Due Diligence Regulation

Entered into force on February 21, 2026.

On-chain voting result: association.dao.eth/transaction-hash

1. Introduction

1.1. This Regulation is intended for all persons authorized to act as Qualified Verifiers (hereinafter "Verifiers").

1.2. Verifiers are not merely technical signatories of multisignature processes. The signature of Verifiers constitutes a "collective legal attestation." A Verifier personally and collectively certifies that the Association acts lawfully.

1.3. The entire legal architecture of the Association, protecting its assets and representatives (including Verifiers) from legal risks, relies on the bona fide and documented verification performed by Verifiers.

1.4. Failure or negligent performance of these procedures constitutes gross negligence and may result in the Verifier losing the right to indemnity (legal and financial protection) from the Association.

2. Procedure Application

2.1. Qualified Confirmation: This procedure is mandatory each time a Verifier must provide "Qualified Confirmation" (multisignature 4/7) to approve an on-chain transaction.

2.1.1. This primarily concerns:

2.1.1.1. Activation of any "Executive Act."

2.1.1.2. Allocation of any funds from the Funds.

2.1.1.3. Payment of any Grant.

2.1.1.4. Payment for services to any external contractor.

3. Step-by-Step Verification Procedure

3.1. Obligation to Perform: Before signing, each Verifier must complete the following steps.

3.2. Step 1: Counterparty Identification:

3.2.1. Understand to whom the Association is sending funds.

3.2.1.1. Check threshold: According to the Anti-Money Laundering, Counter-Terrorism Financing, and International Sanctions Policy, KYC/KYB is mandatory for:

3.2.1.1.1. All Authorized Representatives (upon appointment).

3.2.1.1.2. All Grant Recipients if the amount exceeds USD 10,000 (or equivalent) within 12 months.

3.2.2. If the threshold is exceeded (KYC/KYB): Obtain the Compliance Check Report from the Data Protection Officer (hereinafter "DPO") and review Section 3.

3.2.3. If the threshold is NOT exceeded: Proceed to Step 2, verifying only the on-chain address and publicly available information.

3.3. Step 2: Mandatory Sanctions Screening:

3.3.1. This is the most important step. Sanctions violations carry the strictest liability.

3.3.2. Use the Compliance Check Report obtained from the DPO and review Section 4:

3.3.2.1. If a Match is found, then "REJECT" (see Step 4).

3.3.2.2. If no Match is found, proceed to Step 3.

3.4. Step 3: On-Chain Analysis:

3.4.1. Use the Compliance Check Report obtained from the DPO and review Section 5:

3.4.1.1. If a "Red Flag" is detected:

3.4.1.1.1. This automatically initiates an Enhanced Due Diligence procedure.

3.4.1.1.2. You are required to request a comprehensive explanation of the source of these funds from the counterparty.

3.4.1.1.3. If the explanation is unsatisfactory, then "REJECT" (see Step 4).

3.4.1.2. If no "Red Flag" is detected:

3.4.1.2.1. Proceed to Step 4.

3.5. Step 4: Decision Making:

3.5.1. The Verifier bears fiduciary responsibility.

3.5.1.1. "APPROVE":

3.5.1.1.1. The Verifier signs the multisignature only if all checks (Steps 1-3) are passed without any violations detected.

3.5.1.2. "REJECT":

3.5.1.2.1. If a sanctions list match (Step 2) or unresolved "Red Flag" (Step 3) is detected, then the following actions must be taken:

1) DO NOT SIGN the transaction.
2) IMMEDIATELY BLOCK execution of the transaction.
3) NOTIFY all other Verifiers and the DPO of the cause for rejection.
4) PREPARE a Suspicious Activity Report (SAR) and submit it to the DPO for possible filing with the regulator (MROS in Switzerland).

4. Liability and Protection

4.1. Protection: The Verifier's role is an active defense of the Association, not passive approval. Compliance with this Regulation ensures the Association’s legal security and preserves the Verifier’s right to personal legal protection. The Verifier must act in good faith and with due diligence.

4.2. Mandatory Condition for Protection: Compliance with this Regulation is a mandatory condition for the Verifier to receive legal protection and indemnification from the Legal Support Fund (hereinafter "LSF").

4.3. Exclusion for "Gross Negligence": Any significant or repeated failure by the Verifier to follow the procedures outlined in this Regulation (including but not limited to refusal to verify, falsification of reports, or signing when obvious "Red Flags" are present) shall be deemed gross negligence.

4.4. Consequences: Gross negligence, as determined by internal arbitration, automatically revokes the Verifier’s right to protection and indemnification from the LSF and may entail personal liability to the Association and/or third parties.

5. Effective Date and Amendments

5.1. Effective Date: This Regulation enters into force simultaneously with the date and time of entry into force of the Governance Resolution.

5.2. Amendments: Any amendments to this Regulation may only be made via Voting with Qualified Confirmation performed in accordance with provisions established in the Governance Resolution.