Polybius Prospectus

Wednesday, June 20, 2018
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POLYBIUS PROSPECTUS A Project of a Regulated Bank for the Digital Genera�on

Table of contents Polybius Prospectus table of contents Introduc�on 1 What is Polybius? 2 ICO Structure 3 Polybius Milestones Plan 6 Polybius Bank and Payment Ins�tu�on Incremental Structure 7 Authorized Payment Ins�tu�on 8 Electronic Money Ins�tu�on 10 Commercial Bank 12 Digital Pass 14 Small and Medium Enterprise Financial Marketplace 17 Core Team 18 Regula�ons 20 Appendix 1: Preliminary Organiza�onal Chart and Key En��es 21

Introduction Digitaliza�on of our daily lives is now an undisputed phenomenon, which is here to stay. According to studies made in 2015 and 2016, over 80% of developed countries’ popula�on have some access to the Internet. Furthermore, over 60% of European ci�zens own a smartphone. It implies them being near constantly online. With the world ge�ng more connected, an increasing number of companies strive to offer their services and solu�ons online. Finance, educa�on, healthcare, commerce and leisure providers are ac�vely moving towards digi�za�on in an a�empt to serve the exis�ng and find new customers worldwide. European Parliament, along with other regulatory authori�es across the globe are now ac�vely outlining new rules and principles for e-services. The legal framework removes regulatory uncertainty serving as a catalyst for the business migra�on online. We’ve undertaken a thorough analysis of the latest trends including rules around eID, QES and Trustee services as well as the Aggrega�on of Payment Services within the scope of the PSD2. And this is where Polybius steps in. Polybius Foundation, a team of financial, security, legal and technical experts is raising funds for its project Polybius Bank. Our goal is to capitalize on the broader digitaliza�on trend with a par�cular focus on: 1. Financial services which is at the core of all business interac�ons; 2. Digital ID and wallet concepts needed to serve as gateway to the eCommerce market. With the success of the ICO, Polybius Bank will become a fully digital bank accessible everywhere at any �me. It will have all the func�ons of a classical bank, but will not host any branches nor physical front-offices and will rely fully on the latest digital technologies. This will enable Polybius Bank to be among the least expensive banks to operate in the world, with a very efficient cost/revenue ra�o and gran�ng its backers with higher returns. The Polybius Bank project is aimed to establish an online scalable financial infrastructure for businesses and individuals, provide electronic iden�ty and trustee services across the EU, and create a user authen�ca�on and payment processing gateway for not only online merchants, but also commercial, corporate and governmental services. This prospectus covers business, technical and regulatory details of the project, our step-by-step milestone plan and the technologies which will be developed as the basis of Polybius infrastructure. The tokens have not been and will not be registered under the United States Securi�es Act of 1933, as amended (the “Securi�es Act”), and may not be offered or sold in the United States or to or for the benefit of US persons (as defined in Regula�on S under the Securi�es Act) unless they are so registered, or an exemp�on from the registra�on requirements of the Securi�es Act is available. One such exemp�on allows the resale of tokens purchased for their own account and for investment purposes only by investors who (i) are not otherwise affiliated with the Polybius Founda�on, (ii) have been exposed for some �me to the economic risks that ownership of tokens entails, and (iii) are not part of the distribu�on of the tokens. Polybius Prospectus 1

What is Polybius? While star�ng off as primarily a financial ins�tu�on, the Polybius project is meant to grow into your daily servicer and companion ecosystem. It will aim to enable secure and seamless connec�ons between life and the things we love and use every day. The key elements of Polybius ecosystem are the Polybius Foundation and the Digital Pass. Polybius Founda�on is the subject fostering the Polybius Bank or Polybius Payment Ins�tu�on (P.I.) at the start. Its customers will not only get access to a variety of financial services, but will likely be among the first to get the PolyID that will plug them into the Digital Pass environment. Digital Pass is an independent environment as a service, which will serve as a storage for encrypted individual informa�on. The security of access to the informa�on will be enabled by SSL cer�ficates, dynamic PINs and, to some extent, by biometrical data. The security will be compliant with the PSD2 RTS requirements issued by the EBA Authority on 23.02.2017. Among other planned features are scoring and sensi�vity systems for credit and insurance businesses, asset and currency trading systems, seed & VC investment tools, eID and Trust services and other features described in this Prospectus. Polybius is being designed as a highly scalable pla�orm targeted at simplifying our daily lives. PolyID prototype The tokens have not been and will not be registered under the United States Securi�es Act of 1933, as amended (the “Securi�es Act”), and may not be offered or sold in the United States or to or for the benefit of US persons (as defined in Regula�on S under the Securi�es Act) unless they are so registered, or an exemp�on from the registra�on requirements of the Securi�es Act is available. One such exemp�on allows the resale of tokens purchased for their own account and for investment purposes only by investors who (i) are not otherwise affiliated with the Polybius Founda�on, (ii) have been exposed for some �me to the economic risks that ownership of tokens entails, and (iii) are not part of the distribu�on of the tokens. Polybius Prospectus 2

ICO structure The Polybius Foundation is raising funds to support the establishment of the Polybius Bank or the Polybius Payment Institution and to deliver the respec�ve technologies. For that reason, Polybius Foundation is issuing Polybius Tokens (PLBT) through the smart contract system operated by Ethereum (ref to Annex 1). The funds raised by the sale of tokens will be retained by the Polybius Foundation un�l they will be used. Polybius Foundation is a public registered body with legal responsibili�es and is subject to audits. This will ensure the transparency of opera�ons and the secure custody of the funds. Polybius Token symbol Token name: PLBT Token - Polybius Profit-Share Smart Contract A Polybius Token represents the right to receive a part of distributable profits of Polybius P.I. or Polybius Bank. All tokens in aggregate will have the right to receive 20% of such profits. The Tokens will be assigned pro-rata to the funds provided to the Polybius Foundation during the ICO. Payout Structure: According to the Bylaws, at the end of a financial year, 20%1 of distributable profit of Polybius Payment Institution or Polybius Bank is transferred to the specific Ethereum (ETH) wallet. The ETH is then redistributed to all holders of Polybius tokens according to smart contract condi�ons (i.e. the stake of profit is received pro-rata the share of tokens owned). Token supply: The total supply is not locked, as we will need to be able to add tokens before the end of sale and revoke the unsold amount. Ini�al Rate: Price per token is locked on 10 USD per 1 Token. 1 May be adjusted in accordance with clause 18 Round A Conversion as outlined in the Terms and Conditions The tokens have not been and will not be registered under the United States Securi�es Act of 1933, as amended (the “Securi�es Act”), and may not be offered or sold in the United States or to or for the benefit of US persons (as defined in Regula�on S under the Securi�es Act) unless they are so registered, or an exemp�on from the registra�on requirements of the Securi�es Act is available. One such exemp�on allows the resale of tokens purchased for their own account and for investment purposes only by investors who (i) are not otherwise affiliated with the Polybius Founda�on, (ii) have been exposed for some �me to the economic risks that ownership of tokens entails, and (iii) are not part of the distribu�on of the tokens. Polybius Prospectus 3

ICO structure The tokens have not been and will not be registered under the United States Securi�es Act of 1933, as amended (the “Securi�es Act”), and may not be offered or sold in the United States or to or for the benefit of US persons (as defined in Regula�on S under the Securi�es Act) unless they are so registered, or an exemp�on from the registra�on requirements of the Securi�es Act is available. One such exemp�on allows the resale of tokens purchased for their own account and for investment purposes only by investors who (i) are not otherwise affiliated with the Polybius Founda�on, (ii) have been exposed for some �me to the economic risks that ownership of tokens entails, and (iii) are not part of the distribu�on of the tokens. Polybius Prospectus 4

ICO structure Token Distribu�on: • Distributed to users - 93%; • Founders - 5%; • Boun�es - 2%. Bonuses: • Day 1 – 25% token bonus; • Day 2-7 – 20% token bonus; • Week 2 – 15% token bonus; • Week 3 – 10% token bonus; • Week 4 – 5% token bonus; • Week 5 – 0% token bonus. Boun�es: • Facebook campaign – 10.00% of bounty pool; • Twi�er campaign – 10.00% of bounty pool; • Bitcointalk signature campaign – 15.00% of bounty pool; • Polybius thread support – 10.00% of bounty pool; • Bitcointalk transla�on campaign – 15.00 of bounty pool; • Exclusive support – 40.00% of bounty pool. Boun�es are provided a�er the crowdsale ends. At the end of the crowdsale all sold tokens are considered to be 93% of the total supply. The remaining 7% are then distributed among founders and boun�es receivers according to the informa�on above. The tokens have not been and will not be registered under the United States Securi�es Act of 1933, as amended (the “Securi�es Act”), and may not be offered or sold in the United States or to or for the benefit of US persons (as defined in Regula�on S under the Securi�es Act) unless they are so registered, or an exemp�on from the registra�on requirements of the Securi�es Act is available. One such exemp�on allows the resale of tokens purchased for their own account and for investment purposes only by investors who (i) are not otherwise affiliated with the Polybius Founda�on, (ii) have been exposed for some �me to the economic risks that ownership of tokens entails, and (iii) are not part of the distribu�on of the tokens. Polybius Prospectus 5

Milestone Plan Polybius Milestone Plan The road to crea�ng a bank involves many different aspects, such as licenses, compliances, technologies, consor�a and crea�vity. Below you can see the milestone roadmap that covers the most significant levels of financial ac�vity that we will be achieving with our ICO. Every step milestone is meant to be incremental to the preceding one and to be implemented according to the market response to the proposals. ICO proceeds are intended to be spent mainly, but not exclusively on acquisi�on of licenses, building out the systems, hiring the team and marke�ng. At Polybius Bank or P.I., we will rely on a set of public and private licenses instrumental to comply with many regula�ons, exis�ng in the financial field. Among them are the public EMI and banking licenses, the par�cipa�on in Card Schemes, the crea�on of regula�on-compliant iden�fica�on mechanisms and other technical condi�ons to meet. Every milestone step is an advancement to a broader set of services at Polybius customers' disposal. While our in-house Digital Pass service and technology will serve as a pla�orm at the core of the Polybius Bank or P.I., other features may be developed independently. During this process, the ecosystem will be formed and Digital Pass will start its primary day-to-day opera�ons. As for the customer base, Polybius strategic partners will provide an ini�al base of users for the Polybius Bank or P.I. disposal. We expect access to ca. 500’000 users at incep�on. This will give us a strong base for growth and a quicker path to building revenues and to profitability. The tokens have not been and will not be registered under the United States Securi�es Act of 1933, as amended (the “Securi�es Act”), and may not be offered or sold in the United States or to or for the benefit of US persons (as defined in Regula�on S under the Securi�es Act) unless they are so registered, or an exemp�on from the registra�on requirements of the Securi�es Act is available. One such exemp�on allows the resale of tokens purchased for their own account and for investment purposes only by investors who (i) are not otherwise affiliated with the Polybius Founda�on, (ii) have been exposed for some �me to the economic risks that ownership of tokens entails, and (iii) are not part of the distribu�on of the tokens. Polybius Prospectus 6

Incremental Structure Polybius Bank and Payment Ins�tu�on Incremental Structure The tokens have not been and will not be registered under the United States Securi�es Act of 1933, as amended (the “Securi�es Act”), and may not be offered or sold in the United States or to or for the benefit of US persons (as defined in Regula�on S under the Securi�es Act) unless they are so registered, or an exemp�on from the registra�on requirements of the Securi�es Act is available. One such exemp�on allows the resale of tokens purchased for their own account and for investment purposes only by investors who (i) are not otherwise affiliated with the Polybius Founda�on, (ii) have been exposed for some �me to the economic risks that ownership of tokens entails, and (iii) are not part of the distribu�on of the tokens. Polybius Prospectus 7

API Authorized Payment Ins�tu�on During the ini�al step for a viable Polybius opera�on, a set of condi�ons needs to be met. Among the minimal requirements are licenses (small Electronic Money Ins�tu�on (sEMI) or Payment Ins�tu�on (P.I.) licenses) and mechanisms to comply with the law and financial regula�ons (such as Know Your Customer (KYC), An� Money Laundering (AML), Comba�ng Financing of Terrorism (CFT), etc). At this step, instead of the sEMI license, we, at Polybius, aim to apply for a license for the Polybius Authorized Payment Ins�tu�on (A.P.I.) for the sake of lowering the ini�al investment requirement. A.P.I. license is required to store clients’ money and organize payment processes. The �me required to acquire the license is 3-9 months. At this milestone, Polybius Payment Institution, or Polybius A.P.I., will be legally considered a non-banking financial ins�tu�on (NBFI-ND) and will not take deposits un�l acquisi�on of the banking license. SWIFT membership is also required as one of the key elements for banking procedures. Joining the SWIFT network enables a bank to receive a Business Iden�fier Code (BIC), and to be able to communicate with other financial organiza�ons via SWIFT messages for electronic money transac�ons. It may take up to 3 months for the applica�on to pass through. Polybius Payment Institution will adhere to the EPC Rulebooks to use them in the European payment and messaging network for the Euro zone. The EPC Rulebooks define principles of money transfer in Euro according to the European Union Regulatory Framework. The �me required to join and to operate the EPC Rulebook network is expected to be 6 months. The tokens have not been and will not be registered under the United States Securi�es Act of 1933, as amended (the “Securi�es Act”), and may not be offered or sold in the United States or to or for the benefit of US persons (as defined in Regula�on S under the Securi�es Act) unless they are so registered, or an exemp�on from the registra�on requirements of the Securi�es Act is available. One such exemp�on allows the resale of tokens purchased for their own account and for investment purposes only by investors who (i) are not otherwise affiliated with the Polybius Founda�on, (ii) have been exposed for some �me to the economic risks that ownership of tokens entails, and (iii) are not part of the distribu�on of the tokens. Polybius Prospectus 8

API Compliance with specific rules, laws and regula�ons is of u�er importance in banking environment. A banking ins�tu�on is obliged to set and follow high standards of opera�ons in order to protect its stakeholders. Besides that, the reputa�on of a bank can also be severely damaged by poor processes including KYC and AML/CFT techniques and so�ware. We will use exis�ng tested technologies to comply with the standards and the requirements. In KYC, for example, modern banks are s�ll playing by old rules due to the sensi�ve nature of the procedure importance. Up un�l now, most KYC and AML procedures require front-office presence of a customer. While automa�c biometric devices s�ll have to prove their acceptability, efficiency and security in fully digital banking, players like SEB are evalua�ng op�ons of using Skype for customer verifica�on. P2P loans are a new model in credit systems, which allow organiza�ons to establish a pla�orm that links those looking for loans with those looking for small investments and profit. Such systems are a great way for financial ins�tu�ons that match the lenders with the borrowers to generate a capital-efficient, credit risk free revenue stream on processing (e.g. pla�orm maintenance, customer due diligence, scoring). We see a par�cular opportunity in cross-border P2P lending while most of today’s pla�orms are locked into a single jurisdic�on. According to researches done by Deloitte, the Compound Average Growth Rate (CAGR) of the market is over 104% in the period from 2011 to 2015, with almost double the growth during the period from 2014 to 2015. Studies also suggest that by 2021 the total P2P loan market will be over $500 billion, with European marking being over $35 billion. However, as all traction is to be created by customers, Polybius aims to set high standards to ensure the security of the procedure and comfort of all parties involved. This means that our P2P loan platform may also adopt scoring and convenient authentication mechanisms to make the bid/offer phase transparent and trustworthy, as well as being competitive and compliant with the regulations. Investment features for Polybius Payment Institution customers will include crea�ng investment por�olios, managed by a Polybius strategic partner company. The por�olios are meant to be an investment product with a customizable risk/liquidity profiles. The role of Polybius P.I. will likely be limited to a referral and funds transfer payment agent to the said strategic partner. The tokens have not been and will not be registered under the United States Securi�es Act of 1933, as amended (the “Securi�es Act”), and may not be offered or sold in the United States or to or for the benefit of US persons (as defined in Regula�on S under the Securi�es Act) unless they are so registered, or an exemp�on from the registra�on requirements of the Securi�es Act is available. One such exemp�on allows the resale of tokens purchased for their own account and for investment purposes only by investors who (i) are not otherwise affiliated with the Polybius Founda�on, (ii) have been exposed for some �me to the economic risks that ownership of tokens entails, and (iii) are not part of the distribu�on of the tokens. Polybius Prospectus 9

EMI Electronic Money Ins�tu�on Upon reaching our second milestone, Polybius will be eligible to qualify for a broader range of instruments that will increase the financial services offered reaching more sophis�cated and func�onal banking. At this stage, Polybius complete Electronic Money Ins�tu�on (EMI) license will allow us to issue electronic money – something we would not be able to do with a limited P.I. license. According to the article 2.2 from directive 2009/110/EC of the European Parliament and Council, “electronic money” means “electronically, including magnetically, stored monetary value as represented by a claim on the issuer which is issued on receipt of funds for the purpose of making payment transactions […], and which is accepted by a natural or legal person other than the electronic money issuer”. In XIX century, gold was used as money. In XX century, we moved on to cash for both historical and prac�cal reasons. In XXI, money went digital, and it was rare to meet a person with a bank account not holding a debit card. For a bank to have the right to issue cards, it must either apply for a card scheme membership (like MasterCard, Visa or American Express), or join an already exis�ng member of a scheme, namely BIN Principal Member A BIN Principal Member will issue the cards for Polybius and will be communica�ng with schemes on our behalf, taking fees for processing. Not only do bank clients need to send money, but they also need to receive it, whether to their personal or corporate accounts. A BIN Principal Member is also responsible for money acquiring, crea�ng a seamless both-end payment transac�on service. It may be required to have a “prefunding account” on the side of a BIN Principal Member and it might take up to 6 months for nego�a�ons and final agreement. The tokens have not been and will not be registered under the United States Securi�es Act of 1933, as amended (the “Securi�es Act”), and may not be offered or sold in the United States or to or for the benefit of US persons (as defined in Regula�on S under the Securi�es Act) unless they are so registered, or an exemp�on from the registra�on requirements of the Securi�es Act is available. One such exemp�on allows the resale of tokens purchased for their own account and for investment purposes only by investors who (i) are not otherwise affiliated with the Polybius Founda�on, (ii) have been exposed for some �me to the economic risks that ownership of tokens entails, and (iii) are not part of the distribu�on of the tokens. Polybius Prospectus 10

EMI At this milestone, Polybius Payment Institution will likely implement currency exchange services, allowing corporate customers to keep a variety of currencies inside a single bank account, exchanging them at their discre�on and making payments with less spending and vola�lity risks. The deployment of the exchange may take up to 3 months. By being in the middle of an online financial transac�on we expect to gather a lot of insight into consumer's behavioural pa�ern as well as income and liability profile. This will drive our scoring models allowing to offer loans. We expect these loans to be extended predominantly to finance purchases from online merchants we'll be working with. This will enhance the value of the mem- bership of Polybius–Digital Pass biosphere through driving the sales for our merchants and providing a differen�ated offering for the consumers. Last but not least, it will also be beneficial to Polybius as we will maximize our return on investment by supplemen�ng interest income with the consequen�al transac�on revenues. Similarly to our consumers, we would like to be in a posi�on to offer financing to our merchants. This will most likely take the shape of working capital financing whereby we could either (a) finance their stock or (b) allow them to provide consumer financing by extending them a loan to bridge a receivable. Par�cularly in the case of receivable financing, our deal appe�te will likely be driven by the credit scoring as well as the merchant's trade volume through Polybius. Such posi- �ve reinforcement will encourage the transac�ons through our pla�orm and drive value for all Polybius stakeholders. The tokens have not been and will not be registered under the United States Securi�es Act of 1933, as amended (the “Securi�es Act”), and may not be offered or sold in the United States or to or for the benefit of US persons (as defined in Regula�on S under the Securi�es Act) unless they are so registered, or an exemp�on from the registra�on requirements of the Securi�es Act is available. One such exemp�on allows the resale of tokens purchased for their own account and for investment purposes only by investors who (i) are not otherwise affiliated with the Polybius Founda�on, (ii) have been exposed for some �me to the economic risks that ownership of tokens entails, and (iii) are not part of the distribu�on of the tokens. Polybius Prospectus 11

Commercial Bank The strategy upon reaching this milestone greatly advances, and so do Polybius ambi�ons and requirements. At this stage, Polybius will be eligible to reach the poten�al of a fully func�onal bank with a complete set of features. Along with classical banking services, Polybius Bank will deliver applica�ons and instruments required in the market. Our aim is to provide Banking as a Service, more commonly known as BaaS. But before the development of APIs, Polybius may apply for a card scheme (Visa/MasterCard) Principal Member License. With such membership, no BIN sponsors would be required for card issuing, simplifying the card payment processing and reducing the costs. The licenses allow card issuing in all European countries. It may take up to 6 months to receive the membership. At the same �me, Polybius will rally to become a bank, applying for an all-inclusive banking license. This is one of the most serious licenses and requires Polybius to undergo many lengthy audit sessions. The process may take up to 2 years, but as a result Polybius will be authorized to provide deposit services, issue debit and credit cards and offer savings accounts (e.g. re�rement savings). The digitaliza�on of commerce is the ul�mate requirement for modern merchants to stay compe��ve across the market. This, however, makes the merchants dependent on third party payment service providers to issue the services and the infrastructure for payment ini�a�on and account informa�on services. The offering of a classical bank is o�en regarded as limited and inflexible. We therefore see a significant opportunity to gain strong market share across electronic merchants by offering a nimble solu�on. The tokens have not been and will not be registered under the United States Securi�es Act of 1933, as amended (the “Securi�es Act”), and may not be offered or sold in the United States or to or for the benefit of US persons (as defined in Regula�on S under the Securi�es Act) unless they are so registered, or an exemp�on from the registra�on requirements of the Securi�es Act is available. One such exemp�on allows the resale of tokens purchased for their own account and for investment purposes only by investors who (i) are not otherwise affiliated with the Polybius Founda�on, (ii) have been exposed for some �me to the economic risks that ownership of tokens entails, and (iii) are not part of the distribu�on of the tokens. Polybius Prospectus 12

Commercial Bank With the PSD2 in place, banks will have to adapt and offer just the specific services required for e-Commerce, as well as provide tools for TPPs which will come with help of new direc�ves. The mission of Polybius Bank is to not only provide the Account Servicing Payment Service Provider (ASPSP) services on an open pla�orm for merchants, but to also make sure that the implementa�on and integra�on of such services comes seamlessly through the role of Polybius as a TPP, i.e. Account Informa�on Service Provider (AISP) and Payment Ini�a�on Service Provider (PISP) pla�orms in the frame of the PSD2. The tokens have not been and will not be registered under the United States Securi�es Act of 1933, as amended (the “Securi�es Act”), and may not be offered or sold in the United States or to or for the benefit of US persons (as defined in Regula�on S under the Securi�es Act) unless they are so registered, or an exemp�on from the registra�on requirements of the Securi�es Act is available. One such exemp�on allows the resale of tokens purchased for their own account and for investment purposes only by investors who (i) are not otherwise affiliated with the Polybius Founda�on, (ii) have been exposed for some �me to the economic risks that ownership of tokens entails, and (iii) are not part of the distribu�on of the tokens. Polybius Prospectus 13

Digital Pass The infrastructure of Polybius Bank project will rely on reputable exis�ng core solu�ons along with technologies meant to digi�ze and automate opera�ons and communica�on. Digital Pass, the product of our development, is a standalone technology and service aimed to standardize system-to-system communica�on, and enable trust through the integrity of records. It is designed to facilitate individuals and businesses to get access to, and to keep encrypted personal & corporate data in a privately accessible decentralized ledger. The data will later be used in a secure, open and non-discriminatory manner to increase the scope of Polybius Bank or P.I. procedures, as well as to build an ecosystem for businesses in strict accordance to regula�ons issued by the European Parliament and outlined by the European Commission. Digital Pass employs the experience of the trusted and field-tested Estonian e-Residency iden�fica�on system and its uses. The main principles of security, adapta�on and poten�al appliance are outlined below: Protec�on of personal data The first and most important aspect of Digital Pass features is related to the processing and storage of data referable to the personal iden�fica�on (sensi�ve), as well as anonymous and pseudonymous informa�on. The classifica�on, storage, analysis, processing and accessibility of data will be compliant to the direc�ves set by European Commission, i.e. the General Data Protec�on Regula�on (GDPR) and others. Decentralised Ledger Technologies Due to the cri�cal importance of informa�on security, the data requires an undeniable, highly secure and redundant storage environment that will also allow private access to and exchange of informa�on between Polybius Bank or P.I., its customers, trusted en��es and law organisa�ons. Being compliant with the European Union direc�ves and regula�ons, Emer blockchain technology will be adopted as a basis for further development. Among its key features, Emer offers mul�-level permission-based access to data via SSL cer�ficates. En��es and organiza�ons using the trusted environment may include, but are not limited to: financial, health and government ins�tu�ons along with trust-businesses. The access to data entered and retained in the trusted environment will be provided on the individual’s discre�on or by a request from legal authori�es. While the Emer blockchain stays as a trustable environment for data storage and access to services and entries is covered by independent so�ware solu�ons (such as the Authorizer), there are other DLTs (such as the Tangle) that are designed to allow an efficient transfer of low batches of data. This is a tool useful in processing data generated or required by small IoT devices. The tokens have not been and will not be registered under the United States Securi�es Act of 1933, as amended (the “Securi�es Act”), and may not be offered or sold in the United States or to or for the benefit of US persons (as defined in Regula�on S under the Securi�es Act) unless they are so registered, or an exemp�on from the registra�on requirements of the Securi�es Act is available. One such exemp�on allows the resale of tokens purchased for their own account and for investment purposes only by investors who (i) are not otherwise affiliated with the Polybius Founda�on, (ii) have been exposed for some �me to the economic risks that ownership of tokens entails, and (iii) are not part of the distribu�on of the tokens. Polybius Prospectus 14

Digital Pass Internet of Things With the expansion of smart devices, smart cars and smart houses, more types of transac�ons will eventually appear. For the IoT to func�on seamlessly, specific standards of micropayment processing and message delivery have to be adopted for convenient M2M communica�ons and billing. While not being a focus area at the earliest stages of development, the poten�al and the requirements of the field is the reason to keep it in mind. As the technology starts to gain mass recogni�on and adop�on, Polybius Bank or P.I. will look forward to develop and provide instrumental payment services based, or employing currently exis�ng solu�ons. Big Data Digital Pass is designed to collect and store a handful of data, which will be used to enable individuals and en��es to receive both high quality services and informa�on about the Market in general. The informa�on may be anonymously collected by trusted, licensed and regulated en��es and then processed, providing regional data regarding the requirements of local industry. The data may also be used for the development of new procedures or services required in different areas of human life. Due to the sensi�ve nature of the data stored in Digital Pass, such analysis will be done in the strictest regulatory confidence and in full compliance with European regula�ons. Applied AI Although in its infancy, ar�ficial intelligence is already used as a tool of data analysis. Weak AI or Narrow AI is complex combina�on of algorithms able to analyze big clusters of data and give "answers" accordingly to preset logic. In financial environment, such tool is used in scoring and sensi�vity systems. To remove any chance of private selfishness in the processing of sensi�ve informa�on, and to increase trust between customers, trusted en��es and Digital Pass, it is crucial to ensure the correct usage of data. Along with the development of Polybius Bank or P.I. and related services, the overall capacity, opera�onal speed and costs will be improved with the implementa�on of applied AI solu�ons within the Digital Pass and other func�onal features. For backers and Polybius Bank The real value of Digital Pass lies not only within its design principles, but also within the scope of recent regula�ons set forth in the European Union to advance the European Single Market. By following the latest regula�ons, financial ins�tu�ons and merchants will require secure digital iden�fica�on, authen�ca�on and authoriza�on tools to provide their customers an entry point in the Digital Single Market. Digital Pass is the solu�on to sa�sfy compliance with the eIDAS Regula�on and may generate revenue on its related services, e.g. data processing and analysis. Our ini�al goal is to create a single cross-European credit scoring system together with our strategic partners who are among the leaders in the credit industry in Europe. Those en��es interested in using the features and tools provided by Digital Pass will be subject to royalty and maintenance fees as to ensure the validity and con�nuity of the service as well as profitability. The tokens have not been and will not be registered under the United States Securi�es Act of 1933, as amended (the “Securi�es Act”), and may not be offered or sold in the United States or to or for the benefit of US persons (as defined in Regula�on S under the Securi�es Act) unless they are so registered, or an exemp�on from the registra�on requirements of the Securi�es Act is available. One such exemp�on allows the resale of tokens purchased for their own account and for investment purposes only by investors who (i) are not otherwise affiliated with the Polybius Founda�on, (ii) have been exposed for some �me to the economic risks that ownership of tokens entails, and (iii) are not part of the distribu�on of the tokens. Polybius Prospectus 15

Digital Pass Basic technical principles of opera�on: Digital Pass combines user SSL cer�ficates, blockchain-based infocards and a widely acceptable OAuth2 technology. Current methodology of registra�on is the following: 1. User creates an infocard with private informa�on (name, address, contact details), encrypts it and sends it over to the ledger; 2. User generates a SSL cer�ficate including the infocard data, sends the info to ledger and adds the *.p12 file to the browser; 3. User authorizes on the Digital Pass website using a cer�ficate in the dashboard. User can also use other means of authoriza�on such as an ID card, a bank or a governmental services website. If the infocard data corresponds to data from other sources, the user is considered valid. In any other case the data is verified by a moderator. This is a way to connect a user cer�ficate with real user data; 4. Implementa�on of Digital Pass into websites (banks, exchanges, merchants, etc) is done via the standard OAuth2 protocol. An illustrative use case example for a credit organization (CO): 1. User presses "authorize via Digital Pass" on a CO website; 2. The CO website redirects the user to Digital Pass website, where it authorizes using own SSL cer�ficate, receiving a User Authoriza�on Token; 3. By a following Digital Pass request, a CO website receives user's infocard data along with verifica�on data, for example: {verified=true;verified_type:id_card} 4. Next, a CO provides a loan to a user, informing Digital Pass without disclosing any of the user's PII. 5. Digital Pass publishes a blockchain entry with such parameters as: name: credit_info:SSL-id value: credit_org = "Credit Organisation Name" credit_summ = "Loan amount" credit_expiration = "Loan expiration date" The tokens have not been and will not be registered under the United States Securi�es Act of 1933, as amended (the “Securi�es Act”), and may not be offered or sold in the United States or to or for the benefit of US persons (as defined in Regula�on S under the Securi�es Act) unless they are so registered, or an exemp�on from the registra�on requirements of the Securi�es Act is available. One such exemp�on allows the resale of tokens purchased for their own account and for investment purposes only by investors who (i) are not otherwise affiliated with the Polybius Founda�on, (ii) have been exposed for some �me to the economic risks that ownership of tokens entails, and (iii) are not part of the distribu�on of the tokens. Polybius Prospectus 16

Financial Marketplace Small and Medium Enterprise Financial Marketplace The Financial Marketplace will be the environment for fintech companies and financial experts to present and provide the services and technologies as the product of their exper�se and develop- ment. There is a reason for such solu�ons to be in high demand - many small and medium enter- prises o�en require addi�onal tools for their business to be successful and convenient, and the market will be especially ready for such tools in the scope of the PSD2. Venture capital, seed and angel investors also require pla�orms for their daily opera�ons, so with the development of the Digital Pass analysis & scoring technologies accompanied by fintech solu�ons we foresee the employment of such pla�orms and instruments in the marketplace as well. The tools will vary by purpose and mechanics, ranging from tradi�onal single market analysis instruments to cu�ng-edge financial aggrega�on pla�orms for loan, brokerage, insurance and investment needs. e-Commerce & m-Commerce services along with online merchants have to rely on third party processors to cover their money remi�ance, compliance or logis�cs requirements. Polybius Financial Marketplace will be designed to connect the developers and the consumers of such technologies. Decentralized Autonomous Organisa�ons or DAOs can be considered a new tool for Venture Capi- tal investors as it provides secure funding mechanics using smart DLT contracts. Same mechanisms of smart contracts and DAO tokens can also be employed in development of smart crowdfunding pla�orms. The Ini�al Coin Offering (ICO) itself is an example of a tool for the Polybius Financial Marketplace. With data collected in Digital Pass and analysed by third party scoring and sensi�vity systems, the marketplace will a�ract insurance companies, credit agencies and those willing to provide access to their informa�on. We believe that companies working with financial risks would benefit from having a greater data input and therefore a be�er analy�cal output due to higher scoring preci- sion. For the customers, it will mean that such services will be able to provide lower-than-usual prices for services to compliment the readiness of individuals to share their data and ensure the financial and opera�onal safety. Foreign exchange can be more than just a tool for interna�onal money remi�ance – it can become a trading pla�orm. Corporate and individual brokers will be able to provide their services or tech- nologies within the marketplace, while big and medium investors will access the database of startups and established companies in need of venture capital. The tokens have not been and will not be registered under the United States Securi�es Act of 1933, as amended (the “Securi�es Act”), and may not be offered or sold in the United States or to or for the benefit of US persons (as defined in Regula�on S under the Securi�es Act) unless they are so registered, or an exemp�on from the registra�on requirements of the Securi�es Act is available. One such exemp�on allows the resale of tokens purchased for their own account and for investment purposes only by investors who (i) are not otherwise affiliated with the Polybius Founda�on, (ii) have been exposed for some �me to the economic risks that ownership of tokens entails, and (iii) are not part of the distribu�on of the tokens. Polybius Prospectus 17

Core Team The Polybius project is driven by a number of expert groups of with common vision. Below is a list of the core day-to-day team at this stage. These are ac�vely involved in the key strategic decisions, project planning and development. The team is regularly drawing on the exper�se of the deep bench of the advisors affiliated with the project. Addi�onal tech and finance professionals have commi�ed to join the project upon ICO closing. They are not yet ac�vely involved nor listed below due to their arrangements with current employers and conflicts of interest. Sergei Potapenko Polybius’ vision and inspira�on CEO and co-founder, HashCoins OÜ Sergei is a seasoned execu�ve with a rich team building and leadership experience. Out of his 11 year work experience, he had spent 4 working with Blockchain technologies and over 7 years in managing posi�ons across several interna�onal trading enterprises. With main focus on engineering and business administra�on, Sergei has a deep percep�on and understanding of the direc�ons of modern technological development and capabili�es. Sergei is a pragma�c professional driving the project execu�on, making the Polybius vision a reality. Ivan Zahharenko, MBA Polybius’ financial products Independent financial advisor Ivan has 10 years of finance industry experience, having worked with both corporate and private clients within Swedbank and Citadelbank. He has held the posi�ons of Corporate Business Development Director at Expobank AS, Senior Private Banker at Bal�kums Banks and Private banker at Parex Bank. Ivan excels in partner rela�ons and also holds an MBA in economics. His clients have praised him for his ability to make quick and ra�onal decisions, priori�sing on the delivery. Ivan Turygin Polybius Business Development Chairman of the Board, HashCoins OÜ With a decade of interna�onal entrepreneurship experience and several successful businesses across the EU, Ivan is responsible for con�nual ac�vi�es of the companies and its projects. He studied Manufacturing Technology and Finance, Banking & Business Administra�on at the Tallinn University of Technology. This ul�mately led him to inves�ng in Tech projects, among which is HashFlare and Polybius. The tokens have not been and will not be registered under the United States Securi�es Act of 1933, as amended (the “Securi�es Act”), and may not be offered or sold in the United States or to or for the benefit of US persons (as defined in Regula�on S under the Securi�es Act) unless they are so registered, or an exemp�on from the registra�on requirements of the Securi�es Act is available. One such exemp�on allows the resale of tokens purchased for their own account and for investment purposes only by investors who (i) are not otherwise affiliated with the Polybius Founda�on, (ii) have been exposed for some �me to the economic risks that ownership of tokens entails, and (iii) are not part of the distribu�on of the tokens. Polybius Prospectus 18

Core Team Nikolay Pavlovskiy Polybius Technology CTO, HashCoins OÜ Nikolay is a physicist by background. He had spent the first five years of his professional career working at “Fakel” construc�on bureau in Kaliningrad as a research engineer. He relocated to Estonia in 2010 and joined HashCoins in 2014. Aside from his CTO responsibili�es at HashCoins, he is one of the drivers behind Emercoin advancement team. Vitali Pavlov Polybius DigitalPass Lead Chief Product Officer, HashCoins OÜ Vitali has a background in cyberne�cs and compu�ng, holding a masters degree from Tallinn Technical University. He’s held a variety of posi�ons in tech companies, most recently the CEO of DonateIT before joining HashCoins. Vitali is also one of the founding members of The Estonian Cryptomoney Union, a non-profit organiza�on focusing on popularizing cryptocurrency and related technology. Edgar Bers Polybius Communica�on Product Development & Communications, HashCoins OÜ Edgar’s educa�onal background spans across linguis�cs and psychology. His most recent professional background, before joining HashCoins, was in Distribu�on Management at Top Connect, telecom solu�on provider. Edgar is an avid blockchain and cryptocurrency enthusiast, he has presented at a numerous technological conferences and other public forums. The tokens have not been and will not be registered under the United States Securi�es Act of 1933, as amended (the “Securi�es Act”), and may not be offered or sold in the United States or to or for the benefit of US persons (as defined in Regula�on S under the Securi�es Act) unless they are so registered, or an exemp�on from the registra�on requirements of the Securi�es Act is available. One such exemp�on allows the resale of tokens purchased for their own account and for investment purposes only by investors who (i) are not otherwise affiliated with the Polybius Founda�on, (ii) have been exposed for some �me to the economic risks that ownership of tokens entails, and (iii) are not part of the distribu�on of the tokens. Polybius Prospectus 19

Regulations Due to the sensi�ve nature of banking business and PII processing, here is the (indica�ve, non-exhaus�ve) list of standards, regula�ons and legisla�ons we will to comply with: 1. ISO/IEC 27000 family of standards – defines requirements for PII storage, processing and distribu�on. More details can be found on the official website of the organisa�on; 2. GDPR – the General Data Processing Regula�on specifies the core principles of working with the PII. The full descrip�on of the direc�ve can be found on the official website, while a shorter version can be reviewed here. The most recent publica�on by the European Commission can be found here; 3. eIDAS – a set of standards for eID and Trust Services for electronic transac�ons in the European Single Market. The informa�on regarding specifica�ons are published on the official website of the European Commission; 4. ISO 20022 – a standard of communica�on and messaging between financial en��es. Its purpose is to reduce "misunderstanding" in general terms by crea�ng a unified dic�onary for businesses. For more informa�on, visit the official website of SWIFT or the official website of the ISO itself; 5. PSD 1 & PSD 2 – the direc�ves that are set by the European Commission to regulate payment services within the European Union. These direc�ves, among other things, are meant to improve security and customer protec�on and can be viewed in greater detail on the official website of the European Commission; 6. SEPA regulations – meant to set an outline of rules and condi�ons for cashless payment within the EU, has its legal basis outlined in PSD 1. More informa�on can be reviewed on the official website; 7. AML/CFT legislation – a list of principles meant for or An�-Money Laundering and Countering the Financing of Terrorism. More informa�on about specific regula�ons is available here and here, while other informa�on can be found on the official website of the European Banking Authority. It is also important to keep in mind that most direc�ves are applicable for the EU zone only. During the company's expansion period, appropriate regula�ons will also be met accordingly to jurisdic�ons. The tokens have not been and will not be registered under the United States Securi�es Act of 1933, as amended (the “Securi�es Act”), and may not be offered or sold in the United States or to or for the benefit of US persons (as defined in Regula�on S under the Securi�es Act) unless they are so registered, or an exemp�on from the registra�on requirements of the Securi�es Act is available. One such exemp�on allows the resale of tokens purchased for their own account and for investment purposes only by investors who (i) are not otherwise affiliated with the Polybius Founda�on, (ii) have been exposed for some �me to the economic risks that ownership of tokens entails, and (iii) are not part of the distribu�on of the tokens. Polybius Prospectus 20

Appendix 1 Appendix 1: Preliminary Organiza�onal Chart and Key En��es The tokens have not been and will not be registered under the United States Securi�es Act of 1933, as amended (the “Securi�es Act”), and may not be offered or sold in the United States or to or for the benefit of US persons (as defined in Regula�on S under the Securi�es Act) unless they are so registered, or an exemp�on from the registra�on requirements of the Securi�es Act is available. One such exemp�on allows the resale of tokens purchased for their own account and for investment purposes only by investors who (i) are not otherwise affiliated with the Polybius Founda�on, (ii) have been exposed for some �me to the economic risks that ownership of tokens entails, and (iii) are not part of the distribu�on of the tokens. Polybius Prospectus 21

Appendix 1 Polybius Foundation is a financial company, established in 2017 and registered in Estonia with the main office located in Tallinn, Estonia. The main focus area of the Founda�on is outlining and execu�ng the projects behind or related to the Polybius infrastructure; selling Polybius Tokens to cover Polybius products; execu�on of PolyTrust Trustee services; product development of the PolyID pla�orm and promo�on of Polybius Bank project. Polybius Foundation will be the trustee promoter and holder of licenses for Polybius Bank, PolyTrust, and PolyID, and is legally accountable for PolyTrust trustee services. Polybius Token or PLBT is a profit-share smart contract. The token is issued within an eToken contract and is wri�en using Solidity programming language by Ambisafe company. The system architecture is outlined in a dedicated document. PolyID – has (or will have) the op�on of being an eIDAS compliant func�on, as an eID Scheme authorised as a valid European eID and owned by Polybius Founda�on. PolyID func�on is to authen�cate individuals as valid customers of Polybius Bank or P.I. and to provide access as users of the Digital Pass and PolyTrust services. PolyTrust – eIDAS compliant Trustee Service ac�ng on behalf of customers authen�cated by the PolyID eIDAS compliant func�on, allowing access and storage of cri�cal data (such as related to finance or health). PolyTrust is owned by Polybius Founda�on. HashCoins OÜ is an IT company, registered and established in 2013 in Estonia headquartered in Tallinn. The main focus areas of the company are development of authen�ca�on and security systems; crea�on of decentralised and distributed ledger (DLT) solu�ons; and provision of cloud compu�ng services. HashCoins OÜ will ini�ally be the servicer and the provider of cloud and DLT storage, security, servicing and redundancy solu�ons for Polybius infrastructure including the Digital Pass services. Digital Pass is the codename for an environment encompassing Polybius eIDAS compa�ble iden�fica�on and authen�ca�on of its users and authoriza�on of payment and other services implemented into the service proposals of Polybius Bank or P.I. The tokens have not been and will not be registered under the United States Securi�es Act of 1933, as amended (the “Securi�es Act”), and may not be offered or sold in the United States or to or for the benefit of US persons (as defined in Regula�on S under the Securi�es Act) unless they are so registered, or an exemp�on from the registra�on requirements of the Securi�es Act is available. One such exemp�on allows the resale of tokens purchased for their own account and for investment purposes only by investors who (i) are not otherwise affiliated with the Polybius Founda�on, (ii) have been exposed for some �me to the economic risks that ownership of tokens entails, and (iii) are not part of the distribu�on of the tokens. Polybius Prospectus 22

Polybius Founda�on OU Company number 14202836 Tartu mnt 43, Tallinn, 10128, Estonia Email: [email protected] Phone: +372 58 738 066