AXUSD Stablecoin Whitepaper

AX COIN BAHRAIN B.S.C

STABLECOIN WHITEPAPER

AXUSD (USD-Pegged)

Table of Contents

1. Executive Summary
2. Information about the Licensee
3. Information about the Stablecoin
4. Information about the Offer to Public
5. Information on the Rights and Obligations Attached to the Stablecoin
6. Information on the Underlying Technology
7. Information on the Risks
8. Information on the Reserve Assets
9. Glossary of Defined Terms and Abbreviations
10. Applicable Law and Competent Courts
11. Declaration of the Persons Responsible

1. Executive Summary

AX Coin (Bahrain) B.S.C ("AX Coin", "the Company", or "the Issuer") has received its final approval from the CBB to be licensed as a Stablecoin Issuer under the CBB SIO Module on 1st June 2026.

The Company issues fiat-referenced stablecoin:

• AXUSD, pegged 1:1 to the United States Dollar (USD)

Each token is fully backed by high-quality reserve assets at all times, redeemable at par value by any holder, and subject to monthly independent external audit.

AX Coin (Bahrain) B.S.C is a subsidiary of AX Coin HK Limited, which is in turn a subsidiary of Solowin Holdings (Nasdaq: AXG). The Company will be incorporated as a Bahraini Closed Joint Stock Company in accordance with the SIO Module.

AX Coin primarily serves institutional and corporate clients, providing a regulated, fully backed stablecoin for cross-border payments, treasury operations, and settlement.

GENERAL WARNING

This whitepaper has been prepared in accordance with the requirements of the Central Bank of Bahrain (CBB) module SIO. The company has received its final approval from the CBB under the stablecoin issuance and offering framework.

The Central Bank of Bahrain assumes no responsibility for the accuracy and completeness of the information contained in this document and expressly disclaims any liability whatsoever for any loss howsoever arising from reliance upon the whole or any part of the contents of this document.

2. Information about the Licensee

Board of Directors

(1) Zhu Haokang

• Citizenship: Hong Kong
• Past experience: Head of Digital Assets and Head of Family Office Business at China Asset Management (Hong Kong); Executive Director at Goldman Sachs
• Field of expertise: Fintech
• Educational qualification: Doctorate in FinTech, The Hong Kong Polytechnic University
• Position: Group Chief Executive
• Other directorships: Firewood Group Limited
• Adverse findings: No

(2) Ling Ngai Lok Mr. Lok has served as Solowin’s Chief Executive Officer since March 2025 and the Chairman of the Board of Solowin since November 2022. He previously served as Solowin’s director from July 2021 to June 2022 and Solomon JFZ’s director since January 2019. He has been the fund director of Solomon Capital Fund SPC since March 2019, overseeing the operation of the SPC Fund and reviewing and evaluating the performance of the fund.

Field of expertise: 20+ years of experience in broker dealers, investment banking and digital assets. Adverse Findings: No

(3) George Xavier Mascot

A global executive leader in digital finance with over 25 years of experience, specializing in driving the strategy, commercialization, and international growth of stablecoin businesses and digital asset platforms. Field of expertise: Payments, Banking, Digital Assets Adverse Findings: No

(4) Yousif Al Nefaiei

Over 27 years of leadership and management experience in the banking, financing, and Fintech industries. Field of expertise: Banking, Fintech Adverse findings: No

(5) Dr William W.Y. Lo

Over 30 years of executive leadership and strategic management experience in the telecommunications, finance, and technology industries. Field of expertise: Banking, Fintech Adverse findings: No

Governance Arrangements

The Board of Directors oversees strategic direction, reserve asset policy, and stablecoin issuance parameters. Executive management implements policies across operations, compliance, and treasury functions, with clear segregation of duties.

Key governance elements:

• Board approval required for all material decisions affecting reserve composition and issuance limits
• Segregation of duties across operations, compliance, and treasury functions
• Independent internal audit function reporting directly to the Board (SIO-5.5)
• Nomination committee and AML risk committee
• Policy review on a bi-annual basis and whenever material regulatory changes occur
• All policies aligned with CBB SIO Module, Volume 6

External Auditor

• Grant Thornton Abdulaal

PO BOX 11175

12th Floor, AlNakheel Tower

Seef District

Kingdom of Bahrain

Grant Thornton Abdulaal is a CBB-registered audit firm and a leading professional services firm in Bahrain with significant experience auditing financial-sector and licensed entities. The appointment of Grant Thornton Abdulaal as the Company's external auditor has been approved by the CBB pursuant to SIO-3.1.1 Condition 6.

3. Information about the Stablecoin

Token Name

The Company issues one stablecoin:

AXUSD is initially issued on Ethereum. The Company may extend to additional blockchain networks in the future and will adhere to relevant local laws and regulations.

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Characteristics

AXUSD is a fiat-referenced digital token designed to maintain stable value relative to its reference currency. Each token is:

• Fully backed: 100% of tokens in circulation are backed by reserve assets at all times (SIO-6.1)
• Redeemable at par: Every holder has a direct legal right to redeem tokens for the pegged fiat currency at par value (SIO-6.5.1)
• Freely transferable: Tokens can be transferred on-chain to any compatible wallet address
• Audited: Reserve adequacy confirmed by independent external audit on a monthly basis (SIO-6.2.1)

Primary Use Cases

Cross-border payments and settlement. AXUSD provides a faster, lower-cost alternative to traditional wire transfers for institutional cross-border payments, particularly across GCC and Asia corridors.

Treasury operations. Corporate treasuries can hold AXUSD as a stable store of value.

On/off ramp for digital asset markets. CBB-licensed digital asset exchanges and service providers in Bahrain can use AXUSD as a native fiat on/off ramp, simplifying their fiat operations.

Settlement layer. AXUSD can serve as the settlement currency for tokenized assets and other digital transactions requiring stable-value settlement.

Third-Party Entities

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4. Information about the Offer to Public

Issuance

AX Coin (Bahrain) B.S.C is the sole party authorized to issue AXUSD into circulation (by minting) or remove AXUSD from circulation (by burning). No other entity may create or destroy AXUSD tokens.

Transparency

The Company will publicly disclose:

• Total number of AXUSD tokens in circulation
• Total value and composition of reserve assets
• Monthly independent external audit report confirming 100% reserve backing (SIO-6.2.1)

All disclosures will be published on the Company's website.

Bank Account Structure

The Company maintains three categories of bank accounts, fully segregated:

Banking Partners and Stablecoin Distribution: Below is a list of banking partners, stablecoin distributors, conversion service providers and Fintech Partners where we have signed agreements, MOUs or plan to work with upon GO LIVE: (i) National Bank of Bahrain

(ii) Bank of Bahrain and Kuwait

(iii) Singapore Gulf Bank

(iv) The Benefit Company

(v) Yellow Card (vi) Infinios (vii) Bahrain Fintech Bay Subscription (Minting)

Customers may subscribe for AXUSD through the Company's platform:

1. Customer submits a subscription request through the Company's portal, specifying currency, quantity, and receiving wallet address
2. The Company performs KYC/KYB verification and AML screening
3. Customer transfers fiat currency from their own bank account to the Company's designated settlement account (same-name transfers only; third-party transfers are not accepted)
4. The Company verifies receipt of funds, confirms the amount matches the subscription request, and performs compliance checks
5. Upon approval, the Company mints the corresponding token amount and transfers it to the customer's registered wallet address
6. AML screening (Elliptic) and Travel Rule compliance (Sumsub) are applied to the outbound transfer
7. Fiat is moved from the Settlement Account to the Reserve Account (within 5 business days per SIO-6.4.5). Fees are moved to the Operating Account.

Minimum subscription amount: USD 10,000 per subscription request (BHD equivalent at the prevailing rate).

Redemption (Burning)

Customers may redeem AXUSD for fiat currency:

1. Customer submits a redemption request through the Company's portal, specifying currency, quantity, and bank account details
2. The Company performs compliance screening
3. Customer transfers tokens to the Company's designated wallet address
4. Inbound tokens are screened for AML compliance (Elliptic KYT) and Travel Rule compliance
5. The Company verifies the received amount matches the redemption request
6. Tokens are burned (destroyed)
7. The Company transfers the equivalent fiat amount (minus applicable fees) to the customer's verified bank account

Redemption timeline: The Company will process all legitimate redemption requests at par value and complete fund transfers within 1 to 5 business days of receiving the tokens (SIO-6.5.2). The redemption clock starts when the Company receives the tokens at its designated wallet address and ends when the Company initiates the fiat transfer. Banking settlement time after initiation is not included.

Minimum redemption amount: USD 10,000 per redemption request (BHD equivalent at the prevailing rate).

Fees

The Company applies a 0.00% subscription fee and a 0.00% redemption fee on the gross transaction amount. Pass-Through Charges (such as bank charges, correspondent bank charges, FX spreads, and blockchain network fees) are recovered from the Customer at cost and without markup. All fees, applicable minimum amounts, and any known Pass-Through Charges are disclosed to the Customer before a subscription or redemption request is confirmed. The full Fee Schedule, which the Company reviews periodically, is published on the Company's website and forms part of the Customer documentation framework. Fees will not be set at a level that deters customers from exercising their right to redemption (SIO-6.5.4).

Incident Response, Business Continuity, and Business Exit

Incident Response. The Company maintains real-time monitoring of reserve assets, token circulation, and liquidity. If the value of reserve assets falls below the face value of circulating tokens, the Company will immediately analyze the cause and replenish reserves from its own assets within 1 business day (SIO-6.3).

Business Continuity. In the event of system failures, market disruptions, or other emergencies, the Company will initiate its business continuity plan to ensure uninterrupted operations and prompt service restoration. The Company maintains redundant infrastructure with defined Recovery Point Objective (RPO) and Recovery Time Objective (RTO) targets.

Business Exit. If regulatory changes, financial instability, operational challenges, or voluntary exit require the Company to discontinue stablecoin issuance, the Company will:

1. Notify all token holders via email, website, and portal announcements
2. Outline the redemption timeline and procedures
3. Facilitate orderly redemption at par value within 1 month of notification
4. All holders, including those not yet onboarded, will have the opportunity to complete KYC and redeem their tokens during this period

5. Information on the Rights and Obligations Attached to the Stablecoin

Rights of Holders

Redemption Right. Holders of AXUSD have a permanent, direct legal right to redeem their tokens for the pegged fiat currency at par value at any time (SIO-6.5.1). Redemption is subject to the Terms and Conditions, applicable KYC/AML requirements, and reasonable fees. Redemption requests will be processed within 1 to 5 business days.

Ownership. Token holders have the right to transfer, trade, or hold their tokens, provided such actions comply with applicable law and the Terms and Conditions.

Claim on Reserve Assets. Each holder has a proprietary right to claim against the reserve assets for the purpose of redeeming outstanding tokens on a pro rata basis. In the event of insufficient reserves, holders have the right to make a personal claim against the Company up to the par value of their tokens, provided they have satisfied all reasonable conditions.

Access to Information. Holders have the right to access information about the stablecoin, including the fee schedule, reserve audit reports, and other relevant details published on the Company's website.

Business Exit Rights. In the event the Company discontinues operations, holders have the right to be notified through all available channels and to redeem their tokens at par value within 1 month of notification.

Complaint Handling

Holders and customers may submit complaints through the following channels:

• Email: [complaints email] • Mailing address: AX Coin (Bahrain) B.S.C, Arcapita Building, Bahrain Fintech Bay, 3rd Floor, P.O. Box 11299, Manama, Kingdom of Bahrain • Telephone: [company phone]

The Company will acknowledge all written complaints in writing within 5 working days of receipt (SIO-5.7.6). The Company will provide a substantive response within 4 weeks. If the Company is unable to respond within 4 weeks, it will provide an explanation and an indicative date by which a response will be issued (SIO-5.7.7).

If the complainant is not satisfied with the response, they have the right to escalate the complaint to the Central Bank of Bahrain Consumer Protection Unit (CPU) within 30 calendar days of receiving the Company’s response (SIO-5.7.11):

• CBB Consumer Protection Unit • Mailing address: Central Bank of Bahrain, King Faisal Highway, Diplomatic Area, P.O. Box 27, Manama, Kingdom of Bahrain • Website: www.cbb.gov.bh • Telephone: 17547789

The Company submits quarterly complaint reports to the CBB Consumer Protection Unit, including when no complaints have been received (SIO-5.7.12, SIO-5.7.13).

Full complaint handling procedures, including investigation, decision-making, redress, and record-keeping requirements, are set out in the Company’s standalone Complaints Notice published on its website.

Obligations of Holders

Legal Compliance. Holders must comply with all applicable laws, including AML/CFT laws, anti-corruption laws, and sanctions regulations. Holders must not use AXUSD for illegal activities, including money laundering, terrorist financing, bribery, or fraud.

KYC/AML. Holders must provide accurate and complete KYC/KYB information and documents as required. Transactions involving AXUSD must adhere to AML requirements.

Wallet Security. Holders are responsible for securing their wallets, including private keys and wallet addresses. Loss or theft of tokens due to compromised wallet security is the holder's responsibility.

Terms and Conditions. By holding or using AXUSD, holders consent to be bound by the Terms and Conditions, including amendments made by the Company with reasonable prior notice.

Obligations of the Company

Reserve Management. The Company will maintain reserve assets backing all issued tokens in accordance with CBB regulations, ensuring 100% backing at all times (SIO-6.1). The instruments in which the company enters into are all as per the CBB SIO rulebook (SIO 6.1.7):

a) Cash and deposits callable at one day notice held with banks (b) Debt securities with residual maturity of 90 days or less issued (c) Repurchase agreement with a maturity of 7 days or less which are backed by (b) above (d) Short term government money market funds. Similar principles are applied for investing the company’s own funds.

Subscription and Redemption. The Company will process subscription and redemption requests in accordance with the Terms and Conditions, ensuring timely fulfillment.

Compliance. The Company will adhere to all applicable laws and regulations, including AML/CFT requirements, and report suspicious activities to the relevant authorities.

Service Maintenance. The Company will maintain the security and operation of its platform to ensure holders can access services in accordance with the Terms and Conditions.

6. Information on the Underlying Technology

Distributed Ledger Technology

AX Coin tokens are issued on public blockchain networks. Blockchain technology provides a decentralized, immutable ledger of all token transactions, accessible to any participant. Each transaction is cryptographically signed, timestamped, and permanently recorded.

Token Standard

AXUSD tokens are issued as ERC-20F on the Ethereum blockchain. ERC-20F is a Fireblocks-native token standard that extends the widely adopted ERC-20 standard with built-in role-based access control (RBAC). The smart contract has been audited by OpenZeppelin.

The smart contract provides the following on-chain functions:

Each function is controlled by a specific on-chain role, and each role is assigned to a dedicated execution vault with its own signing keys and approval policy. No single individual or system can execute any privileged function unilaterally.

The smart contract is upgradeable, allowing the Company to address bugs, add features, or comply with new regulatory requirements without disrupting existing token balances or requiring holder action.

The Company may extend token issuance to additional blockchain networks in the future, subject to regulatory approval and security review.

Custody and Key Management Architecture

The Company uses Fireblocks MPC infrastructure to manage signing keys and orchestrate every privileged transaction. No private key exists in a single location; key shares are distributed across independent co-signers, and no single party can produce a valid signature unilaterally.

Fireblocks provides:

• Vault management with segregated vault accounts for each operational function
• Transaction Authorization Policy (TAP) engine that enforces approval rules before any transaction is signed
• Multi-party computation (MPC) for secure transaction orchestration
• Real-time policy enforcement, including per-transaction limits, daily limits, multi-level approval requirements, and destination whitelisting

Signing flow:

1. A transaction is initiated through the Fireblocks platform (console or API)
2. The TAP policy engine evaluates the transaction against all configured rules (amount limits, destination whitelist, required approvals)
3. Required approvers review and approve the transaction through their authenticated devices
4. The approved transaction is signed via Fireblocks MPC, with key shares co-signed by independent signers
5. No single party can produce a valid signature; signing requires participation of the configured quorum of co-signers
6. The signed transaction is broadcast to the blockchain

Vault Structure

The Company maintains segregated vault accounts for each operational function:

EVA = Execution Vault Account (controls smart contract functions). SVA = Storing Vault Account (holds tokens).

Transaction Controls

All transactions are subject to the Transaction Authorization Policy (TAP), which enforces:

• Per-transaction limits: Maximum amount per individual transaction
• Daily limits: Maximum aggregate amount per day
• Global burst protection: System-wide daily cap
• Tiered approvals: Transactions above defined thresholds require approval from Compliance, Senior Management, or both
• Destination whitelisting: External transfers only to pre-approved, KYT-screened addresses
• Default deny: Any transaction not matching an explicit allow rule is blocked

Compliance Technology

Travel Rule compliance applies to every transfer, with no minimum threshold. Originator and beneficiary data includes: full name, wallet address, and at least one additional identifier (national ID, customer ID, or date and place of birth), per CBB AML-2A.2.7.

Consensus Mechanism

Ethereum uses a Proof of Stake (PoS) consensus mechanism, where validators stake ETH to participate in block production and validation. This provides transaction finality, energy efficiency, and network security through economic incentives.

Smart Contract Audit

The ERC-20F token standard has been audited by OpenZeppelin. The audit report will be published on the Company's website.

7. Information on the Risks

Prospective holders of AXUSD should carefully consider the following risks before acquiring tokens.

Market and Liquidity Risks

Digital token markets are subject to volatility and uncertainty. While AXUSD is designed to maintain a 1:1 peg to its reference currency, the United States Dollar, secondary market prices may temporarily deviate from par on exchanges or decentralized platforms. Liquidity is not guaranteed on any trading venue. The Company does not guarantee the listing of AXUSD on any exchange or trading platform.

Counterparty Risks

The Company relies on third-party service providers for custody, banking, compliance screening, and technology infrastructure. A failure, breach, or disruption at any of these providers could affect the Company's ability to process subscriptions, redemptions, or transfers. The Company mitigates this risk through provider due diligence, contractual protections, and redundant infrastructure where feasible.

Reserve Asset Risks

Reserve assets are held in high-quality, liquid instruments as required by CBB regulations. However, these assets are not insured by any government deposit insurance scheme. The value of reserve assets could be affected by counterparty default at the custodian bank, regulatory action, or extraordinary market events. The Company ensures 100% reserve backing through daily mark-to-market valuation and will cover any shortfall from its own assets within 1 business day (SIO-6.3).

Technology and Operational Risks

Blockchain technology introduces risks including software bugs, network congestion, protocol upgrades, and smart contract vulnerabilities. While the ERC-20F contract has been audited by OpenZeppelin, no audit eliminates all risk. System outages, hardware failures, or cyberattacks could temporarily disrupt services. Transactions on blockchain networks are irreversible. Tokens sent to incorrect addresses may be permanently lost.

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Blockchain Network Risks

The Ethereum blockchain is a public, decentralized network outside the Company's control. The Company cannot prevent network-level attacks, forks, or disruptions. In the event of a network fork, the Company will recognize tokens on the chain it designates as canonical. Network congestion may delay transaction confirmation.

Cybersecurity Risks

Holders should be aware of phishing attacks, social engineering, malware, and other cyber threats that could compromise their wallets or credentials. The Company employs multi-layer security (MPC key management, policy engine enforcement, real-time transaction screening) but cannot protect against compromises of holders' own devices or credentials.

Regulatory and Legal Risks

The legal status and regulatory treatment of stablecoins varies across jurisdictions and is subject to change. New regulations could restrict the issuance, distribution, or use of AXUSD in certain markets. Holders are responsible for understanding and complying with the laws of their jurisdiction, including tax obligations.

Redemption Risks

While the Company guarantees a right to redemption at par value, processing may take up to 5 business days. In the event of significant market disruptions beyond the Company's control, redemption may be delayed until normal market conditions resume (SIO-6.5.2(b)). Redemption requires compliance with KYC/AML requirements. Holders who cannot satisfy these requirements may be unable to redeem.

Other Risks

Digital token technology is evolving. Risks not currently anticipated may emerge, including novel attack vectors, regulatory developments, or technological changes that could affect the value, utility, or accessibility of AXUSD.

Risk Mitigation

The Company has implemented the following measures:

• Security architecture: MPC-based key management with key shares distributed across independent co-signers, multi-party approval for all privileged operations, real-time transaction monitoring
• Compliance framework: KYC/KYB verification, AML transaction screening, Travel Rule compliance on every transfer, sanctions monitoring
• Reserve management: 100% backing at all times, daily mark-to-market, monthly independent external audit, segregated reserves, shortfall coverage within 1 business day
• Operational resilience: Business continuity plan with defined RPO and RTO targets, incident response procedures, redundant infrastructure
• Governance: Board oversight, independent internal audit, segregation of duties, bi-annual policy review

8. Information on the Reserve Assets

Reserve Composition

All AXUSD tokens in circulation are backed by reserve assets at a minimum ratio of 1:1. Reserve assets are composed exclusively of high-quality liquid assets as permitted under SIO-6.1.7:

No corporate bonds, equities, crypto assets, commercial paper, or instruments with maturity exceeding 90 days are permitted in the reserve portfolio.

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Valuation

Reserve assets are valued on a daily basis using mark-to-market methodology, at the prudent (bid) side of the market (SIO-6.1.3, SIO-6.1.4). If market data is insufficient, the Company will use conservative mark-to-model valuation (SIO-6.1.5).

Segregation

Reserve assets for AXUSD are maintained in segregated accounts, separate from the Company's own operating funds. Reserve assets are held in trust for token holders through Declaration(s) of Trust, ensuring they maintain independent legal status and are exclusively dedicated to backing the respective stablecoin.

Custody

Reserve assets will be maintained with licensed custodian banks in Bahrain, in compliance with SIO-6.4. Assets are segregated from the Company's proprietary holdings. [Reserve custodian bank name(s) and custody arrangement details to be included here.]

Shortfall Procedures

If reserve assets fall below the face value of circulating tokens for any reason, the Company will:

1. Immediately investigate the cause
2. Replenish the shortfall from the Company's own assets within 1 business day (SIO-6.3)
3. Report the incident and remediation to the CBB

Audit and Disclosure

Reserve adequacy is confirmed through monthly independent external audit reports (SIO-6.2.1), which verify:

• 100% reserve backing
• Number and market value of tokens in circulation
• Composition and value of reserve assets

These reports are submitted to the CBB and published on the Company's website by the end of the month following the reporting period (SIO-6.2.2).

9. Glossary of Defined Terms and Abbreviations

10. Applicable Law and Competent Courts

Applicable Legal System

The Company is governed by and subject to the laws and regulations of the Kingdom of Bahrain, including Legislative Decree No. (64) of 2006 with respect to the Central Bank of Bahrain and Financial Institutions Law, together with all directives, rulebooks, and circulars issued by the Central Bank of Bahrain.

Dispute Resolution

Any dispute shall first be settled amicably by mutual consultation between the parties concerned. If no settlement is reached within thirty (30) days, the dispute shall be referred to and finally resolved by arbitration administered by the Bahrain Chamber for Dispute Resolution (BCDR) in accordance with the Arbitration Rules of the BCDR then in force. The seat of arbitration shall be the Kingdom of Bahrain. The tribunal shall consist of one (1) arbitrator. The language of arbitration shall be English.

In the event the parties do not agree to submit the dispute to arbitration, or if arbitration is deemed unenforceable, the competent courts of the Kingdom of Bahrain, including the Civil High Court, shall have exclusive jurisdiction, without prejudice to the supervisory authority of the Central Bank of Bahrain where applicable.

11. Declaration of the Persons Responsible

The Board of Directors of AX COIN BAHRAIN B.S.C, whose names and signatures appear below, hereby declares that, to their knowledge, the information presented in this stablecoin whitepaper corresponds to the facts and contains no omission liable to make it misleading. The Board of Directors accepts full responsibility for the information contained in this stablecoin whitepaper.

This statement is made in accordance with Paragraph SIO-7.1.4 of the Central Bank of Bahrain Rulebook Volume 6, Stablecoin Issuance and Offering Module.