Virtual Asset Standards
Virtual Asset Standards (VA Standards) for the Backpack Exchange in according with requirements set by the Dubai Virtual Assets Regulatory Authority (VARA).
At Trek Labs Ltd FZE d/b/a Backpack Exchange (Backpack Exchange), we take our regulatory obligations seriously, and as such, we have established a set of VA Standards in accordance with the requirements set out by our regulator, the Dubai Virtual Assets Regulatory Authority (VARA). These Virtual Asset Standards (VA Standards) are designed to ensure that all Virtual Assets (VA) supported by Backpack Exchange meet appropriate regulatory requirements and are suitable for our clients. Our VA Standards are disclosed on our website, and we take all reasonable steps, including relevant due diligence, to ensure that all Virtual Assets we support meet these standards.
Our VA Standards are set forth below.
For any VA to be listed, or remain listed, on the Backpack Exchange:
it must be sufficiently liquid and meet minimum market capitalization and fully diluted value requirements.
it must have clear features, use cases, utility or community interest.
it must not be a “privacy coin” or contain any anonymity features that prevent traceability of transactions.
It must not be predominantly used for money laundering or terrorist financing activities.
it must comply with all laws, regulations, rules and directives applicable to it.
it must not be prohibited by VARA or any other appropriate authorities.
Furthermore, when considering the listing of any VA on, or keeping any VA listed on, the Backpack Exchange;
We will take into consideration any guidance as to the regulatory treatment of a VA by VARA and other appropriate authorities.
We will assess the security and immutability of the underlying DLT protocol, considering factors such as 51% attack likelihood, uptime, frequency and severity of transaction backlogs/ability to make transfers effectively, and any hacks or protocol errors.
We will take into consideration the future development of the VA as communicated by the Issuer and/or relevant developers, whether this exists and to what extent, as well as the content of it.
We will assess any previous instances of price manipulation, as well as the potential susceptibility of price manipulation, considering factors like team and holder concentration, and market liquidity, and any relevant mitigants that could be put in place.
We will assess any potential or actual conflicts of interest, and any relevant mitigants to such conflicts that could be put in place.
We will assess the background of the issuer of the VA, including their experience in the VA sector, any adverse media, and any investigations or claims in relation to fraud, deceit, market manipulation or other illicit behaviour.
We will consider any rights related to the VA, including whether they represent rights to any other assets (such as real world assets or airdrops of other VAs), and the enforceability of those rights.
we will assess the availability of sufficient assets in order that we are able to satisfy any obligation we have with respect to the VA and any relevant VA Activities.
We will, if the VA has an underlying physical market, assess and form an understanding of the underlying physical market and assess whether, and to what extent, the VA in question can have adverse impacts on such a market.
We will, if applicable, review, and periodically review, any terms and conditions for appropriate correlation with any physical market to ensure conformity with standards and practices in that physical market.
We will take into consideration any other factors, benefits and risks we may deem relevant, to our clients and to the exchange.
As part of Backpack Exchange’s VA Listing Policy, VA Standards will all be assessed when any VA is being considered for listing on Backpack Exchange. The information gathered, analysis performed and decision on whether to list will be documented, with such documentation kept on file for eight years and available to VARA upon request.
Similarly, Backpack Exchange reviews listed VAs to ensure they continually meet the VA Standards every six months, or as soon as possible if Backpack Exchange becomes aware of any developments, related to the VA in question, that would potentially result in the VA no longer meeting the VA Standards. The information gathered, analysis performed and any decisions reached on whether the VA remains listed or not will be documented, with such documentation kept on file for eight years and available to VARA upon request.
Backpack Exchange shall regularly, and on an ongoing basis, assess relevant information to ensure that a Virtual Asset that it provides VA Activities in relation to continues to meet its VA Standards. A Virtual Asset that initially meets Backpack Exchange’s VA Standards may no longer fulfil such standards in the event of certain events, such as evidence of market manipulation by the issuer, lack of sufficient assets to satisfy the issuer’s obligations, treatment of a Virtual Asset as a regulated financial instrument by VARA or other appropriate authorities, fraud, or other similar events. In the event that a Virtual Asset no longer meets our VA Standards, we may suspend support for such Virtual Assets. We have necessary operational procedures and controls in place for such suspensions, and we will notify the appropriate regulators as soon as possible after becoming aware of any such issues. We take all necessary steps as directed by regulators to minimise any adverse impact on our clients arising as a result.