White paper drafted under the European Markets in Crypto-Assets Regulation (EU) 2023/1114 for FFG 2K9VS42WV

The crypto-asset Conflux (CFX) referred to in this white paper is a crypto-asset other than EMTs and ARTs and is issued on the Conflux network, according to the DTI FFG shown in Section F.14, as of 2026-01-26. As of March 2026, approximately 5.19 billion CFX tokens are in circulation. The crypto-asset has no maximum supply cap. Conflux’s tokenomics are inflationary – new CFX are continually minted through Proof of Work (PoW) block rewards and Proof of Stake (PoS) staking interest to incentivize miners and validators for securing the network. The current effective annual inflation rate is 2.40%. However, the issuance parameters are subject to adjustment through DAO governance voting.

The first activity on Conflux can be viewed on 2020-10-28 (block hash: 0x3d07cfd99113632862d3b88a6b81e2f23e5bf1c32cd665a78014c6a2ba3c0a70, accessed 2026-01-26).

Conflux (CFX) is the native crypto-asset of the Conflux Network, a high-performance public blockchain designed to deliver scalability, security, and low transaction costs. CFX serves as the fundamental unit of value transfer and economic incentive within the Conflux ecosystem. CFX is used to pay transaction fees, deploy and interact with smart contracts, and participate in governance mechanisms. The token also supports ecosystem growth by incentivizing validators, developers, and users. The project adheres to applicable compliance standards and follows best practices in transparency, security, and risk management.

The crypto-asset does not grant any legally enforceable or contractual rights or obligations to its holders or purchasers. Any functionalities accessible through the underlying technology are purely technical or operational in nature and do not confer rights comparable to ownership, profit participation, governance, or similar entitlements known from traditional financial instruments.

Not applicable.

Conflux Foundation is seeking admission to trading on Payward Global Solutions LTD ("Kraken") platform in the European Union in accordance with Article 5 of Regulation (EU) 2023/1114 of the European Parliament and of the Council of 31 May 2023 on Markets in Crypto-Assets, and amending Regulations (EU) No 1093/2010 and (EU) No 1095/2010 and Directives 2013/36/EU and (EU) 2019/1937. The admission to trading is not accompanied by a public offer of the crypto-asset.

The Conflux Foundation is a non-profit organization that supports the growth and development of the Conflux blockchain network, its ecosystem, and its community. Activities include ecosystem funding, grants, education, community development, and governance.

Conflux Foundation does not have a parent company. Accordingly, no business activity of a parent company is to be reported in this section.

The Conflux Foundation is a non-profit organization. Its funds are primarily used to support ecosystem development and the long-term sustainability of the network, including ecosystem incentives (such as grants and developer incentives), research and development and infrastructure maintenance, market and community growth, as well as legal, compliance, and general operational expenses.

The Foundation’s revenue currently comes mainly from ecosystem collaboration income, technical service-related income, and the management of its token reserves.

Its main cost structure includes R&D and engineering, infrastructure and operations, ecosystem grants and incentives, as well as legal, compliance, administrative, and marketing expenses.

In addition, the project has received external funding from strategic partners.

Not applicable. The foundation has been established for more than three years and its financial condition over the past three years is provided in Part A.16 above.

Conflux (CFX) is the native crypto-asset of the Conflux Network, a high-performance public blockchain designed to deliver scalability, security, and low transaction costs. CFX serves as the fundamental unit of value transfer and economic incentive within the Conflux ecosystem.

The project aims to provide a robust infrastructure for decentralized applications (dApps), digital asset issuance, and cross-border value exchange. By leveraging its Tree-Graph consensus mechanism, Conflux ensures high throughput without compromising security or decentralization.

CFX is used to pay transaction fees, deploy and interact with smart contracts, and participate in governance mechanisms. The token also supports ecosystem growth by incentivizing validators, developers, and users. The project adheres to applicable compliance standards and follows best practices in transparency, security, and risk management.

The project does not involve the granting of ownership, profit-participation rights, or legal claims against the project entity or its contributors. Instead, it centres on the creation of a technical environment in which the CFX crypto-asset may serve as a governance and functional input for certain protocol processes. The long-term evolution of the Conflux system, including the scope of available features, the decentralisation roadmap, validator-selection mechanisms, and the operational continuity of the infrastructure, may vary based on technical, economic, and regulatory considerations. All future developments remain subject to change.

As defined in Article 3(9) of Regulation (EU) 2023/1114 of the European Parliament and of the Council of 31 May 2023 on Markets in Crypto-Assets – amending Regulations (EU) No 1093/2010 and (EU) No 1095/2010 and Directives 2013/36/EU and (EU) 2019/1937 – a utility token is “a type of crypto-asset that is only intended to provide access to a good or a service supplied by its issuer”. This crypto-asset does not qualify as a utility token, as its intended use goes beyond providing access to a good or service supplied solely by the issuer.

This section provides an overview of the historical developments related to the CFX crypto-asset and a description of planned or anticipated project milestones as publicly communicated. All forward-looking elements are subject to significant uncertainty. They do not constitute commitments, assurances, or guarantees, and may be modified, delayed, or discontinued at any time. The implementation of past milestones cannot be assumed to continue in the future, and future changes may have adverse effects for token holders.

There is no formally published multi-year roadmap for the CFX crypto-asset.

Past milestones:

- No material past protocol or crypto-asset-related milestones with significant impact have been formally recorded or publicly communicated to date.

Future milestones:

- Continued Role as Core Network Asset (Timing not specified): The CFX crypto-asset is expected to continue functioning as the core asset of the Conflux network, including its use for transaction fee payments and participation in staking mechanisms.

- Expansion of Ecosystem Functionality (Timing not specified): Planned developments include an expansion of the crypto-asset’s role within ecosystem applications, such as payments, settlement processes, and tokenized real-world asset arrangements, subject to implementation decisions and regulatory considerations.

- Broader Integration with Regulated Service Providers (Timing not specified): The project has communicated intentions to expand integrations with regulated exchanges, custodians, and compliant wallet providers, which may influence accessibility and usage of the CFX crypto-asset.

- Maintenance of Non-Pegged Classification (ongoing): The crypto-asset is expected to remain unpegged to any fiat currency or reference asset and continue to be classified as an “Other Crypto-Asset,” reflecting its economic role within the protocol rather than any stabilisation mechanism.

Note: All future milestones are subject to significant uncertainty, including but not limited to technical feasibility, regulatory developments, market adoption, and community governance decisions. The project may modify, delay, or discontinue any of these initiatives at any time. Past implementation or performance outcomes do not constitute an indication of future results, and any such changes may materially affect the characteristics, availability, or perceived value of the CFX crypto-asset for its holders.

Resources are allocated as follows:

- Technology Development: continuous improvement of the core protocol, scaling solutions, and developer tools.

- Ecosystem Growth: establishment of ecosystem funds to support dApp, DeFi, GameFi, and RWA projects.

- Security and Compliance: investments in third-party audits, cybersecurity measures, and regulatory advisory.

- Operations and Marketing: global community development, educational programs, and brand promotion.

The project does not intend to raise new funds. The token is already in circulation and its historical funding was primarily allocated to technology development, ecosystem support, and community incentives.

The purpose of seeking admission to trading is to enable the crypto-asset to be listed on a regulated platform in accordance with the applicable provisions of Regulation (EU) 2023/1114 and Commission Implementing Regulation (EU) 2024/2984. The white paper has been drawn up to comply with the transparency requirements applicable to trading venues.

Holder restrictions are subject to the rules applicable to the crypto-asset service provider, as well as to any additional restrictions such provider may impose.

The token is intended to be listed on the trading platform operated by Payward Global Solutions LTD ("Kraken"). Access to this platform depends on regional availability and user eligibility under Kraken’s terms and conditions. Investors should consult Kraken’s official documentation to determine whether they meet the requirements for account creation and token trading.

The costs involved in accessing the trading platform depend on the specific fee structure and terms of the respective crypto-asset service provider. These may include trading fees, deposit or withdrawal charges, and network-related gas fees. Investors are advised to consult the applicable fee schedule of the chosen platform before engaging in trading activities.

Not applicable, as this white paper is written to seek admission to trading, not for the initial offer to the public.

MiCA-compliant Crypto Asset Service Providers shall have strong measurements in place in order to manage conflicts of interests. Due to the broad audience this white-paper is addressing, potential investors should always check the conflicts of Interest policy of their respective counterparty.

Not applicable, as this white paper is written to seek admission to trading, not for the initial offer to the public.

Not applicable, as this white paper is written to seek admission to trading, not for the initial offer to the public.

CFX is a decentralized digital asset that powers the Conflux blockchain. Its primary functionalities include:

(a) Transaction Fee Payment: CFX is used to pay for transaction fees and smart contract execution fees on the Conflux network. Every operation on Conflux (transfer, contract call, etc.) requires a small CFX fee, which helps prevent spam and rewards miners.

(b) Staking and Network Security: CFX can be staked (bonded) with network validators to secure the PoS consensus. By staking CFX, holders either run a validator node or delegate to a validator; this supports network security and in return yields staking rewards in CFX.

(c) Incentives Mechanism: CFX can be distributed to validators as interest or to miners as block rewards. By mining PoW blocks, miners will get rewards foreach mined block. The transaction priority fee and part of transaction base fee will be miners’ rewards.

CFX is already fully functional and integrated into the Conflux network’s operations. There are no new planned uses of CFX outside its current role, as its role is fundamental and ongoing. It will continue to be used as: the gas token for all transactions on Conflux; the staking asset for validators (and delegation by token holders) to keep the network secure; and the base asset for the ecosystem’s DeFi and commerce.

The crypto-asset referred to herein is a crypto-asset other than EMTs and ARTs, and is available on the Conflux network. The crypto-asset is fungible up to 18 digits after the decimal point. The crypto-asset constitutes a digital representation recorded on distributed-ledger technology and does not confer ownership, governance, profit participation, or any other legally enforceable rights. Any functionalities associated with the token are limited to potential technical features within the relevant platform environment. These functionalities do not represent contractual entitlements and may depend on future development decisions, technical design choices, and operational conditions. The crypto-asset does not embody intrinsic economic value; instead, its value, if any, is determined exclusively by market dynamics such as supply, demand, and liquidity in secondary markets.

No further services are currently planned.

The crypto-asset does not grant any legally enforceable or contractual rights or obligations to its holders or purchasers.

Any functionalities accessible through the underlying technology are of a purely technical or operational nature and do not constitute rights comparable to ownership, profit participation, governance, or similar entitlements known from traditional financial instruments.

Accordingly, holders do not acquire any claim capable of legal enforcement against the issuer or any third party.

As the crypto-asset does not establish any legally enforceable rights or obligations, there are no applicable procedures or conditions for their exercise.

Any interaction or functionality that may be available within the technical infrastructure of the project – such as participation mechanisms or protocol-level features – serves operational purposes only and does not create or constitute evidence of any contractual or statutory entitlement.

As the crypto-asset does not confer any legally enforceable rights or obligations, there are no conditions or mechanisms under which such rights could be modified.

Adjustments to the technical protocol, smart contract logic, or related systems may occur in the ordinary course of development or maintenance.

Such changes do not alter the legal position of holders, as no contractual or regulatory rights exist. Holders should not interpret technical updates or governance-related changes as amendments to legally binding entitlements.

Information on future offers to the public of crypto-assets was not available at the time of writing this white paper (2026-01-26).

The crypto-assets themselves are not subject to any technical or contractual transfer restrictions and are generally freely transferable. However, crypto-asset service providers may impose restrictions on buyers or sellers in accordance with applicable laws, internal policies or contractual terms agreed with their clients.

Conflux’s token supply is not fixed and adjusts through a combination of protocol-based issuance and token burning mechanisms. This structure is intended to balance incentives for network participants with the long-term sustainability of the network.

At network launch, 5 billion CFX were pre-minted. In addition, new CFX are issued automatically under the protocol through three mechanisms. First, Proof of Work mining rewards are distributed for each block produced. Second, storage collateral rewards are generated based on the annual increase in storage collateral. Third, Proof of Stake staking rewards are calculated by reference to the circulating supply, the amount of CFX staked, and the applicable interest rate. The relevant issuance parameters are determined by the Conflux DAO, which sets the base reward and the base interest rate.

As of March 13, 2026, the base reward was set at 0.8 CFX per block and the base interest rate at 3.26%. Using these parameters, and based on a circulating supply of 5,191,066,641 CFX and a total staked amount of 849,705,000 CFX, the annual issuance was estimated at 50,457,600 CFX from PoW mining rewards, 106,624 CFX from storage collateral rewards, and 72,139,955 CFX from PoS staking rewards. This corresponded to an effective annual inflation rate of approximately 2.40%, consisting primarily of PoW and PoS issuance.

At the same time, the protocol incorporates token burning mechanisms intended to offset part of this inflationary issuance. These include the burning of a portion of base gas fees under CIP-1559 and the burning of a portion of storage collateral in Core Space under CIP-107. According to the available figures, the cumulative amount burned on the Conflux network was 1,070,377 CFX, of which 1,042,252 CFX related to storage collateral and 28,123 CFX related to gas fee revenue.

In addition to these protocol-level burn mechanisms, the Conflux Foundation may also conduct discretionary token burns. All supply changes occur in accordance with pre-defined network rules and protocol parameters, rather than through arbitrary unilateral minting by a central entity. By combining controlled inflation with deflationary burning, Conflux maintains an adaptive monetary system that supports long-term economic sustainability and network security.

Applicable law likely depends on the location of any particular transaction with the token.

Competent court likely depends on the location of any particular transaction with the token.

The crypto-asset in scope is implemented on the Conflux network following the standards described below.

The crypto-asset in scope is implemented on the Conflux network following the standards described below.

The following applies to Conflux:

The Conflux Network is based on its Tree-Graph consensus protocol, which combines elements of Proof-of-Work (PoW) and Proof of Stake (PoS). The network supports the Ethereum Virtual Machine (EVM) standard, ensuring compatibility with widely adopted smart contract protocols.

The crypto-asset in scope is implemented on the Conflux network following the standards described below.

The following applies to Conflux:

- A hybrid PoW–PoS consensus mechanism, where PoW with a DAG-based Tree-Graph ledger provides high-throughput transaction processing and PoS provides finality and economic security.

- Smart contract functionality highly compatible with Solidity and EVM standards.

- Cross-chain interoperability modules supporting asset transfers and communication with other blockchains.

The crypto-asset in scope is implemented on the Conflux network following the standards described below.

The following applies to Conflux:

- Base Layer: Conflux uses PoW as its core consensus mechanism, secured by the Tree-Graph ledger structure and GHAST chain selection rule. This design allows multiple blocks to be processed in parallel, significantly increasing throughput and reducing confirmation latency, while maintaining decentralization and security assumptions comparable to Bitcoin.

- Finality Layer: To mitigate PoW’s probabilistic finality, Conflux integrates a Proof-of-Stake (PoS) finality mechanism. Validators stake CFX tokens and participate in a BFT-style protocol to finalize blocks, ensuring deterministic finality and reducing the risk of chain reorgs.

- Performance: Supports 15,000 TPS with low latency and energy efficiency compared to traditional PoW chains.

The crypto-asset in scope is implemented on the Conflux network following the standards described below.

The following applies to Conflux:

Incentives are provided through the issuance of CFX tokens to miners/validators for securing the network and processing transactions. Users of the network pay transaction fees (gas fees) in CFX, which are distributed among miners. Additional incentive programs may include developer grants and community reward schemes.

Conflux is a public blockchain that implements a Tree-Graph consensus structure, which allows blocks to reference multiple predecessors. This design aims to improve throughput and reduce confirmation latency compared to traditional linear blockchains. Conflux supports EVM compatibility, enabling interoperability with Ethereum-based smart contracts. The network has been used in various enterprise and research initiatives, including projects aligned with China’s blockchain infrastructure programs.

Conflux has undergone multiple security audits to ensure the robustness and reliability of its network. Prominent security firms such as Halborn, Least Authority, Peckshield have conducted audits on various components of the Conflux ecosystem, including the VM Module, Ledger State Interface and Execution State Manager. These audits have identified and addressed vulnerabilities, contributing to the ongoing security and stability of the platform. The Conflux community maintains a repository of these audit reports, reflecting a commitment to transparency and continuous improvement in security practices.

1. Regulatory and Compliance

Regulatory frameworks applicable to crypto-asset services in the European Union and in third countries are evolving. Supervisory authorities may introduce, interpret, or enforce rules that affect (i) the eligibility of this crypto-asset for admission to trading, (ii) the conditions under which a crypto-asset service provider may offer trading, custody, or transfer services for it, or (iii) the persons or jurisdictions to which such services may be provided. As a result, the crypto-asset service provider admitting this crypto-asset to trading may be required to suspend, restrict, or terminate trading or withdrawals for regulatory reasons, even if the crypto-asset itself continues to function on its underlying network.

2. Trading venue and connection risk

Trading in the crypto-asset depends on the uninterrupted operation of the trading platform admitting it and, where applicable, on its technical connections to external liquidity sources or venues. Interruptions such as system downtime, maintenance, faulty integrations, API changes, or failures at an external venue can temporarily prevent order placement, execution, deposits, or withdrawals, even when the underlying blockchain is functioning. In addition, trading platforms in emerging markets may operate under differing governance, compliance, and oversight standards, which can increase the risk of operational failures or disorderly market conditions.

3. Market formation and liquidity conditions

The price and tradability of the crypto-asset depend on actual trading activity on the venues to which the service provider is connected, whether centralized exchanges (CEXs) or decentralized exchanges (DEXs). Trading volumes may at times be low, order books thin, or liquidity concentrated on a single venue. In such conditions, buy or sell orders may not be executed in full or may be executed only at a less favorable price, resulting in slippage.

Volatility: The market price of the crypto-asset may fluctuate significantly over short periods, including for reasons that are not linked to changes in the underlying project or protocol. Periods of limited liquidity, shifts in overall market sentiment, or trading on only a small number of CEXs or DEXs can amplify these movements and lead to higher slippage when orders are executed. As a result, investors may be unable to sell the crypto-asset at or close to a previously observed price, even though no negative project-specific event has occurred.

4. Counterparty and service-provider dependence

The admission of the crypto-asset to trading may rely on several external parties, such as connected centralized or decentralized trading venues, liquidity providers, brokers, custodians, or technical integrators. If any of these counterparties fail to perform, suspend their services, or apply internal restrictions, the trading, deposit, or withdrawal of the crypto-asset on the admitting service provider can be interrupted or halted.

Quality of counterparties: Trading venues and service providers in certain jurisdictions may operate under regulatory or supervisory standards that are lower or differently enforced than those applicable in the European Union. In such environments, deficiencies in governance, risk management, or compliance may remain undetected, which increases the probability of abrupt service interruptions, investigations, or forced wind-downs.

Delisting and service suspension: The crypto-asset’s availability may depend on the internal listing decisions of these counterparties. A delisting or suspension on a key connected venue can materially reduce liquidity or make trading temporarily impossible on the admitting service provider, even if the underlying crypto-asset continues to function.

Insolvency of counterparties: If a counterparty involved in holding, routing, or settling the crypto-asset becomes insolvent, enters restructuring, or is otherwise subject to resolution-type measures, assets held or processed by that counterparty may be frozen, become temporarily unavailable, or be recoverable only in part or not at all, which can result in losses for clients whose positions were maintained through that counterparty. This risk applies in particular where client assets are held on an omnibus basis or where segregation is not fully recognized in the counterparty’s jurisdiction.

5. Operational and information risks

Due to the irrevocability of blockchain transactions, incorrect approvals or the use of wrong networks or addresses will typically make the transferred funds irrecoverable. Because trading may also rely on technical connections to other venues or service providers, downtime or faulty code in these connections can temporarily block trading, deposits, or withdrawals even when the underlying blockchain is functioning. In addition, different groups of market participants may have unequal access to technical, governance, or project-related information, which can lead to information asymmetry and place less informed investors at a disadvantage when making trading decisions.

6. Market access and liquidity concentration risk

If the crypto-asset is only available on a limited number of trading platforms or through a single market-making entity, this may result in reduced liquidity, greater price volatility, or periods of inaccessibility for retail holders.

1. Insolvency of the issuer

As with any commercial entity, the issuer may face insolvency risks. These may result from insufficient funding, low market interest, mismanagement, or external shocks (e.g. pandemics, wars). In such a case, ongoing development, support, and governance of the project may cease, potentially affecting the viability and tradability of the crypto-asset.

2. Legal and regulatory risks

The issuer operates in a dynamic and evolving regulatory environment. Failure to comply with applicable laws or regulations in relevant jurisdictions may result in enforcement actions, penalties, or restrictions on the project’s operations. These may negatively impact the crypto-asset’s availability, market acceptance, or legal status.

3. Operational risks

The issuer may fail to implement adequate internal controls, risk management, or governance processes. This can result in operational disruptions, financial losses, delays in updating the white paper, or reputational damage.

4. Governance and decision-making

The issuer’s management body is responsible for key strategic, operational, and disclosure decisions. Ineffective governance, delays in decision-making, or lack of resources may compromise the stability of the project and its compliance with MiCA requirements. High concentration of decision-making authority or changes in ownership/control can amplify these risks.

5. Reputational risks

The issuer’s reputation may be harmed by internal failures, external accusations, or association with illicit activity. Negative publicity can reduce trust in the issuer and impact the perceived legitimacy or value of the crypto-asset.

6. Counterparty dependence

The issuer may depend on third-party providers for certain core functions, such as technology development, marketing, legal advice, or infrastructure. If these partners discontinue their services, change ownership, or underperform, the issuer’s ability to operate the project or maintain investor communication may be impaired. This could disrupt project continuity or undermine market confidence, ultimately affecting the crypto-asset’s value.

1. Valuation risk

The crypto-asset does not represent a claim, nor is it backed by physical assets or legal entitlements. Its market value is driven solely by supply and demand dynamics and may fluctuate significantly. In the absence of fundamental value anchors, such assets can lose their entire market value within a very short time. Historical market behaviour has shown that some types of crypto-assets – such as meme coins or purely speculative tokens – have become worthless. Investors should be aware that this crypto-asset may lose all of its value.

2. Market volatility risk

Crypto-asset prices can fluctuate sharply due to changes in market sentiment, macroeconomic conditions, regulatory developments, or technology trends. Such volatility may result in rapid and significant losses. Holders should be prepared for the possibility of losing the full amount invested.

3. Liquidity and price-determination risk

Low trading volumes, fragmented trading across venues, or the absence of active market makers can restrict the ability to buy or sell the crypto-asset. In such situations, it is not guaranteed that an observable market price will exist at all times. Spreads may widen materially, and orders may only be executable under unfavourable conditions, which can make liquidation costly or temporarily impossible.

4. Asset security risk

Loss or theft of private keys, unauthorised access to wallets, or failures of custodial or exchange service providers can result in the irreversible loss of assets. Because blockchain transactions are final, recovery of funds after a compromise is generally impossible.

5. Fraud and scam risk

The pseudonymous and irreversible nature of blockchain transactions can attract fraudulent schemes. Typical forms include fake or unauthorised crypto-assets imitating established ones, phishing attempts, deceptive airdrops, or social-engineering attacks. Investors should exercise caution and verify the authenticity of counterparties and information sources.

6. Legal and regulatory reclassification risk

Legislative or regulatory changes in the European Union or in the Member State where the crypto-asset is admitted to trading may alter its legal classification, permitted uses, or tradability. In third countries, the crypto-asset may be treated as a financial instrument or security, which can restrict its offering, trading, or custody.

7. Absence of investor protection

The crypto-asset is not covered by investor-compensation or deposit-guarantee schemes. In the event of loss, fraud, or insolvency of a service provider, holders may have no access to recourse mechanisms typically available in regulated financial markets.

8. Counterparty risk

Reliance on third-party exchanges, custodians, or intermediaries exposes holders to operational failures, insolvency, or fraud of these parties. Investors should conduct due diligence on service providers, as their failure may lead to the partial or total loss of held assets.

9. Reputational risk

Negative publicity related to security incidents, misuse of blockchain technology, or associations with illicit activity can damage public confidence and reduce the crypto-asset’s market value.

10. Community and sentiment risk

Because the crypto-asset’s perceived relevance and expected future use depend largely on community engagement and the prevailing sentiment, a loss of public interest, negative coverage or reduced activity of key contributors can materially reduce market demand.

11. Macroeconomic and interest-rate risk

Fluctuations in interest rates, exchange rates, general market conditions, or overall market volatility can influence investor sentiment towards digital assets and affect the crypto-asset’s market value.

12. Taxation risk

Tax treatment varies across jurisdictions. Holders are individually responsible for complying with all applicable tax laws, including the reporting and payment of taxes arising from the acquisition, holding, or disposal of the crypto-asset.

13. Anti-money-laundering and counter-terrorist-financing risk

Wallet addresses or transactions connected to the crypto-asset may be linked to sanctioned or illicit activity. Regulatory responses to such findings may include transfer restrictions, report obligations, or the freezing of assets on certain venues.

14. Market-abuse risk

Due to limited oversight and transparency, crypto-assets may be vulnerable to market-abuse practices such as spoofing, pump-and-dump schemes, or insider trading. Such activities can distort prices and expose holders to sudden losses.

15. Legal ownership and jurisdictional risk

Depending on the applicable law, holders of the crypto-asset may not have enforceable ownership rights or effective legal remedies in cases of disputes, fraud, or service failure. In certain jurisdictions, access to exchanges or interfaces may be restricted by regulatory measures, even if on-chain transfer remains technically possible.

16. Concentration risk

A large proportion of the total supply may be held by a small number of holders. This can enable market manipulation, governance dominance, or sudden large-scale liquidations that adversely affect market stability, price levels, and investor confidence.

As this white paper relates to the admission to trading of the crypto-asset, the following risk description reflects general implementation risks on the crypto-asset service provider's side typically associated with crypto-asset projects. The party admitting the asset to trading is not involved in the project’s implementation and does not assume responsibility for its governance, funding, or execution.

Delays, failures, or changes in the implementation of the project as outlined in its public roadmap or technical documentation may negatively impact the perceived credibility or usability of the crypto-asset. This includes risks related to project governance, resource allocation, technical delivery, and team continuity.

Key-person risk: The project may rely on a limited number of individuals for development, maintenance, or strategic direction. The departure, incapacity, or misalignment of these individuals may delay or derail the implementation.

Timeline and milestone risk: Project milestones may not be met as announced. Delays in feature releases, protocol upgrades, or external integrations can undermine market confidence and affect the adoption, use, or value of the crypto-asset.

Delivery risk: Even if implemented on time, certain functionalities or integrations may not perform as intended or may be scaled back during execution, limiting the token’s practical utility.

As this white paper relates to the admission to trading of the crypto-asset, the following risks concern the underlying distributed ledger technology (DLT), its supporting infrastructure, and related technical dependencies. Failures or vulnerabilities in these systems may affect the availability, integrity, or transferability of the crypto-asset.

1. Blockchain dependency risk

The functionality of the crypto-asset depends on the continuous and stable operation of the blockchain(s) on which it is issued. Network congestion, outages, or protocol errors may temporarily or permanently disrupt on-chain transactions. Extended downtime or degradation in network performance can affect trading, settlement, or usability of the crypto-asset.

2. Smart contract vulnerability risk

The smart contract that defines the crypto-asset’s parameters or governs its transfers may contain coding errors or security vulnerabilities. Exploitation of such weaknesses can result in unintended token minting, permanent loss of funds, or disruption of token functionality. Even after external audits, undetected vulnerabilities may persist due to the immutable nature of deployed code.

3. Wallet and key-management risk

The custody of crypto-assets relies on secure private key management. Loss, theft, or compromise of private keys results in irreversible loss of access. Custodians, trading venues, or wallet providers may be targeted by cyberattacks. Compatibility issues between wallet software and changes to the blockchain protocol (e.g. network upgrades) can further limit user access or the ability to transfer the crypto-asset.

Outdated or vulnerable wallet software:

Users relying on outdated, unaudited, or unsupported wallet software may face compatibility issues, security vulnerabilities, or failures when interacting with the blockchain. Failure to update wallet software in line with protocol developments can result in transaction errors, loss of access, or exposure to known exploits.

4. Network security risks

Attack Risks: Blockchains may be subject to denial-of-service (DoS) attacks, 51% attacks, or other exploits targeting the consensus mechanism. These can delay transactions, compromise finality, or disrupt the accurate recording of transfers.

Centralization Concerns: Despite claims of decentralisation, a relatively small number of validators or a high concentration of stake may increase the risk of collusion, censorship, or coordinated network downtime, which can affect the resilience and operational reliability of the crypto-asset.

5. Bridge and interoperability risk

Where tokens can be bridged or wrapped across multiple blockchains, vulnerabilities in bridge protocols, validator sets, or locking mechanisms may result in loss, duplication, or misrepresentation of assets. Exploits or technical failures in these systems can instantly impact circulating supply, ownership claims, or token fungibility across chains.

6. Forking and protocol-upgrade risk

Network upgrades or disagreements among node operators or validators can result in blockchain “forks”, where the blockchain splits into two or more incompatible versions that continue separately from a shared past. This may lead to duplicate token representations or incompatibilities between exchanges and wallets. Until consensus stabilises, trading or transfers may be disrupted or misaligned. Such situations may be difficult for retail holders to navigate, particularly when trading platforms or wallets display inconsistent token information.

7. Economic-layer and abstraction risk

Mechanisms such as gas relayers, wrapped tokens, or synthetic representations may alter the transaction economics of the underlying token. Changes in transaction costs, token demand, or utility may reduce its usage and weaken both its economic function and perceived value within its ecosystem.

8. Spam and network-efficiency risk

High volumes of low-value (“dust”) or automated transactions may congest the network, slow validation times, inflate ledger size, and raise transaction costs. This can impair performance, reduce throughput, and expose address patterns to analysis, thereby reducing network efficiency and privacy.

9. Front-end and access-interface risk

If users rely on centralised web interfaces or hosted wallets to interact with the blockchain, service outages, malicious compromises, or domain expiries affecting these interfaces may block access to the crypto-asset, even while the blockchain itself remains fully functional. Dependence on single web portals introduces a critical point of failure outside the DLT layer.

10. Decentralisation claim risk

While the technical infrastructure may appear distributed, the actual governance or economic control of the project may lie with a small set of actors. This disconnect between marketing claims and structural reality can lead to regulatory scrutiny, reputational damage, or legal uncertainty – especially if the project is presented as ‘community-governed’ without substantiation.

None.

The crypto-asset in scope is implemented on the Conflux network following the standards described below.

The following applies to Conflux:

- Base Layer: Conflux uses PoW as its core consensus mechanism, secured by the Tree-Graph ledger structure and GHAST chain selection rule. This design allows multiple blocks to be processed in parallel, significantly increasing throughput and reducing confirmation latency, while maintaining decentralization and security assumptions comparable to Bitcoin. .

- Finality Layer: To mitigate PoW’s probabilistic finality, Conflux integrates a Proof-of-Stake (PoS) finality mechanism. Validators stake CFX tokens and participate in a BFT-style protocol to finalize blocks, ensuring deterministic finality and reducing the risk of chain reorgs.

- Performance: Supports 15,000 TPS with low latency and energy efficiency compared to traditional PoW chains.

The crypto-asset in scope is implemented on the Conflux network following the standards described below.

The following applies to Conflux:

Incentives are provided through the issuance of CFX tokens to miners/validators for securing the network and processing transactions. Users of the network pay transaction fees (gas fees) in CFX, which are distributed among miners. Additional incentive programs may include developer grants and community reward schemes.

The energy consumption associated with this crypto-asset is aggregated of multiple contributing components, primarily the underlying blockchain network and the execution of token-specific operations. To determine the energy consumption of a token, the energy consumption of the underlying blockchain network Conflux is calculated first. A proportionate share of that energy use is then attributed to the token based on its activity level within the network (e.g. transaction volume, contract execution).

The Functionally Fungible Group Digital Token Identifier (FFG DTI) is used to determine all technically equivalent implementations of the crypto-asset in scope.

Estimates regarding hardware types, node distribution, and the number of network participants are based on informed assumptions, supported by best-effort verification against available empirical data. Unless robust evidence suggests otherwise, participants are assumed to act in an economically rational manner. In line with the precautionary principle, conservative estimates are applied where uncertainty exists – that is, estimates tend towards the higher end of potential environmental impact.

To determine the proportion of renewable energy usage, the locations of the nodes are to be determined using public information sites, open-source crawlers and crawlers developed in-house. If no information is available on the geographic distribution of the nodes, reference networks are used which are comparable in terms of their incentivization structure and consensus mechanism. This geo-information is merged with public information from Our World in Data, see citation. The intensity is calculated as the marginal energy cost wrt. one more transaction. Ember (2025); Energy Institute - Statistical Review of World Energy (2024) - with major processing by Our World in Data. “Share of electricity generated by renewables - Ember and Energy Institute” [dataset]. Ember, “Yearly Electricity Data Europe”; Ember, “Yearly Electricity Data”; Energy Institute, “Statistical Review of World Energy” [original data]. Retrieved from https://ourworldindata.org/grapher/share-electricity-renewables.

To determine the GHG Emissions, the locations of the nodes are to be determined using public information sites, open-source crawlers and crawlers developed in-house. If no information is available on the geographic distribution of the nodes, reference networks are used which are comparable in terms of their incentivization structure and consensus mechanism. This geo-information is merged with public information from Our World in Data, see citation. The intensity is calculated as the marginal emission wrt. one more transaction. Ember (2025); Energy Institute - Statistical Review of World Energy (2024) - with major processing by Our World in Data. “Carbon intensity of electricity generation - Ember and Energy Institute” [dataset]. Ember, “Yearly Electricity Data Europe”; Ember, “Yearly Electricity Data”; Energy Institute, “Statistical Review of World Energy” [original data]. Retrieved from https://ourworldindata.org/grapher/carbon-intensity-electricity Licenced under CC BY 4.0.