regulatory statement page

1. This statement is provided by Kraster Technology Solutions Limited (`Kraster`) in response to request concerning the applicability of the UK Financial Conduct Authority (FCA) rules on cryptoasset financial promotions to our mobile application, the Kraster Wallet App. We confirm that the Kraster Wallet App does not fall within the scope of the UK`s financial promotion regime under the Financial Services and Markets Act 2000 (FSMA) or the Conduct of Business Sourcebook (COBS) 4.12A of the FCA Handbook. This letter sets out the legal and factual basis for that conclusion.

2. Product description

The Kraster Wallet App is a non-custodial application for a physical cold wallet developed and distributed by Kraster. Its primary function is to enable users to securely pair with and manage their hardware wallet device.

The App operates solely as a non-custodial utility and does not support any functionality such as buying, selling, staking, issuance or promotion of tokens, yield generation, airdrops, or similar incentive mechanisms. Any optional integrations with third-party services are initiated by users and do not involve Kraster in the custody, execution, or promotion of cryptoasset transactions.

The App also does not communicate or display any content that could be interpreted as an investment opportunity or promotion.

The App does not store, process, or transmit any private keys or cryptoassets. All cryptographic material remains fully under the user`s control and is stored exclusively on the hardware device. Kraster has no access to user funds or seed phrases at any time.

This functionality is described in detail in our Privacy Policy and other publicly disclosed documentation, and reflects a strict non-custodial design based on data minimization and user autonomy.

Accordingly, the App does not exhibit any characteristics that would bring it within scope of the UK financial promotion regime under the Conduct of Business Sourcebook (COBS) 4.12A of the FCA Handbook.

3. Jurisdiction status

Kraster Technology Solutions Limited is a company incorporated and headquartered in Hong Kong SAR, with no branch, subsidiary, or operational infrastructure in the United Kingdom.

The Kraster Wallet App is developed and maintained entirely outside the UK. It is not marketed, promoted, or distributed in a manner that is directed toward UK-based users.

While the App may be technically accessible in the UK, its design, language, marketing channels, and support services are not specifically targeted at or adapted for UK consumers.

Specifically, it does not: reference UK law or regulations; offer UK pricing or currency options; is marketed through UK-specific channels or platforms; or provide customer support located in the UK.

In accordance with COBS 4.12A.6R of the FCA Handbook and the FCA`s guidance in Policy Statement PS23/6, neither the App nor Kraster`s business operations constitute an `invitation or inducement to engage in investment activity` that is capable of having an effect in the United Kingdom.

Accordingly, Kraster is not subject to the financial promotion rules under FSMA Section 21 or the FCA Handbook, and no FCA authorization or promotion approval is required in relation to the App`s design or distribution.

4. Legal assessment

Under Section 21 of the Financial Services and Markets Act 2000 (FSMA), a communication is considered a financial promotion if it constitutes an invitation or inducement to engage in investment activity, made in the course of business and directed to, or capable of having an effect on, UK consumers.

In light of the FCA`s cryptoasset promotion regime, as set out in COBS 4.12A (effective from 8 October 2023) and clarified in Policy Statement PS23/6, we have assessed the current version of the Kraster Wallet App and conclude that it falls outside the scope of these rules, based on the following factors:

• the App provides no investment, trading, or exchange functionality;
• it does not offer, issue, or promote cryptoassets, nor facilitate their purchase or sale;
• it does not involve custody or control of user funds, private keys, or transactional authority;
• it does not contain any language, visual elements, or structure that could reasonably be interpreted as a financial promotion;
• it does not carry out any activity requiring FCA authorisation or financial promotion approval, including those described in COBS 4.12A.17R to 4.12A.19G.

Functionally, the App serves as a local interface to a hardware device. It does not possess the features typically associated with a qualifying cryptoasset business, as described in the FCA`s Policy Statement PS23/6. Any future technical integrations with external service providers, if implemented, would be entirely user-initiated and would not involve Kraster in the custody, execution, or promotion of cryptoasset activity.

Accordingly, Kraster is not currently required to obtain FCA authorization or to have its communications approved under FSMA Section 21.

5. Conclusion

Based on the above analysis, the Kraster Wallet app, as currently developed and distributed, does not fall within the scope of the financial promotion regime of cryptoassets in the UK. It does not constitute financial promotion under Section 21 of FSMA or COBS 4.12A, and does not require FCA authorization or approval in relation to the app`s functionality or availability in the UK.

Therefore, Kraster Technology Solutions Limited has no obligation to comply with regulatory requirements related to the promotion of relevant cryptoassets.

If the app`s functionality or distribution model changes materially in the future, Kraster will review its regulatory position and ensure full compliance with all applicable UK requirements.