TOKENIZED SECURITIES
TERMS AND CONDITIONS
The following terms and conditions (these "Terms") set out the terms pursuant to which the third-party token issuer (the "Token Issuer" or "Issuer") issues tokenized securities tokens (the "Tokens"), and MEXC and its affiliates ("MEXC" or the "Platform Operator"), in its capacity as intermediary and platform service provider, facilitates the subscription, holding and redemption of Tokens through the MEXC Platform (as defined below).
These Terms govern the contractual relationship between you (the "User"), the Platform Operator and the Token Issuer in respect of your subscription, holding and redemption of Tokens via the MEXC Platform. The Token Issuer shall be the sole issuer of the Tokens and the legal obligor in respect of Token redemption and the backing of Tokens by Underlying Assets. MEXC acts solely in the capacity of platform operator and intermediary facilitating User access to the Token program, and is not the issuer of the Tokens. Tokens subscribed for and held on the MEXC Platform may only be redeemed through the MEXC Platform. The specific operational rules, parameters and procedures for the Token program shall be as published on the MEXC Platform from time to time.
IMPORTANT NOTICE: The Tokens subscribed for by you under these Terms are tokenized securities issued by the Token Issuer and do not constitute a direct purchase or holding of U.S.-listed stocks or ETFs. Each Token represents a contractual entitlement to the economic value of one share (or a specified fractional interest in one share) of the corresponding Underlying Asset, recorded on a distributed ledger, and shall not constitute direct ownership of, or legal title to, the Underlying Securities. Subject to the token issuance and circulation rules established by the Token Issuer, Tokens may be non-transferable or transferable only on a restricted basis. Please refer to the announcements published from time to time by the MEXC Platform or the Token Issuer.
You, the Token Issuer and the Platform Operator are each referred to herein as a "Party" and collectively as the "Parties."
You should consult your own legal, financial, tax and other professional advisors before participating in the Token program. If you do not agree to these Terms, you must not subscribe for, hold or redeem any Tokens.
Tokens may be disposed of solely through: (i) the redemption mechanism set out in Article VI of these Terms; or (ii) the U.S. Stock Conversion mechanism described in Schedule 4 and further detailed in the applicable Platform Rules.
These Terms do not constitute an offer to sell or a solicitation of an offer to buy Tokens in any jurisdiction in which such offer or solicitation would be unlawful. The Token Issuer reserves the right to adjust, suspend or terminate the Token program at any time in accordance with Applicable Law and its own commercial judgment.
By accepting these Terms and participating in the Token program, you agree to be legally bound by these Terms (including the Schedules hereto), the MEXC Platform User Agreement, and all applicable rules, announcements and guidelines published on the MEXC Platform from time to time. You expressly acknowledge that you have carefully reviewed these Terms and fully understand the risks, costs and consequences of participating in the Token program.
ARTICLE I — INTRODUCTION, SCOPE AND DEFINITIONS
Section 1.1 Definitions
Capitalized terms used in these Terms shall have the meanings ascribed to them in Schedule 1 hereto.
Section 1.2 Scope and Hierarchy
These Terms (including the Schedules hereto), together with the MEXC Platform User Agreement and the applicable Platform Rules, govern the subscription, holding and redemption of Tokens by Users through the MEXC Platform. Where these Terms make specific provision for a particular matter, these Terms shall prevail. Where these Terms are silent or ambiguous, the MEXC Platform User Agreement and applicable Platform Rules shall apply. In the event of any inconsistency between these Terms and the separate terms of service of the Token Issuer, the matter in question shall be construed in accordance with the applicable provisions as reasonably determined by MEXC and the Token Issuer acting in good faith.
Section 1.3 Roles of the Parties
(a) Token Issuer. The Token Issuer is the issuer of the Tokens and is responsible for the overall structuring of the Token program, including the backing of Tokens by Underlying Assets and the performance of core issuer obligations. The Token Issuer appoints third-party service providers, including the Licensed Broker-Dealer for custody services and the Token Agent for on-chain tokenization services. The specific identity and terms of service of the Token Issuer shall be as published on the MEXC Platform from time to time.
(b) Platform Operator (MEXC). MEXC operates the MEXC Platform as an intermediary, providing User account administration, the Token subscription interface, processing of redemption and Conversion requests, KYC/AML verification, and customer support services. MEXC does not issue Tokens and does not hold legal or beneficial title to any Underlying Assets.
(c) User. You are the User subscribing for, holding and redeeming Tokens through the MEXC Platform in accordance with these Terms and the applicable Platform Rules.
ARTICLE II — ELIGIBILITY TO PARTICIPATE (RESTRICTED PERSONS)
Section 2.1 Territorial and Legal Restrictions
You shall not participate in the Token program if such participation is prohibited or restricted by Applicable Law in your jurisdiction of residence or domicile. You are solely responsible for ensuring that your subscription, holding and redemption of Tokens do not contravene any Applicable Law, regulation or rule in your jurisdiction.
Section 2.2 Restricted Persons
You shall not be eligible to participate, and shall not participate, in the Token program if you fall within any category of Restricted Person as set out in Schedule 1 or as otherwise determined by MEXC or the Token Issuer in accordance with Applicable Law and their respective compliance policies.
Section 2.3 KYC and AML Verification
Access to the Token program is subject to you successfully completing Know Your Customer ("KYC") and Anti-Money Laundering ("AML") verification to the reasonable satisfaction of the Platform Operator. Specific KYC/AML requirements and procedures are set out in the MEXC Platform User Agreement and related compliance rules, as may be updated from time to time.
ARTICLE III — TOKEN SUBSCRIPTION AND BACKING
Section 3.1 Subscription Mechanics
To subscribe for Tokens, you must hold a verified Account on the MEXC Platform and have accepted these Terms. Tokens shall be recorded in book-entry form under your Account on the MEXC Platform. The availability, timing and parameters of Token subscriptions shall be as announced on the MEXC Platform from time to time at the sole discretion of the Token Issuer.
Section 3.2 One-for-One Backing Principle
Each Token is intended to be backed on a one-for-one (1:1) basis by the corresponding Underlying Asset held in custody for the Token program. The Token Issuer shall use commercially reasonable efforts to maintain such one-for-one backing. Specific backing arrangements and reporting mechanisms shall be as determined by the Token Issuer and published or made available through the MEXC Platform from time to time.
Section 3.3 Pricing
Token subscription and redemption pricing shall be based on the market value of the corresponding Underlying Asset, as determined by the Token Issuer applying its selected pricing methodology. Specific pricing rules, data sources and methodologies shall be as published on the MEXC Platform. Token prices may deviate from real-time market prices due to a variety of factors, including fees, foreign exchange fluctuations and prevailing market conditions.
Section 3.4 Custody of Underlying Assets
Underlying Assets shall be held in custody by the Licensed Broker-Dealer or such other qualified custodian as may be appointed by the Token Issuer from time to time. MEXC does not hold, control or have custody of any Underlying Assets. Custody arrangements are governed by the agreements between the Token Issuer and the relevant custodian.
ARTICLE IV — TOKEN HOLDER RIGHTS
Section 4.1 Delivery of Tokens
Tokens shall be credited to your Account on the MEXC Platform upon successful completion of the subscription process. Specific delivery timelines shall be as published on the MEXC Platform. Tokens shall be deemed to have been received by you when they are reflected in your Account on the MEXC Platform.
Section 4.2 Transfer Restrictions
Subject to the token issuance and circulation rules established by the Token Issuer, Tokens may be non-transferable or transferable only on a restricted basis. Without the prior written authorization of the Token Issuer, you shall not transfer, trade, offer, sell, pledge, hypothecate or otherwise dispose of Tokens on any secondary market, including any cryptocurrency exchange, decentralized exchange or over-the-counter venue. Permitted methods of disposing of Tokens shall be as announced by the MEXC Platform or the Token Issuer from time to time, and currently include redemption and U.S. Stock Conversion, each subject to their respective conditions and procedures. Please refer to the announcements published from time to time by the MEXC Platform or the Token Issuer.
Section 4.3 Summary of Token Holder Rights
You acknowledge and agree that Tokens are not U.S.-listed stocks or ETFs, do not constitute direct ownership of or legal title to the Underlying Securities, and shall not render you a shareholder of the Token Issuer or of the issuer of the Underlying Securities. Token holders have contractual rights against the Token Issuer, which may include, without limitation, the following (subject to the specific terms and conditions applicable at the relevant time):
(a) Economic Entitlement. Each Token represents a contractual entitlement to the economic value of the specified Underlying Asset, exercisable by way of redemption.
(b) Redemption Right. You may request redemption of Tokens in accordance with Article VI and the applicable Platform Rules.
(c) Dividend Pass-Through Right. To the extent that cash dividends or other distributions are received in respect of Underlying Assets, the corresponding economic value may be passed through to Token holders, net of applicable Taxes and fees, in accordance with the dividend policy of the Token Issuer as published from time to time.
(d) Corporate Action Adjustments. Corporate actions affecting Underlying Assets may be reflected by way of adjustments to Tokens as the Token Issuer determines to be appropriate to preserve economic proportionality.
(e) Conversion Right. Subject to Schedule 4 and the applicable Platform Rules, you may apply to convert Tokens into actual U.S. equity securities.
The specific implementation, conditions, procedures and fees relating to the foregoing rights shall be as set out in the applicable Platform Rules and announcements.
Section 4.4 Disclaimer
Tokens are provided on an "as is" and "as available" basis. Neither the Token Issuer nor MEXC makes any representations or warranties, express or implied, with respect to the Tokens except as expressly set out in these Terms. The risk of loss in holding Tokens can be substantial. You should carefully consider whether tokenized securities are suitable for you in light of your financial circumstances and risk tolerance.
ARTICLE V — SUSPENSION, REJECTION AND REFUNDS
The Token Issuer and/or MEXC reserve the right, in their sole discretion, to suspend Token subscriptions, reject any subscription request, or declare any completed subscription null and void ab initio, at any time for any reason, including but not limited to: changes in Applicable Law or regulatory requirements, you becoming a Restricted Person, compliance concerns, or operational necessity. In the event of rejection or suspension, refunds shall be processed in accordance with the applicable Platform Rules, net of any applicable administrative and transaction fees. Save as expressly provided in these Terms, Tokens are not subject to refund other than by way of redemption or Conversion.
ARTICLE VI — TOKEN REDEMPTION
Section 6.1 Redemption Right
Subject to Applicable Law and the terms of these Terms, you may submit a redemption request via the MEXC Platform to redeem all or part of your Tokens. Redemption proceeds shall be settled in U.S. dollar-denominated stablecoins or such other form of consideration as the Token Issuer may accept from time to time. Tokens subscribed for and held on the MEXC Platform may only be redeemed through the MEXC Platform.
Section 6.2 Redemption Process
Redemption requests shall be submitted via the MEXC Platform and processed by the Token Issuer in accordance with its then-current procedures. Upon completion of processing, the corresponding Tokens shall be burnt and the redemption proceeds shall be credited to your Account on the MEXC Platform. Specific processing timelines and procedures shall be as published on the MEXC Platform from time to time.
Section 6.3 Redemption Price
The redemption price per Token shall be calculated based on the net proceeds from the sale of the corresponding Underlying Assets, net of all applicable transaction costs and redemption service fees. Specific pricing and fee structures shall be as published on the MEXC Platform from time to time.
Section 6.4 Conditions and Limitations
Redemption is subject to your ongoing compliance with KYC/AML requirements, Applicable Law and any other conditions set out in the applicable Platform Rules. The Token Issuer may establish minimum and/or maximum redemption thresholds, frequency limits, and may defer or restrict redemptions in certain circumstances including Market Disruption Events, liquidity constraints or regulatory requirements, all as more particularly set out in the applicable Platform Rules.
ARTICLE VII — REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE USER
By accepting these Terms and subscribing for Tokens, you represent, warrant and covenant to the Token Issuer and MEXC, as at the date of acceptance and as at each date on which you subscribe for, redeem or convert Tokens, that:
(a) you are subscribing for Tokens for your own account, for investment purposes only, and not as nominee or agent for any other person, and not with a view to, or for resale in connection with, any distribution thereof;
(b) you have such knowledge and experience in financial, business and technological matters (including distributed ledger technology) as to be capable of evaluating the merits and risks of purchasing Tokens, and you are able to bear the economic risk of, and a complete loss of, your investment;
(c) your subscription, holding and redemption of Tokens comply with all Applicable Laws and regulations in your jurisdiction;
(d) you are a Non-U.S. Person as defined in Regulation S under the U.S. Securities Act of 1933, as amended, and you are not acquiring Tokens for the account or benefit of any U.S. Person;
(e) you acknowledge and understand that Tokens do not represent direct ownership of Underlying Assets, and that the transfer of Tokens is subject to the issuance and circulation rules of the Token Issuer;
(f) you are not a citizen or resident of, or located in, any Prohibited Jurisdiction, and you are not a person subject to any Sanctions;
(g) the funds used to purchase Tokens are not derived from any activity prohibited by anti-money laundering or counter-terrorism financing laws;
(h) you shall be solely responsible for determining the tax consequences of your participation in the Token program; and
(i) the representations and warranties set out in this Article VII are true, correct and complete as of the date you accept these Terms and shall be deemed to be repeated each time you subscribe for, redeem or convert Tokens.
ARTICLE VIII — DISCLAIMERS
To the fullest extent permitted by Applicable Law, neither the Token Issuer nor MEXC (nor any of their respective affiliates, directors, officers, employees, agents or service providers) shall have any liability whatsoever for:
(a) any failure, malfunction, suspension or interruption in the operation of Tokens, distributed ledger technology or the MEXC Platform, including, without limitation, those arising from hacking, cyberattacks, bugs or programming deficiencies;
(b) any decline, depreciation or fluctuation in the value of Underlying Assets or Tokens;
(c) any changes in Applicable Law or regulation affecting Tokens or the Token program;
(d) any loss of access to your Account or compromise of your credentials;
(e) any of the risks described in Schedule 3 (Risk Factors); or
(f) any indirect, special, incidental, consequential, exemplary or punitive losses or damages.
The security of your Account on the MEXC Platform is governed by and subject to the MEXC Platform User Agreement. You shall be solely responsible for safeguarding the security of your account credentials.
ARTICLE IX — LIMITATION OF LIABILITY AND INDEMNIFICATION
Section 9.1 Limitation of Liability
To the fullest extent permitted by Applicable Law:
(a) neither the Token Issuer nor MEXC shall be liable for any indirect, special, incidental, consequential, exemplary or punitive losses or damages arising out of or in connection with your participation in the Token program;
(b) the aggregate liability of the Token Issuer arising out of or in connection with the Tokens shall be limited in accordance with the applicable terms and policies of the Token Issuer; and
(c) the aggregate liability of MEXC arising out of or in connection with the provision of platform services in relation to the Token program shall be limited to the total fees paid by you to MEXC in respect of such services during the twelve (12)-month period immediately preceding the date on which the relevant claim arose.
Section 9.2 Indemnification
You shall indemnify, defend and hold harmless the Token Issuer, MEXC and their respective affiliates, directors, officers, employees, agents and service providers from and against any and all losses, claims, damages, liabilities and expenses (including reasonable legal fees) arising out of or in connection with: (a) any breach by you of these Terms or any applicable Platform Rules; (b) any violation by you of Applicable Law or regulation; or (c) your fraud, gross negligence or willful misconduct.
ARTICLE X — GENERAL PROVISIONS
Section 10.1 Non-Assignability
These Terms are personal to you. You shall not assign, transfer, novate or otherwise dispose of any of your rights or obligations hereunder without the prior written consent of the relevant Party.
Section 10.2 Intellectual Property
Nothing in these Terms shall be construed as granting you any right, title or interest in or to any intellectual property rights of the Token Issuer, MEXC, the Tokens or the MEXC Platform. All rights not expressly granted herein are reserved by the respective owners.
Section 10.3 Survival
Articles VII through IX and all Schedules shall survive any termination or expiration of your participation in the Token program.
Section 10.4 No Waiver
No failure or delay by any Party in exercising any right, power or remedy under these Terms shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy.
Section 10.5 Entire Agreement
These Terms, together with the MEXC Platform User Agreement, the applicable Platform Rules and the applicable terms of the Token Issuer, constitute the entire agreement and understanding between the Parties with respect to the subject matter hereof and supersede all prior agreements, arrangements and understandings relating thereto.
Section 10.6 Taxes
You shall be solely responsible for all Taxes, duties and levies arising from or in connection with your subscription, holding, redemption or conversion of Tokens. Neither the Token Issuer nor MEXC provides tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors.
Section 10.7 Notices
Notices and communications under these Terms shall be deemed duly given when delivered to the message center of your Account on the MEXC Platform, or when published on the MEXC Platform, as the case may be.
Section 10.8 Dispute Resolution
Any dispute arising out of or in connection with these Terms shall first be resolved through good-faith amicable negotiation; failing which, such dispute shall be resolved in accordance with the dispute resolution mechanism set out in the MEXC Platform User Agreement.
Section 10.9 Amendments
MEXC and/or the Token Issuer reserve the right, from time to time, to amend these Terms or the applicable Platform Rules. Material amendments shall be notified via the MEXC Platform in advance of their effective date. Your continued holding of Tokens or use of the Platform following the effective date of any amendment shall constitute your acceptance thereof.
Section 10.10 Severability
If any provision of these Terms is held to be invalid, illegal or unenforceable, the remaining provisions shall remain in full force and effect. The Parties shall use reasonable endeavors to replace such invalid provision with a valid provision that gives effect to the intended economic and legal purpose of the original provision.
SCHEDULE 1 — DEFINITIONS AND INTERPRETATION
"Account" means your registered user account on the MEXC Platform.
"Applicable Law" means all applicable laws, statutes, regulations, rules, codes, orders, judgments, decrees and directives of any governmental or regulatory authority having jurisdiction, including all applicable sanctions laws and regulations.
"Conversion" means the conversion of Tokens into the corresponding Underlying Securities in accordance with Schedule 4 and the applicable Platform Rules.
"Digital Asset" means any cryptocurrency, stablecoin, token or other digital asset based on blockchain or distributed ledger technology.
"FATF" means the Financial Action Task Force on Money Laundering.
"Indemnitees" means the respective subsidiaries, affiliates, directors, officers, employees, agents, service providers and advisors of the Token Issuer and MEXC, including the Licensed Broker-Dealer and the Token Agent.
"Licensed Broker-Dealer" means the qualified professional institution(s) appointed by the Token Issuer to provide securities trade execution, clearing and custody services in respect of Underlying Securities. The specific broker-dealer(s) shall be as designated by the Token Issuer from time to time.
"Market Disruption Event" means any event or circumstance that, in the reasonable determination of the Token Issuer or MEXC, disrupts or impairs the normal operation of the market for Underlying Assets, the Token program or the MEXC Platform, including market halts, trading suspensions, material liquidity constraints, force majeure events or regulatory actions.
"MEXC" or "Platform Operator" means MEXC and its affiliates, the operator of the MEXC Platform, acting as intermediary and platform service provider for the Token program.
"MEXC Platform" means the official MEXC website and related applications through which Users conduct Token subscription, holding, redemption and Conversion operations.
"Non-U.S. Person" has the meaning ascribed to it in Regulation S promulgated under the U.S. Securities Act of 1933, as amended.
"OFAC" means the Office of Foreign Assets Control of the U.S. Department of the Treasury.
"Platform Rules" means all applicable rules, guidelines, announcements, FAQs and fee schedules published on the MEXC Platform from time to time in relation to the Token program.
"Prohibited Jurisdictions" means North Korea, Cuba, Sudan, Iran, Mainland China, Singapore, the United States, the United Kingdom, Hong Kong, Kazakhstan, the Russian-controlled regions of Ukraine (currently including Crimea, Donetsk, Luhansk, Zaporizhzhia, Kherson, and Sevastopol), and Canada, and/or any country or territory subject to comprehensive economic or trade sanctions administered by: (i) the European Union (including restrictive measures under Article 215 of the Treaty on the Functioning of the European Union); (ii) OFAC; or (iii) any country identified by FATF as a "High-Risk Jurisdiction Subject to a Call for Action" (commonly known as the FATF "Blacklist"). For the avoidance of doubt, the list of Prohibited Jurisdictions is non-exclusive and is subject to change at any time and from time to time by MEXC in its absolute sole discretion, taking into account legal and compliance considerations.
"Restricted Person" means any person who is: (a) a citizen or resident of, or located in, any Prohibited Jurisdiction; (b) listed on any Sanctions list; (c) a person with whom dealings are prohibited under Applicable Law; or (d) otherwise determined by MEXC or the Token Issuer to be ineligible to participate in the Token program.
"Sanctions" means economic or trade sanctions administered or enforced by OFAC, the United Nations, the European Union, the United Kingdom, Singapore or any other relevant governmental authority.
"Taxes" means all taxes, duties, levies, imposts, deductions, withholdings and other similar charges imposed by any governmental or regulatory authority, together with any interest, penalties or additions thereto.
"Terms" means these terms and conditions, including all Schedules hereto, as may be amended from time to time.
"Token" means a tokenized security issued by the Token Issuer, each Token representing a contractual entitlement to the economic value of one share (or fractional interest) of a specific U.S.-listed stock or ETF (the Underlying Asset). The transfer of Tokens is subject to the issuance and circulation rules of the Token Issuer. Tokens do not constitute direct ownership of Underlying Securities.
"Token Agent" or "Tokenization Services Supplier" means the third-party technology service provider appointed by the Token Issuer to provide smart contract deployment, Token minting and burning, and on-chain record-keeping services.
"Token Issuer" or "Issuer" means the third-party entity that issues the Tokens and is responsible for the structuring of the Token program. The specific identity of the Token Issuer shall be as published on the MEXC Platform from time to time.
"Underlying Assets" or "Underlying Securities" means the U.S.-listed publicly traded securities or ETFs corresponding to the Tokens, held in custody by the Licensed Broker-Dealer or other custodian for the Token program.
"User" means you, the person subscribing for, holding and redeeming Tokens through the MEXC Platform.
SCHEDULE 2 — CUSTODY ARRANGEMENTS
Underlying Assets corresponding to the Tokens are held in custody by the Licensed Broker-Dealer or such other qualified custodian as may be appointed by the Token Issuer from time to time. The Token Issuer is responsible for ensuring that custody arrangements are appropriately structured for the Token program.
Specific custody arrangements, segregated account structures and applicable protections shall be as determined by the Token Issuer in accordance with Applicable Law and its agreements with the relevant custodian. Information regarding custody arrangements shall be made available through the MEXC Platform as the Token Issuer deems appropriate.
MEXC does not hold, control or have custody of any Underlying Assets and assumes no responsibility or liability in respect of custody arrangements.
SCHEDULE 3 — RISK FACTORS
You understand that the subscription, holding and redemption of Tokens involve significant risks, including but not limited to the risks described below. The following list is not exhaustive and does not purport to describe all risks that may apply. You should carefully consider these risks in light of your own financial situation and risk tolerance before participating in the Token program.
Part I — General Risks Relating to Tokens
1. Liquidity and Transfer Restrictions. The transfer of Tokens is subject to the issuance and circulation rules established by the Token Issuer. Tokens may be non-transferable or transferable only on a restricted basis and may not be traded on unauthorized secondary markets. Tokens may be disposed of solely through platform-permitted methods such as redemption and U.S. Stock Conversion, each subject to applicable conditions and limitations. An investment in Tokens is only suitable for sophisticated persons who can bear the loss of their entire investment and who are able to hold Tokens for an indefinite period.
2. General Blockchain and Token Risks. You accept the inherent risks associated with blockchain-based tokens, including potential money laundering risks, fraud risks, the on-chain traceability of transactions, potential theft and cybersecurity risks, and regulatory uncertainty regarding the legal status of blockchain tokens generally.
3. Technology Risk. Blockchain and tokenization technologies are still developing and are subject to known and unknown vulnerabilities. There can be no assurance of uninterrupted or error-free operation, and technological vulnerabilities, bugs or security breaches could result in the loss of Tokens or other adverse consequences.
4. Regulatory Uncertainty Risk. The regulatory landscape for tokenized securities and blockchain-based assets is evolving globally and remains uncertain in many jurisdictions. Regulatory changes or interpretations may adversely affect the Token program, including potentially requiring modification, suspension or termination of the program.
5. Program Risk. The Token program may be modified, suspended or terminated at any time for a variety of reasons, including regulatory changes, operational considerations, changes in service providers, or lack of commercial viability.
6. Account Access Risk. Tokens are accessed through your Account on the MEXC Platform. Loss or compromise of your login credentials may result in inaccessibility or loss of Tokens. Account security is governed by the MEXC Platform User Agreement.
7. Cybersecurity Risk. Digital platforms, blockchain networks and smart contracts may be subject to hacking, cyberattacks, phishing, malware or other malicious activities, potentially resulting in theft or loss of assets.
8. Consensus and Protocol Risk. Public blockchains may be vulnerable to consensus attacks, protocol changes, forks or other technical events that could materially affect the operation or value of Tokens.
Part II — U.S. Stock Token-Specific Risks
9. Non-Direct Holding Risk. Tokens are not U.S.-listed stocks or ETFs. You are not the registered or beneficial owner of the Underlying Securities and do not enjoy direct shareholder rights such as voting rights, rights to attend meetings, or inspection rights.
10. Legal Structure Risk. Token interests represent contractual rights rather than registered securities holdings. The legal structure of tokenized securities differs fundamentally from direct ownership of securities, and your rights are subject to the terms of these Terms and the applicable arrangements between the Token Issuer and its service providers.
11. Liquidity Risk. Due to transfer restrictions, Token positions may only be exited through platform-permitted methods such as redemption or Conversion, which are subject to conditions, fees, processing times and potential limitations. You may not be able to liquidate your position at a desired time or price.
12. Market Risk. Token values are linked to the prices of the underlying U.S. equity assets and therefore bear the full market risks of the U.S. stock market, including overall market declines, individual stock performance, interest rate movements and geopolitical events.
13. Price Deviation Risk. Token prices may deviate from the real-time market prices of the Underlying Securities due to fees, slippage, differences in pricing data sources, foreign exchange fluctuations, operational delays and other factors.
14. Dividend and Corporate Action Risk. Dividends and corporate actions are reflected indirectly through adjustments to Tokens, which may involve delays, calculation differences, fee deductions or threshold limitations. The timing and amount of any pass-through may differ from the underlying corporate action.
15. Tax Risk. The tax treatment of tokenized securities is uncertain in many jurisdictions and may change, potentially with retroactive effect. You should consult independent tax advisors regarding your specific tax situation.
16. Conversion Feasibility Risk. Conversion to actual U.S. equity securities requires satisfaction of various eligibility and account opening conditions. There can be no assurance that you will qualify for or be able to complete Conversion.
17. Custodian and Broker-Dealer Risk. Underlying Assets are held by third-party custodians and broker-dealers. You bear the credit, operational and insolvency risks of such third parties.
18. Regulatory Policy Risk. Regulatory policies regarding real-world asset (RWA) tokenization and tokenized securities are evolving. Future policy changes may result in structural adjustments, mandatory redemption, or termination of the program.
19. Delisting or Suspension Risk. If an Underlying Asset is delisted, suspended or halted from trading, the redemption or Conversion of the corresponding Tokens may be delayed, impaired or rendered impossible, and the value of such Tokens may be materially adversely affected.
20. Stablecoin Risk. To the extent that redemption proceeds or dividend distributions are made in stablecoins, you bear the risks associated with such stablecoins, including potential loss of peg, issuer risk and regulatory risk.
Part III — Structural and Service Provider Risks
21. Service Provider Risk. The Token program relies on multiple third-party service providers, including the Token Issuer, custodians, broker-dealers and technology providers. Any failure, negligence, insolvency or misconduct by such providers could adversely affect the Tokens or your interests therein.
22. Smart Contract Risk. Smart contracts used for Tokens may contain vulnerabilities, bugs or unforeseen issues that could lead to asset loss, disruption or manipulation. Security audits, if any, do not guarantee the absence of risks.
23. Transaction Irreversibility Risk. Blockchain transactions are generally irreversible. Errors or unauthorized transactions may result in permanent loss that cannot be recovered.
24. Fork Risk. Blockchain forks may occur. The Token Issuer does not guarantee that Tokens will be supported on all branches of any fork.
25. No Deposit Insurance Risk. Tokens are not bank deposits and are not insured by the FDIC, SIPC or any other governmental or private insurance scheme.
26. Force Majeure Risk. Neither the Token Issuer nor MEXC shall be liable for any failure or delay due to events beyond reasonable control, including natural disasters, war, terrorism, civil unrest, pandemics, governmental actions, or failures of internet or blockchain infrastructure.
27. Third-Party Platform Risk. Unauthorized third-party platforms may reference or purport to support Tokens. The Token Issuer and MEXC are not responsible for any losses arising from the use of such unauthorized platforms.
28. Account Freeze Risk. MEXC and the Token Issuer reserve the right to freeze accounts or restrict Token-related operations where they reasonably suspect illegal activities, sanctions violations, fraud, or breaches of these Terms or Platform Rules.
29. Program Termination Risk. The Token program may be terminated at any time. In the event of termination, the process and timeline for winding down and redemption may vary and may be subject to regulatory or operational constraints.
30. Operational Risk. User errors such as incorrect addresses or improper formatting in connection with Token operations may result in irreversible loss of assets.
SCHEDULE 4 — U.S. STOCK CONVERSION MECHANISM (SUMMARY)
Section 4.1 Nature of Conversion Right
Subject to applicable conditions, Token holders may have the option to apply to convert their Tokens into the corresponding actual U.S.-listed equity securities (the "Underlying Securities") and to have such securities transferred to a qualified U.S. securities brokerage account held in the User's own name (the "Conversion"). Conversion is an optional feature of the Token program, the availability and terms of which are determined by the Token Issuer and may be adjusted, suspended or terminated at any time.
The Conversion of Tokens shall be treated as a redemption of the corresponding Tokens, and such Tokens shall be effectively retired upon completion of Conversion. Following Conversion, you will hold the Underlying Securities directly and will no longer have any Token-related rights in respect of the converted amount.
Section 4.2 General Conditions
Eligibility for Conversion is subject to conditions which may include, without limitation:
(a) compliance with applicable KYC/AML and sanctions requirements;
(b) the successful opening and maintenance of a qualified U.S. securities brokerage account with a receiving broker-dealer acceptable to the Token Issuer, including completion of all required account opening documentation, identity verification, tax forms (such as IRS Form W-8BEN or equivalent) and other requirements;
(c) satisfaction of any minimum conversion amount thresholds;
(d) the receiving account being held in the User's own name (third-party accounts are not permitted); and
(e) compliance with all Applicable Laws and regulatory requirements in the User's jurisdiction and in the United States.
The specific conditions, eligibility criteria and required documentation shall be as set out in the applicable Platform Rules and as may be updated from time to time.
Section 4.3 Conversion Process Overview
Conversion applications are submitted via the MEXC Platform. The general process typically includes application submission, eligibility review, the locking of Tokens during processing, the transfer of securities, and the retirement of Tokens upon completion. However, the specific steps, processing times, documentation requirements and procedures may vary and shall be as more particularly set out in the applicable Platform Rules and guidance.
Section 4.4 Fees and Costs
Conversion is subject to fees and costs which may include conversion service fees, securities transfer fees, brokerage fees and any applicable Taxes or duties. All such fees and costs shall be borne by the User. The specific fee structure shall be as published on the MEXC Platform from time to time.
Section 4.5 Post-Conversion
Upon successful completion of Conversion:
(a) you cease to be a Token holder in respect of the converted amount and all Token-related rights terminate in respect thereof;
(b) you become the holder of the Underlying Securities directly, subject to the terms and conditions of your receiving broker-dealer and Applicable securities laws; and
(c) converted securities cannot be converted back into Tokens through the Token program.
Section 4.6 Right to Reject, Suspend or Terminate
The Token Issuer and/or MEXC reserve the right to reject any Conversion application, suspend the Conversion service, or terminate the Conversion feature entirely, at any time and for any reason, including but not limited to: non-compliance with conditions, regulatory changes, market disruptions, operational constraints, or suspected illegal activity.
Section 4.7 Tax Considerations
Converting Tokens into actual equity securities may have tax implications in your jurisdiction and/or in the United States. You should consult your own tax, legal and accounting advisors regarding the tax consequences of Conversion. Neither the Token Issuer nor MEXC provides tax, legal or accounting advice.
Section 4.8 Further Information
This Schedule provides only a general summary of the Conversion feature. The detailed rules, procedures, requirements, fees, processing timelines and applicable terms for Conversion shall be as set out in the applicable Platform Rules, announcements and guidance published on the MEXC Platform from time to time. If you have any questions regarding Conversion, please contact MEXC customer support for assistance.
