and exploit the Feedback in any manner and for any purpose (including incorporating it into the Platform or Services) without any obligation to you. If such assignment is not enforceable under applicable law, you grant BITS a worldwide, perpetual, irrevocable, royalty-free license to use and incorporate the Feedback into the Platform and our business. You agree that you will not be due any compensation for your Feedback or any use thereof by BITS, and that BITS is not required to treat any Feedback as confidential.
   5. Open Source and Third-Party Components: The Platform may include or rely on certain open-source software or third-party software. Each such component is licensed under its own terms (each an "OSS License"). Nothing in these Terms limits your rights under the terms of any applicable OSS License. However, when using any such components as part of the Platform, you agree to comply with these Terms to the extent they do not conflict with the open-source licenses.
   6. No Reverse Engineering: You agree not to reverse engineer, decompile, disassemble, or otherwise attempt to derive the source code or underlying ideas, algorithms, or structure of any part of the Platform or Services, except and only to the extent that such activity is expressly permitted by applicable law notwithstanding this limitation. If such law applies, you agree to first request the information from us (if we are obligated to provide it) and refrain from such activities unless and until we fail to comply.
   7. Reservation of Rights: All rights not expressly granted to you in these Terms are reserved by BITS and its licensors. There are no implied licenses granted under these Terms. BITS may terminate the above license at any time if you breach the Terms or if needed to protect the interests of BITS or third parties. Upon termination of the license, you must cease all use of the Platform Content and, at our option, return or destroy any copies of Platform Content in your possession.

9. Risk Disclosures

   Using the BITS Platform and participating in digital asset transactions and yield-generating strategies involve significant risks. You acknowledge and agree that you have carefully considered and accept the following material risks, among others, in using the Services. The risks listed here are not exhaustive, and you should conduct your own research and consult professionals to understand all risks before participating. For comprehensive risk disclosures including interface-specific warnings and user responsibilities, see Section 19.

   1. Volatility Risk: Digital Assets like BTC are highly volatile. The value of your Digital Assets and any yields thereon can fluctuate dramatically over short periods of time. Market prices are unpredictable and can be affected by a wide range of factors including market sentiment, regulatory events, technological changes, and macroeconomic developments. You may incur significant losses if the market value of your Digital Assets declines.
   2. Total Loss Risk: When you deposit assets into the Platform, there is a risk of total loss of those assets. This could occur due to factors such as a catastrophic failure of the underlying strategy, default or fraud by a Staking Provider, hacking of smart contracts, or extreme market events. You should only deposit assets that you can afford to lose entirely.
   3. No Insurance or Guarantee: Assets held or deployed via the Platform are not insured by any governmental agency or private insurer. Unlike bank deposits, which can be FDIC-insured, or securities accounts, which can have SIPC protection, digital asset deposits with BITS have no such protections. BITS does not guarantee any returns or protection of principal. If we or the Staking Providers incur losses, there is no insurer or guarantor (public or private) that will compensate you.
   4. Regulatory Risk: The legal and regulatory environment for cryptocurrencies and related services is unsettled and rapidly evolving. Laws and regulations (including how digital assets are defined or treated by regulators) can change at any time in unpredictable ways. Regulatory actions could severely restrict or even make it illegal to operate or use the Services in some jurisdictions. Governments may impose restrictions, licensing requirements, or bans that could limit your ability to use your assets or the Platform. Such changes might include, for example, regulations on offering yield or staking products, classification of BITS Tokens or the Service as securities or investment contracts, or requirements to halt operations. Legislative or regulatory changes may adversely affect the value, transferability, or legality of your Digital Assets or the Services and could result in the termination of some or all Services with little or no notice.
   5. Liquidity Risk: The ability to withdraw your assets on demand is not guaranteed. While BITS intends to allow withdrawals, various conditions might delay or prevent withdrawals. For example, if many Users withdraw simultaneously or if a Staking Provider requires a notice period to return assets, you might experience delays. In extreme market conditions, BITS might temporarily halt withdrawals or impose limits. Additionally, if your BITS Tokens are restricted from transfer, you may not be able to liquidate your position except through the Platform's withdrawal mechanism. This illiquidity means you might not be able to access your funds when desired.
   6. Counterparty Risk: When your assets are provided to Staking Providers or other third parties (including potentially decentralized protocols), you are exposed to the risk that those parties may not meet their obligations. Staking Providers might fail to return staked assets on time or at all, might become insolvent or bankrupt, or could mismanage or lose the funds. Even if collateral is used, its value could drop or it could be insufficient to cover losses. BITS performs due diligence but does not guarantee the performance or creditworthiness of any third party. If a Staking Provider defaults or goes out of business, you may lose some or all of your assets or expected returns.
   7. Smart Contract and Technological Risk: The BITS Platform and Vaults operate using smart contracts and blockchain technology. Smart contracts are software code—they could have bugs, vulnerabilities, or could be subject to exploits by malicious actors. Hackers might find ways to exploit the smart contracts or other aspects of the Platform to steal funds or cause losses. Additionally, there could be unforeseen flaws in the design of the Vault or token system. The underlying blockchain networks (whether Bitcoin, Ethereum, or others) might also experience failures or attacks (such as 51% attacks, consensus failures, chain splits) that could impact the operation of the Platform. You accept the risk of software and hardware failures, security breaches, and cyber-attacks that could result in the loss of Digital Assets.
   8. Operational Risk: BITS itself could encounter operational challenges. These include internal system failures, human error, or infrastructure breakdowns. We could be subject to cyber attacks on our own systems (distinct from the blockchain or smart contract attacks mentioned above), which might compromise user accounts or the Platform's integrity. We could also suffer outages due to power loss, telecommunications failure, natural disasters, or other events. While BITS takes precautions to secure its systems (e.g., encryption, security audits), no system is perfectly secure or reliable. There is also a risk that BITS (the company) could become insolvent, experience financial difficulties, or be forced to cease operations for business reasons. If BITS were to shut down or enter bankruptcy, the handling of Users' assets could be complex and outcomes uncertain.
   9. Compliance Provider Risk: For self-service Users, reliance on the Core Foundation or other compliance providers introduces additional operational and counterparty risks. If a compliance provider experiences technical failures, changes its policies, becomes insolvent, or is subject to regulatory action, your ability to access or use the Services may be impaired. BITS does not control third-party compliance providers and cannot guarantee their continued operation or service quality.
   10. Market and Economic Risk: The yield generated by the Staking Providers is often tied to broader market conditions. If market demand for staking or blockchain network participation changes, yield rates can drop or go to zero quickly. In some cases, rapid moves in the crypto markets might cause Staking Providers to incur losses (for instance, if the strategy involves trading or providing liquidity). Moreover, macroeconomic events affecting interest rates, currency stability, or investor confidence can indirectly affect the crypto markets and yield opportunities.
   11. Asset-Specific Risk: Each Digital Asset (BTC or wrapped BTC) carries its own set of risks. Bitcoin's value depends on continued adoption and community consensus. Wrapped BTC or other tokenized assets carry additional smart contract and custodial risks since a wrapped token's value depends on the underlying BTC being properly held or managed by a custodian or smart contract. If you deposit a wrapped BTC product, you are subject to the risk that the wrapping mechanism fails or the peg breaks (for example, if the issuer of a wrapped BTC cannot redeem it 1:1 for BTC).
   12. No Fiduciary Duties; No Advice: BITS is not your broker, intermediary, agent, or advisor. We have no fiduciary duty to you, meaning we are not acting in your best interest beyond the contractual obligations in these Terms. We may have conflicts of interest in operating the Platform or selecting Staking Providers (for instance, we might have financial incentives or relationships that are not disclosed to you). You should not expect BITS to advise you on the merits of any deposit or strategy. All decisions to use the Service are solely yours. If you rely on any information from the Platform (such as projected yields or historical performance), you do so at your own risk; such information is not guaranteed to be accurate or complete.
   13. Irreversibility of Transactions: Blockchain transactions (such as sending BTC to the Vault or withdrawing it) are generally irreversible. If you send assets to the wrong address or if unauthorized persons access your account and initiate a transfer, you may lose those assets with no recourse. BITS does not have the ability to reverse blockchain transactions once confirmed. Similarly, if erroneous or fraudulent transactions occur on the Platform, correcting them might not be possible if assets have left our control. You must exercise caution and double-check details when initiating transactions.
   14. Legal and Tax Risk: It is your responsibility to understand and comply with local laws and tax regulations. You could face legal consequences if you violate laws by using the Service (for example, if your jurisdiction bans participation in crypto staking/yield programs). Tax laws regarding digital assets are also evolving; you might face unanticipated tax liabilities or reporting requirements. BITS is not responsible for advising you of these obligations.
   15. Government or Law Enforcement Action: Assets in the Vault or held via the Platform could become subject to seizure or forfeiture by government order if, for example, they are associated with illegal activity or if a regulator asserts jurisdiction over the Platform's operations. BITS or compliance providers may be compelled to freeze or surrender assets in response to legal orders, and such actions could occur without your consent. While we aim to only comply with lawful and valid orders, government actions can sometimes be broad or preventative. You assume the risk of such government actions and agree that BITS is not liable for any losses or inability to access assets resulting from compliance with law enforcement or regulatory directives.

   By using the Services, you acknowledge that you have read and understood the above risks and other risks associated with digital assets, and that BITS has no control over many of these risks. You agree that BITS is not responsible for any losses you incur due to the materialization of these risks, except as expressly set forth in these Terms. If you are not comfortable with these risks, you should not use the BITS Platform.

10. Disclaimers of Warranties

    THE BITS PLATFORM AND ALL SERVICES ARE PROVIDED ON AN "AS IS" AND "AS AVAILABLE" BASIS, WITHOUT ANY REPRESENTATION OR WARRANTY OF ANY KIND, EITHER EXPRESS, IMPLIED, OR STATUTORY. To the maximum extent permitted by applicable law, BITS (including our officers, directors, employees, and agents) specifically disclaims any implied warranties of title, merchantability, fitness for a particular purpose, non-infringement, and any warranties arising out of course of dealing or usage of trade.

    Without limiting the generality of the foregoing, BITS does not warrant that:

    1. Service Availability: The Services will be uninterrupted, timely, secure, or error-free. We do not guarantee that the Platform will always be available or that it will operate without flaws. There may be service interruptions, delays, or errors in functionality. Maintenance, upgrades, or unforeseen outages may make the Services unavailable at times. You acknowledge that downtime and outages can occur.
    2. Financial Results: Any yield or financial results will meet your expectations. All yield figures or performance indications are estimates or historical references and not guaranteed. BITS makes no warranty or promise that you will actually earn any particular amount of return or that any asset value will appreciate. Any projections or forward-looking statements on our Platform are speculative and provided for informational purposes only.
    3. Information Accuracy: The information on the Platform is accurate or complete. Although we strive to provide accurate information, BITS does not guarantee the accuracy, timeliness, or completeness of any data or content (such as pricing data, educational materials, or third-party content links) on the Platform. Information may become outdated or inaccurate quickly, and BITS has no obligation to update any such information.
    4. Security: The Services will be free from viruses or other harmful components. You should use your own security software to protect your devices and wallets. We do not warrant that the Platform, its servers, or any emails or communications from us are free of malware or other harmful elements.
    5. Transaction Execution: Transactions will be executed without error. While we endeavor to execute transactions and update balances correctly, mistakes or bugs may occur (e.g., a smart contract logic error). We do not warrant that orders, deposits, withdrawals, or rewards calculations will always be executed perfectly. In the event of a manifest error (for example, an obvious miscalculation or display error), we reserve the right to correct such error, including reversing or adjusting transactions to what is fair and intended.
    6. Unauthorized Access: Security measures will prevent all unauthorized access. Although we implement security practices, we do not warrant that unauthorized parties will never gain access to or misuse your account or any related information. You acknowledge that any digital environment has inherent security risks, and BITS disclaims liability for breaches that are not due to our gross negligence or willful misconduct.
    7. Third-Party Services: The performance or reliability of third-party services, including compliance providers such as the Core Foundation. BITS does not control third-party services and makes no warranties regarding their availability, security, or functionality.
    8. No Advice: Any information provided by BITS or through the Platform (such as blog posts, articles, support documentation, or communications from BITS staff) is for general information only and does not constitute investment, financial, legal, or tax advice. BITS is not advising you personally concerning the nature, potential, desirability, or value of any asset or strategy. You should consult your own professional advisors regarding your particular circumstances and the appropriateness of any actions.
    9. Third-Party Platform Content: If our Platform contains links or integrations to third-party websites, services, or resources, BITS provides them for your convenience only. We do not endorse, control, or make warranties about any third-party services or content. If you access any third-party content or services (for example, a linked exchange, wallet, or DeFi protocol), you do so at your own risk. BITS is not responsible for any loss or damage of any sort incurred from dealing with any third-party.
    10. Beta Services: From time to time, BITS may offer new features or services in a beta testing version. These beta services are subject to change and may be even less reliable than our normal services. They are provided as-is with no warranties whatsoever, and we may discontinue them at any time.

    Some jurisdictions do not allow the exclusion of certain warranties, so some of the above disclaimers may not apply to you. In such case, the remaining disclaimers shall remain in full force and effect.

11. Limitation of Liability

    To the maximum extent permitted by law, in no event shall BITS or its affiliates, or their respective directors, officers, employees, agents, or representatives, be liable for:

    1. Indirect Damages: Any indirect, incidental, special, consequential, or punitive damages, or any loss of profits, revenue, data, goodwill, or other intangible losses, arising out of or related to your access to or use of (or inability to use) the Services, whether based in contract, tort (including negligence), strict liability, or any other legal theory, and even if BITS has been advised of the possibility of such damages. This limitation includes damages resulting from any mistakes, omissions, interruptions, deletion of files or emails, errors, defects, viruses, delays in operation or transmission, any failure of performance, the cost of procurement of substitute services, or any unauthorized access to or alteration of your transmissions or data.
    2. Third-Party Actions: Any damage or loss resulting from hacking, tampering, or other unauthorized access to or use of the Services or your account, including any unauthorized use of any information or transactions therein. Any damage or loss resulting from the acts or omissions of any third party, including Staking Providers, other users, payment providers, compliance providers (including the Core Foundation), or other service providers with whom we work or to which our Platform may link. BITS is not responsible for the conduct, whether online or offline, of any other user or third party.
    3. Technical and Market Risks: Any loss of Digital Assets or funds due to technical reasons (such as blockchain forks, rollbacks, smart contract failures, etc.) or due to regulatory actions (such as seizures or injunctions) or due to market events (such as extreme slippage, devaluation of assets, or lack of liquidity).
    4. User Error: Any loss arising from incorrect addresses or user errors. If you send a deposit to an incorrect address not associated with us, or if you provide a wrong withdrawal address, BITS is not liable for any irreversible loss of funds.
    5. Compliance Provider Issues: Any loss or damage arising from the acts, omissions, failures, or insolvency of compliance providers, including but not limited to the Core Foundation. This includes service interruptions, policy changes, security breaches, or cessation of operations by such providers.
    6. Aggregate Liability Cap: In no event will BITS's aggregate liability for any claims arising out of or related to this Agreement or the Services exceed the total amount of fees actually received by BITS (in USD equivalent) from you in the twelve (12) months immediately preceding the event giving rise to the claim, or one hundred U.S. dollars (USD $100), whichever is greater. If you have not paid any fees to BITS (for example, if BITS only deducted performance fees from yield), then BITS's liability shall not exceed $100 in aggregate.

       The limitations above apply even if a remedy fails of its essential purpose. Because some jurisdictions do not allow the exclusion or limitation of certain damages, the above limitations may not apply to you. In such jurisdictions, BITS's liability will be limited to the fullest extent permitted by law.

    7. Release: To the extent permitted by law, you release BITS and its affiliates from all liability for you having acquired or not acquired Digital Assets through the Platform. You release us from any and all liability relating to your interactions or agreements with any Staking Provider, compliance provider, or other third-party service. If you are a California resident, you waive California Civil Code § 1542 which says: "A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in their favor at the time of executing the release, that if known, would have materially affected their settlement with the debtor or released party."

12. Indemnification

    You agree to defend, indemnify, and hold harmless BITS, its affiliates, and their respective officers, directors, employees, agents, and representatives (the "Indemnified Parties") from and against any and all claims, damages, losses, liabilities, costs, and expenses (including reasonable attorneys' fees) arising out of or related to any third party claims, investigations, audits, or proceedings brought against any of the Indemnified Parties due to or arising out of:

    1. Your Breach: Your breach of these Terms. Any violation of this Agreement by you, including any breach of your representations and warranties in Section 3 or elsewhere.
    2. Your Use of Services: Your use of the Services. Your acts or omissions in using the Platform, including any content you submit or transactions you initiate. For example, this includes any claims arising from your use of the Services in a manner not permitted by these Terms or by law.
    3. Your Legal Violations: Your violation of any law or regulation. Any alleged violation of law by you, such as using the Services in a banned jurisdiction or engaging in illegal activities described in Section 7. This includes any fines, penalties, or enforcement actions imposed by regulatory authorities due to your actions.
    4. Your Infringement: Your infringement of rights. Any allegation that any information or material you provided (such as if you posted content or transmitted data through the Platform) infringes or misappropriates any intellectual property, privacy, publicity, or other right of a third party.
    5. Your Wrongdoing: Your wrongdoing or negligence. Any fraud, gross negligence, willful misconduct, or misrepresentation committed by you, or any harm caused by you to any third party using the Services.
    6. Third-Party Disputes: Disputes with third parties. Any dispute between you and another user of the Services, or between you and any Staking Provider or compliance provider, that implicates BITS or requires BITS to respond to subpoenas, legal process, or take any action to protect its interests.

    BITS reserves the right, at your expense, to assume the exclusive defense and control of any matter subject to indemnification by you. If we do assume the defense of such a matter, you agree to cooperate with our defense of that claim and you shall not settle any such matter without our prior written consent. We will use reasonable efforts to notify you of any claim or demand that is subject to your indemnification obligation as soon as we become aware of it.

    This indemnity obligation shall continue even after you stop using the Services or your account is closed, relating to acts or omissions occurring during your use of the Services.

13. Governing Law

    This Agreement, and any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with it or its subject matter, shall be governed by and construed in accordance with the laws of the State of Wyoming, USA, without regard to its conflict of laws principles. The Federal Arbitration Act (9 U.S.C. §§ 1-16) will govern the interpretation and enforcement of the arbitration provisions in Section 14.

    If for any reason a dispute is not subject to arbitration or if any litigation or court proceeding is permitted under these Terms, you and BITS agree that any such proceedings shall be brought exclusively in the state or federal courts located in Cheyenne, Wyoming, and each party irrevocably consents to the personal jurisdiction and venue of those courts for such purposes. You and BITS waive any objection to jurisdiction and venue in such courts (including any defense based on forum non conveniens).

    One-Year Limitation: To the extent permitted by law, any claim or cause of action arising out of or related to the Services or these Terms must be filed within one (1) year after such claim or cause of action arose, or else it will be permanently barred. This limitations period does not apply to claims by BITS for fees or indemnification.

14. Dispute Resolution and Arbitration

    Please read this section carefully. It requires individual arbitration for most disputes and limits certain rights, including the right to pursue a class action. By agreeing to these Terms, you agree that any disputes will be resolved by binding arbitration, rather than in court, except for matters that may be taken to small claims court or instances of injunctive relief as provided below.

    1. Mandatory Arbitration: Except for the exceptions stated in Section 14.4 below, you and BITS agree that any dispute, claim, or controversy arising out of or relating to these Terms or the use of the Services (collectively, "Disputes") will be resolved solely by binding arbitration on an individual basis, and not in a court of law. You and BITS waive any right to a jury trial or to have the dispute heard in court before a judge.
    2. Arbitration Forum and Rules: The arbitration will be administered by the American Arbitration Association ("AAA") under its Commercial Arbitration Rules (or Consumer Arbitration Rules, if applicable based on the nature of your use) in effect at the time the arbitration is initiated, except as modified by this Section. You can find the AAA's rules on the AAA website (www.adr.org). If the AAA is unavailable or unwilling to handle the dispute, the parties shall agree on an alternative arbitral forum; if the parties cannot agree, a court of competent jurisdiction may appoint an arbitrator pursuant to 9 U.S.C. § 5.
    3. Arbitration Location and Procedure:

       In-person arbitration hearings will take place in Cheyenne, Wyoming, USA, unless you and BITS agree on a different location. If your claim is for $10,000 or less, you may choose whether the arbitration will be conducted: (a) solely on the basis of documents submitted to the arbitrator, (b) through a telephonic or video conference hearing, or (c) by an in-person hearing. For claims over $10,000, the right to a hearing will be determined by the AAA rules.

       The arbitrator is empowered to grant any relief that would be available in a court under law or in equity, subject to the limitations of liability and damages set forth in these Terms. The arbitrator shall follow the governing law (Section 13) and enforce the applicable statutes of limitation. The arbitrator's decision shall be in writing and provide the reasons for the award (unless the parties agree otherwise). Judgment on the arbitration award may be entered in any court having jurisdiction thereof.

    4. Exceptions to Arbitration: Small Claims and Injunctive Relief: Notwithstanding the foregoing arbitration agreement, either party may choose to pursue a Dispute in small claims court if it qualifies, so long as the matter remains in such court and on an individual (non-class) basis. Additionally, either party (or both parties) may seek injunctive or equitable relief in a court of competent jurisdiction for disputes related to intellectual property rights (e.g., trademarks, trade dress, domain names, trade secrets, copyrights) or unauthorized access to or misuse of the Services (for example, to prevent security breaches or fraudulent activity on the Platform). In such cases, you and BITS agree that the state or federal courts in Cheyenne, Wyoming shall have exclusive jurisdiction to grant the provisional relief, and such action shall not be deemed a waiver of the right to compel arbitration for any other claims. Once the request for injunctive relief is resolved, if the underlying Dispute remains, it shall be subject to arbitration under this Section.
    5. Prohibition of Class and Representative Actions: All claims and disputes must be arbitrated or litigated on an individual basis and not on a class, consolidated, or representative basis. You and BITS agree that the arbitrator has no authority to: (i) consolidate more than one person's claims, (ii) preside over any kind of representative or class proceeding, or (iii) award class-wide relief. You and BITS waive any right to a jury trial and to participate in a class action lawsuit or class-wide arbitration. If this class action waiver is found to be unenforceable or deemed invalid, then the entirety of this Dispute Resolution and Arbitration section (Section 14) shall be null and void (but the rest of the Terms shall remain in effect).
    6. Arbitration Fees and Costs:

       Payment of all filing, administration, and arbitrator fees will be governed by the AAA's rules. If your claim is for less than $10,000 and you certify that you cannot afford the AAA fees, BITS will consider advancing those fees on your behalf or paying them if required by applicable law. Otherwise, each party will split the arbitration fees and costs equally, and each party shall bear its own attorneys' fees unless the arbitrator awards fees to the prevailing party under applicable law or agreement. The arbitrator may award reasonable attorneys' fees and costs to the prevailing party if provided by law.

       The parties understand that, absent this mandatory provision, they would have the right to sue in court and have a jury trial. They further understand that, in some cases, the costs of arbitration could exceed the costs of litigation and the right to discovery may be more limited in arbitration than in court.

    7. Confidentiality: The arbitration proceedings, including any rulings, decisions, or awards by the arbitrator, shall be strictly confidential and not disclosed to anyone except the parties and their counsel, and as may be necessary to enforce or challenge the award in a court of law.
    8. Opt-Out Right: You have the right to opt out of arbitration within 30 days of first agreeing to these Terms. If you do not wish to be bound by the arbitration and class-action waiver provisions in this Section, you must notify BITS in writing within 30 days of the date you first accept these Terms (unless a longer period is required by applicable law). Your written notification must be mailed to our mailing address provided in Section 18 Contact Information and must include: (1) your name, (2) your account email or other identifier, (3) your mailing address, and (4) a statement that you opt out of the arbitration provision. If you do not opt out by the 30-day deadline, you will be bound by the arbitration agreement and class-action waiver in this Section.

    If any portion of this Section 14 is found to be unenforceable or unlawful (except for the class action waiver, which is addressed above), that portion shall be severed and the remaining portions of this Section shall remain in force. In any case, the remainder of the Agreement will continue to apply.

15. Changes to the Terms

    BITS may amend or update these Terms from time to time. We reserve the right to modify or replace any part of this Agreement in our sole discretion. If we make material changes, we will provide notice of such changes, such as by posting the updated Terms on our website or through the Platform user interface, and updating the "Effective Date" at the top. In certain cases, we may provide additional notice (such as an email notification or a pop-up notice upon login) for significant changes. It is your responsibility to review these Terms periodically. Unless we state otherwise, changes are effective immediately upon posting.

    By continuing to use the Services after the new Terms take effect, you are indicating your acceptance of the modified Terms. If you do not agree to any amended Terms, you must stop using the Services and may request to withdraw your assets and close your account (subject to any outstanding obligations).

    No modification or amendment to these Terms will be binding on BITS unless in a written instrument signed by a duly authorized representative of BITS or posted by BITS to the Platform for unilateral updates as described above. Specific terms and conditions (for example, promotional terms or additional product terms) that are posted on the Platform or presented to you may also apply, and if there is a conflict between those specific terms and these general Terms, the specific terms shall control for the relevant service or feature.

16. Termination

    1. By User: You may terminate this Agreement at any time by discontinuing use of the Services and closing your account. To close your account, you should withdraw all Digital Assets (assuming you meet any withdrawal requirements and it's legally and technically permissible) and follow any account closure procedures in the Platform. Closing your account will not relieve you of any obligations incurred prior to closure (such as any remaining fees or any liabilities arising from your use of Services).
    2. By BITS: We may, at our discretion, suspend or terminate your access to the Services (in whole or in part) or close your account, at any time, without liability, for any reason including without limitation: (a) if we suspect you have violated these Terms or any applicable law; (b) if we detect suspicious activity in your account; (c) if required by a court order, law enforcement, or regulatory request; (d) if your use of Services is no longer feasible or commercially viable (for instance, if you reside in a jurisdiction where we decide to discontinue service); (e) for prolonged inactivity of your account; or (f) if a compliance provider (such as the Core Foundation) suspends or terminates your verification status. Where reasonably possible and lawful, we will use reasonable efforts to provide you notice of any such termination or suspension (e.g., via email or through the Platform).
    3. Effect of Termination: Upon termination of this Agreement for any reason:
       • All rights granted to you under these Terms will immediately cease.
       • You must immediately stop using the Services, and any license granted to you to use our intellectual property (Section 8.2) will end.
       • We will cancel any open transactions or orders to the extent possible.
       • If feasible, we will return any of your remaining Digital Assets, less any fees or amounts owed to BITS, by enabling you to withdraw to an external address.
       • If your account is terminated due to illegal activity or pursuant to a legal order, we may be required to hold your assets or transfer them to an authority.
       • Any sections of this Agreement which by their nature should survive termination (such as Indemnification, Limitation of Liability, Dispute Resolution, and others) shall continue in effect.

       Termination of the Agreement or suspension of services shall not prejudice any rights or obligations that arose prior to the date of termination, including any payment obligations or any liability for breach of the Agreement.

    4. Dormant Accounts: In the event of any account that remains inactive (no logins or transactions) for an extended period (e.g., 1 year or more) and has assets, BITS may attempt to contact you regarding your intentions. If required by law (for example, under unclaimed property laws), we may be obligated to report and/or remit any assets in a dormant account to the appropriate authorities after a specified time. We reserve the right to deduct a dormancy fee or maintenance fees from such dormant accounts, where permitted by law and after giving any required notices.

17. Miscellaneous

    1. Entire Agreement: These Terms, along with any documents incorporated by reference (such as our Privacy Policy and any platform specific agreements or disclosures), constitute the entire agreement between you and BITS regarding the Services, and supersede all prior and contemporaneous understandings, agreements, representations, and warranties, both written and oral, regarding the Services. No oral or written information or advice given by BITS or its representatives shall create any additional obligations or warranty on behalf of BITS not included in this Agreement.
    2. No Waiver: Our failure or delay in exercising any right, power, or privilege under these Terms shall not operate as a waiver thereof, nor shall any single or partial exercise of any right, power, or privilege preclude any other or further exercise of the same or any other right, power, or privilege. Any waiver must be in writing and signed by an authorized representative of BITS to be effective. No waiver by BITS of any breach of these Terms will be a waiver of any subsequent breach.
    3. Severability: If any provision of these Terms is held to be invalid, illegal, or unenforceable by a court or arbitrator of competent jurisdiction, that provision shall be enforced to the maximum extent permissible, and the remaining provisions of these Terms shall remain in full force and effect. The invalid or unenforceable provision shall be deemed modified to the narrowest extent required to make it valid and enforceable, if possible.
    4. Assignment: You may not assign or transfer any of your rights or obligations under these Terms without our prior written consent. Any attempted assignment in violation of this clause shall be null and void. BITS may freely assign or transfer this Agreement in whole or in part to any of its affiliates or in connection with a merger, acquisition, corporate reorganization, or sale of all or substantially all of its assets, or by operation of law, without your consent and without notice to you. These Terms shall bind and inure to the benefit of the parties, their successors, and permitted assigns. In the context of a transition of BITS to a decentralized governance structure (such as a DAO), references in these Terms to BITS or the Company shall be deemed to include any successor entity or organization that operates the Platform.
    5. Relationship of the Parties: Both you and BITS are independent contractors, and nothing in these Terms is intended to create any partnership, joint venture, agency, employment, or fiduciary relationship between you and us. You have no authority of any kind to bind BITS in any respect whatsoever. We are not your agent, and you are not our agent.
    6. Third-Party Beneficiaries: These Terms are for the sole benefit of you and BITS and our respective successors and permitted assigns. Except as expressly provided in these Terms, nothing herein is intended to confer any rights or remedies on any third party, whether as a third-party beneficiary or otherwise. Notwithstanding the foregoing, our affiliates, and our and their officers, directors, agents, joint venturers, employees, and representatives are intended third-party beneficiaries of the Limitation of Liability and Indemnification provisions (Sections 11 and 12).
    7. Force Majeure: BITS shall not be liable for any delays, failure in performance, or interruption of service resulting from acts beyond our reasonable control. This includes, but is not limited to: acts of God, acts of government or regulatory authorities (including the passage of laws or regulations or government orders affecting the Services), acts of terrorism, cyber-attacks or hacking incidents, war, civil unrest, strikes or other labor disputes, mechanical or electrical failures, hardware or software failures, Internet or blockchain network disruptions, power outages, fire, flood, earthquakes, pandemics, or other natural disasters. During such events, our obligations under these Terms will be suspended to the extent affected by the event. We will make reasonable efforts to resume service as soon as possible, but there may be cases where the force majeure event makes it impossible or impractical to continue operations (in which case we or you may have the right to terminate this Agreement as applicable under Section 16).
    8. Compliance with Laws: You and BITS shall each comply with all laws, regulations, and rules applicable to the performance of their respective obligations under these Terms. This includes compliance with tax laws, anti-money laundering laws, anti-bribery/anti-corruption laws (such as the U.S. Foreign Corrupt Practices Act), and export control and sanctions laws. You agree not to directly or indirectly export, re-export, or transfer any part of the Services or any related technical information or materials, to any country or individual to which such export is restricted by law.
    9. Language and Translations: These Terms are written in the English language, which shall be the controlling language in all respects. Any translation of these Terms into another language is provided for convenience only. In the event of any conflict or ambiguity between the English version and a translated version, the English version shall prevail.
    10. Notices:

        BITS may provide notices or communications to you via email to the address associated with your account, via posting on our website or Platform, via notification through the user interface, or through other electronic means. You are responsible for keeping your contact information (especially your email) up-to-date in your account profile. You will be deemed to have received any electronic notices when we send them or post them, whether or not you actually opened or read them. If we send a notice by email and it is returned as undeliverable, we may deem your account inactive.

        Notices to BITS should be sent via email to our support address and via certified mail or reputable courier to our registered business address. Our current contact information is in Section 18 below. Notices sent by mail are effective upon actual receipt by us.

    11. Headings and Interpretation: The section titles and headings in these Terms are for convenience only and have no legal or contractual effect. The words "include" or "including" mean "including without limitation." Unless the context requires otherwise, words in the singular include the plural and vice versa.
    12. No Strict Construction: These Terms shall not be construed against the party preparing them, but shall be construed as if all parties jointly prepared these Terms and any uncertainty or ambiguity shall not be interpreted against any one party.
    13. If you have any questions or concerns regarding the Services or these Terms, please contact us as described below in Section 18.

18. Contact Information

    • Business Address: BITS Blockchain Inc. 30 N Gould St Ste R Sheridan, WY 82801
    • Email: support@bitsblockchain.com
    • Website: www.bits.financial

    1. Consent to Electronic Communications: By using the Services, you agree that BITS may provide you with communications about your account or the Services electronically, such as by email or by posting notices on our website. It is your responsibility to ensure that we have a current email address for you, and to check for communications from us. You can withdraw your consent to receive electronic communications by contacting us, but if you do so, we reserve the right to close or limit your account as we may not be able to effectively provide Services to you.
    2. Compliance Provider Contact: For Self-Service Users utilizing Core Foundation compliance services:

       Core Foundation contact information and procedures will be provided during the onboarding process. Issues related to KYC/AML verification, account status, or compliance matters should be directed to the Core Foundation in accordance with their procedures.

19. Comprehensive Risk Disclosures

    1. Important Risk Warning

       PLEASE READ THESE COMPREHENSIVE RISK DISCLOSURES CAREFULLY BEFORE USING THE BITS PLATFORM. BY PROCEEDING, YOU ACKNOWLEDGE THAT YOU UNDERSTAND AND ACCEPT ALL RISKS DESCRIBED BELOW. DIGITAL ASSET TRANSACTIONS ARE HIGHLY SPECULATIVE AND CARRY SIGNIFICANT RISK OF TOTAL LOSS.

       These comprehensive risk disclosures supplement the risk disclosures in Section 9 and provide detailed information about platform-specific risks, interface limitations, and user responsibilities.

    2. Enhanced Risk Categories
       1. Total Loss Risk. You may lose all of your deposited assets. Digital asset staking carries the risk of total loss due to (i) smart contract vulnerabilities or exploits that permanently lock or steal funds; (ii) catastrophic failure of staking strategies; (iii) default, fraud, or insolvency by staking providers or custodians; (iv) extreme market conditions, regulatory seizures, or black swan events; (v) irreversible blockchain transactions sent to incorrect addresses; or (vi) platform insolvency or cessation of operations. Only deposit assets you can afford to lose entirely.
       2. Volatility Risk. Bitcoin and wrapped Bitcoin assets are extremely volatile and may experience: (i) rapid price fluctuations; (ii) sudden market crashes with limited liquidity; (iii) regulatory events causing rapid price drops; (iv) network instability affecting the pegs of wrapped assets; or (v) macroeconomic pressures causing prolonged bear markets. Past performance does not predict future results and asset values may never recover.
       3. Smart Contract and Code Risk. The BITS platform operates using complex smart contracts, which may: (i) contain undiscovered bugs; (ii) be exploited by attackers; (iii) be immutable and not upgradeable after deployment; (iv) depend on external dependencies that may fail; or (v) behave unpredictably when interacting with other DeFi protocols. Smart contract technology remains experimental and presents inherent security risks.
       4. Regulatory and Compliance Risk. The regulatory environment for digital assets includes: (i) rapidly changing laws that could affect the status of tokens or platform operations; (ii) enforcement actions leading to service suspension; (iii) tax law changes; (iv) new compliance requirements or geographic restrictions; and (v) cross-border sanctions. Regulatory uncertainty presents ongoing risks to platform operations and user access.
       5. Liquidity and Redemption Risk. Your ability to access or redeem funds may be constrained as a result of (i) smart contract limitations; (ii) staking provider unbonding periods; (iii) network congestion; (iv) platform liquidity crunches; (v) emergency pause mechanisms; or (vi) market dislocations. Immediate liquidity is not guaranteed and may not be available when most needed.
       6. Counterparty and Staking Provider Risk. When assets are deployed to staking providers, risks include: (i) performance risk (validator slashing or penalties); (ii) insolvency or mismanagement; (iii) operational failures; (iv) fraudulent activity or misconduct; (v) technical infrastructure failures; or (vi) concentration risk. Diligence does not eliminate counterparty risk.
       7. Technology Infrastructure Risk. Platform operations depend on complex technology including: (i) blockchain network stability; (ii) the integrity of oracle price feeds; (iii) cross-chain bridge security for wrapped asset operations; (iv) API and interface reliability; (v) data center and cloud provider reliability; and (vi) the sufficiency of cybersecurity measures. No technology system is immune to failures, attacks, or exploitation.
       8. Token-Specific Risks.
          1. BITS Token Risks: Risks may arise from smart contract vulnerabilities, value calculation errors, transfer restrictions, changes in redemption mechanisms, and governance changes.
          2. wBITS (Wrapped BITS) Risks: Wrapping and unwrapping processes may fail, exchange rate mechanisms may break, additional contract complexity may pose risk, and integration with other DeFi protocols may introduce unforeseen problems.
          3. QBITS Protocol Token Risks: Delays or cancellation of token generation events may occur, entitlements may be calculated incorrectly, and governance or regulatory changes may affect value or distribution.
    3. Interface and Platform Disclaimers
       1. Technology Disclaimer. The BITS platform interface is provided "as is" without any warranty or guarantee regarding continuous availability, error-free operation, compatibility, or accuracy. Information displayed may be delayed, inaccurate, incomplete, or subject to manipulation.
       2. Information and Data Disclaimer. All information on the platform, including yield projections, historical performance, asset prices, and educational content, is provided for informational purposes only. Such information may not be up to date or accurate. Platform users should verify all critical information through independent sources before making decisions.
       3. Transaction Processing Disclaimer. All blockchain transactions are irreversible. This means: (i) transactions cannot be canceled or reversed once confirmed; (ii) incorrect destination addresses result in permanent loss; (iii) network fees are non-refundable; (iv) transaction data is permanently recorded on public blockchains; (v) transaction processing times may vary; and (vi) failed transactions may still incur fees.
       4. Third-Party Service Disclaimer. The platform integrates with external blockchain networks, wallet providers, data oracles, compliance and identity verification services, and cloud hosting vendors. BITS has no control over third-party service reliability, and disclaims responsibility for failures, security breaches, or policy changes.
    4. User Responsibility Framework
       1. Security Responsibilities. Users are solely responsible for maintaining the security of keys, using secure networks, keeping software updated, monitoring account activity, employing operational security for digital asset management, and backing up all critical information.
       2. Due Diligence Responsibilities. Users must independently research and understand all risks, verify platform information, assess risk tolerance, monitor market and platform developments, stay informed about regulatory changes, and consult legal, tax, and financial advisors.
       3. Compliance and Legal Responsibilities. Users are required to (i) comply with applicable law; (ii) provide truthful information; (iii) report taxable events; (iv) observe all required sanctions and anti-money laundering requirements; (v) notify BITS or relevant parties of any material changes; and (vi) respect intellectual property and platform terms.
       4. Risk Management Responsibilities. Users are responsible for diversifying holdings, monitoring exposure, planning for periods of platform unavailability, and maintaining emergency funds outside digital assets.
    5. Emergency Procedures and Support
       1. If you experience unauthorized account access, missing or incorrect transactions, technical issues, or a suspected security breach:
          1. Secure wallets or devices immediately;
          2. Contact support only through official channels;
          3. Document and preserve evidence;
          4. Do not respond to unsolicited communications;
          5. Check transaction status via blockchain explorers where possible.
       2. Support services cannot reverse confirmed blockchain transactions, recover assets sent to incorrect addresses, guarantee resolution of all issues, provide legal/tax/investment advice, or override platform security or compliance requirements for user convenience.
       3. Contact information for emergencies:
          1. Email: support@bitsblockchain.com
          2. Platform support: In-app support when available
       4. Only respond to official communications sent from verified BITS domains. BITS staff will never ask for private keys, seed phrases, or passwords.
    6. User Acknowledgment

       By continuing to use the BITS Platform, you acknowledge that you have read, understood, and agreed to all terms, risk disclosures, and disclaimers described in this document. This Agreement, including all incorporated risk disclosures, is a binding legal contract between you and BITS Blockchain Inc.