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Policy

Bitcoin Treasury Policy

Treasury Reserve Policy - August 2025

Contents

  • Scope
  • Personnel and responsibilities
  • Threshold for working capital
  • Transactions requiring Board approval
  • Transaction approval and execution
  • Permitted service providers
  • Prohibited activity
  • Conflicts of interest
  • Security procedures
  • Accounting, recordkeeping, training and enforcement

I. Scope

This policy applies to any BTC held by the Company, excluding BTC held or utilised principally for research and development, product or service offerings, or other similar purposes.

II. Personnel and Responsibilities

Designated Officers

Designated Officers of Sterling Digital Assets are responsible for:

  • Overseeing the execution of Reserve Management activities and enforcing this Policy.
  • Evaluating and approving decisions relating to Reserve Management, such as determining amounts, timing, and pricing of BTC acquisitions and disposals.
  • Regular consultation with the Board and providing updates to the Board and management regarding Reserve Management activities and implementation of this Policy.

Authorised Employees

Authorised Employees are accountable for:

  • Reviewing and understanding this Policy.
  • Performing Reserve Management duties as delegated by Designated Officers.
  • Assisting in the detection and prevention of fraudulent or illegal conduct related to Reserve Management.
  • Completing required training pertaining to this Policy.
  • Supporting ongoing compliance with this Policy.

III. Threshold for Working Capital

GBP 250,000

Only Cash Assets exceeding the Working Capital Threshold qualify as Treasury Reserve Assets. This threshold serves solely for calculating Treasury Reserve Assets available for investment in BTC and does not impact other Company policies unless expressly indicated. Adjustments to the Working Capital Threshold require Board approval.

IV. Transactions Requiring Board Approval

  • Acquisition of BTC.
  • Disposal of BTC beneficially owned by the Company.
  • Transfer of BTC between Permitted Custodians.
  • Lending, pledging, staking, or encumbering BTC beneficially owned by the Company.
  • Purchase or sale of options, warrants, convertible securities, BTC appreciation rights, or similar financial instruments tied to BTC value.

Pre-authorised transactions

Designated Officers are authorised to:

  • Acquire up to GBP 250,000.00 in BTC per fiscal quarter.
  • Transfer up to GBP 250,000.00 in BTC between Permitted Custodians per fiscal quarter.

V. Transaction Approval

Pre-transaction legal, tax, and accounting considerations

Prior to approval of any transaction or series of related transactions, the Designated Officers will:

  • Obtain the material information and recommendations reasonably necessary for their decision.
  • Determine a reasonable price and amount for the proposed transaction, using market quotations or other appropriate valuation methodologies.
  • Evaluate any material tax and accounting aspects of the transaction.
  • Consider any material legal and regulatory aspects of the transaction.
  • Confirm that the transaction will not cause the Company to fail to maintain the Working Capital Threshold.
  • Confirm that the transaction has been approved by the Board or does not require Board approval.

Required elements of transaction approval

Authorised Employees will use a Transaction Approval Form in a written communication to the Designated Officers to request approval for each transaction. The Designated Officers will review and approve each transaction with respect to the amount, timing, and pricing of the transaction and the Permitted Service Provider or Permitted OTC Counterparty.

VI. Transaction Execution

General requirements

Designated Officers or Authorised Employees may execute a transaction on behalf of the Company if:

  • The Designated Officers have obtained Board approval, if required, and approved the transaction.
  • The transaction will be executed using a Permitted Service Provider or with a Permitted OTC Counterparty.
  • The transaction will be executed for the Company's own account and Reserve Management purposes.
  • In an acquisition or transfer transaction, the BTC will be custodied with a Permitted Custodian.

Executing acquisition transactions

  • The Company will complete each BTC acquisition by taking delivery of the counterparty's BTC.
  • The Company will accept delivery of BTC via the Company's account at a Permitted Service Provider.
  • The Company will take delivery of acquired BTC as soon as reasonably practicable.
  • Payment will be submitted via wire transfer in accordance with Company policies.

Executing disposal transactions

Disposals of BTC will be subject to the same procedures and requirements as acquisitions. Payment may be received in legal tender or other forms approved by the Designated Officers and, if non-cash, the Board.

VII. Permitted Service Providers and Permitted OTC Counterparties

Contractual agreements

All contractual agreements with Permitted Service Providers or Permitted OTC Counterparties must be approved in writing by the Board and the Designated Officers. All material amendments require Board approval.

Ongoing monitoring

The Designated Officers will monitor and evaluate Permitted Service Providers and OTC Counterparties on a periodic basis. The Board will be notified if performance is considered deficient.

Custody procedures

The Company will engage Permitted Custodians to hold BTC on its behalf. Unless otherwise specified by the Board, the Company will custody all BTC held as Treasury Reserve Assets with Permitted Custodians.

VIII. Prohibited Activity

Neither the Company, nor any Designated Officer or Authorised Employee acting on behalf of the Company, will engage in any of the following transactions or activities:

  • Transmitting BTC on behalf of others.
  • Storing, holding, or maintaining custody or control of BTC on behalf of others.
  • Buying and selling BTC as a customer business.
  • Performing BTC exchange services as a customer business.
  • Lending, mining, or issuing BTC.
  • Front running or other activities intended to deceive or mislead market participants.
  • Manipulating the price, value, or trading volume of BTC.
  • Aiding, abetting, enabling, financing, supporting, or endorsing any of the foregoing.

Authorised Employees must immediately report the occurrence or suspected occurrence of any Prohibited Activity to the Designated Officers.

IX. Conflicts of Interest

Sterling Digital Assets's Code of Conduct requires that any transaction, relationship, or other circumstance that constitutes a conflict of interest be disclosed appropriately.

Examples of conflicts of interest include:

  • Requesting or receiving a preferential rate for personal transactions from a Permitted Service Provider.
  • Favoring a Permitted OTC Counterparty that has given preferential terms in a personal transaction.
  • Utilizing confidential information regarding Company transactions in BTC for personal gain.

X. Security Procedures

To protect shareholder value and comply with best practices observed by leading corporate Bitcoin treasuries, Sterling Digital Assets shall maintain its treasury bitcoin exclusively with one or more Permitted Institutional Custodians that provide regulatory oversight, insurance coverage, and institutional-grade custody infrastructure.

Multi-signature wallet security

Treasury Bitcoin shall be secured using a multi-signature wallet, with a minimum requirement of two out of three signatures to authorize any transaction. Signing authority shall be distributed between two Designated Officers and one independent board-appointed representative, ensuring separation of duties, dual control, and independent oversight.

Private key management

Private keys shall be generated and held within Hardware Security Modules or certified cold storage devices under strict access controls. Keys must never be stored on internet-connected devices. Backup copies shall be maintained in encrypted form at bank vaults or specialized custody providers, subject to dual control procedures, sealed, logged, and periodic integrity checks.

Transaction governance

  • Routine operational transfers may be executed under limited pre-authorization thresholds.
  • Material transactions require prior approval of the Board.
  • All transactions are recorded in Sterling's Treasury Ledger.
  • Regular reconciliation is performed against blockchain records.
  • Transactions are subject to periodic independent audit.

Security incident response

In the event of a suspected security incident, including potential key compromise or custodian breach, all transactions will be immediately suspended and the matter escalated to the Board for emergency response. An incident response plan covers wallet migration, key revocation, forensic review, and regulatory notification.

XI. Accounting and Recordkeeping

The Company will account for BTC on its books and records in accordance with the Company's accounting policies and procedures.

The Company will retain records of:

  • Any BTC that it holds or disposes of, including the date, transaction details, price, and other required information.
  • All transactions, including acquisitions, transfers, disposals, or events associated with BTC, for at least six years from the date of any such transaction or as required by applicable law.

XII. Training and Enforcement

The Designated Officers are responsible for determining the appropriate method and level of training for Authorised Employees who have a role or responsibility relating to the Company's Reserve Management.

For violations of this Policy, the Designated Officers will consult with the Company's Human Resources and Legal departments and take action in accordance with the Company's Employee Handbook or other applicable internal Company policies.

XIII. Interpretations and Determinations

The Designated Officers have the authority and discretion to interpret this Policy and apply this Policy to Reserve Management and all other matters addressed in this Policy.

XIV. Amendments

The Board has the authority and discretion to amend this Policy, unless such authority is explicitly delegated to the Designated Officers or the Board herein. The Designated Officers are responsible for ensuring that all relevant Sterling Digital Assets personnel are made aware of material changes to this Policy.

Approved by the Board of Directors of Sterling Digital Assets Plc.

Appendices

This policy includes the following appendices, available to authorized personnel:

  • Appendix A: Authorised Employees, Permitted Brokers, Permitted Custodians, and Permitted OTC Counterparties.
  • Appendix B: Transaction Approval Form.
  • Appendix C: Additional Procedures and Protocols for Transaction Execution.
  • Appendix D: Criteria for Evaluating Brokers, Custodians, and OTC Counterparties.