Conflict of Interest Policy
BFinance EOOD implements internal rules and procedures to identify, prevent, manage, and disclose conflicts of interest that may arise in connection with the provision of crypto-asset services. This information is published to ensure transparency for clients and stakeholders and reflects the requirements of Regulation (EU) 2023/1114 on markets in crypto-assets (MiCA), including the rules on conflicts of interest for crypto-asset service providers, as well as the applicable regulatory technical standards.
1. The General Nature of Conflicts of Interest
A conflict of interest may arise when the interests of BFinance EOOD, its managers, employees, related parties, external contractors, or partners conflict with the interests of clients, or when the interests of one client may be prioritized over those of another client.
Conflicts of interest can be actual, potential, or perceived. They may be of a financial or non-financial nature and may arise in connection with the provision of crypto-asset services, internal decision-making, the processing of client requests, the handling of complaints, or relationships with suppliers, outsourcing partners, or entities affiliated with BFinance EOOD.
The Company’s internal policy applies to employees, management, members of the governing body, external contractors, outsourcing partners, and all persons involved in the provision of crypto-asset services.
2. Services, Activities, and Circumstances That May Give Rise to a Conflict of Interest
Conflicts of interest may arise, in particular, in connection with the following services, activities, or circumstances:
(a) The provision of crypto-asset services, including the processing of client requests, transfers, exchanges, storage, administration, or other services, where such services are applicable to the Company’s operations;
(b) Access by employees or key functions to sensitive, confidential, or internal information;
(c) The participation of an employee, manager, or related party in a decision that may have a direct or indirect financial impact on that person;
(d) Personal, family, professional, or financial relationships between an employee of the Company and a client, supplier, contractor, or other partner;
(e) Relationships with external suppliers and outsourcing partners, including when the supplier is a related party or belongs to the same group;
(f) The consideration of complaints filed by persons who were involved in the provision of the service that is the subject of the complaint, or who have a personal, financial, or professional interest in its outcome;
(g) Accepting or offering gifts, benefits, services, or hospitality that could influence the independence and objectivity of employees;
(h) Personal investments, holdings in other companies, or other economic interests in clients, suppliers, competitors, or other parties whose interests may differ from those of BFinance EOOD or its clients.
In such cases, BFinance EOOD acts as a crypto-asset service provider and organizes its operations in a manner that ensures a clear separation of duties, accountability, a distinction between operational and control activities, and the independence of control functions. The Company’s internal rules provide for a transparent organizational structure and effective internal control mechanisms.
3. Nature of Identified Conflicts of Interest
BFinance EOOD identifies and assesses conflicts of interest based on their nature, likelihood of occurrence, and potential impact on clients and the Company.
Examples of situations that may constitute a conflict of interest include:
(a) An employee involved in the approval or servicing of a client with whom he/she has a personal or close relationship;
(b) An employee or manager who has a personal financial interest in the outcome of a service provided or an internal decision;
(c) The use of confidential information obtained in the course of official duties for personal gain or for the benefit of a third party;
(d) Participation in negotiations or decision-making regarding a supplier or contractor in which an employee, manager, or related party has a financial interest;
(e) The consideration of a complaint filed by a person who was involved in the provision of the service that is the subject of the complaint, or who is dependent on the affected person;
(f) The outsourcing of activities under conditions that could affect the interests of clients or the independence of control functions.
The Company’s internal documents expressly provide that, in the case of complaints, a conflict of interest may arise when a person involved in their review has a personal, financial, or professional interest in the outcome; has been involved in providing the service that is the subject of the complaint; is in a hierarchical relationship with an affected person; or has a close relationship with the complainant or an affected employee.
4. Related Risks
Conflicts of interest may give rise to the following risks:
(a) The risk that clients’ interests will not be given top priority;
(b) The risk of unequal treatment of clients;
(c) The risk of unauthorized use or disclosure of confidential information;
(d) The risk of decisions being influenced by personal, financial, or professional interests;
(e) The risk of damaging confidence in the Company and its reputation;
(f) The risk of regulatory noncompliance;
(g) Operational risk, including in cases of insufficient segregation of duties or inadequate controls;
(h) The risk of complaints being handled in an ineffective or biased manner.
According to the internal rules of BFinance EOOD, the existence of a conflict of interest does not automatically preclude a person from performing a specific function; however, when the conflict poses a significant risk and cannot be prevented, mitigated, or managed appropriately, it should be escalated and managed through appropriate measures.
5. Measures to Prevent and Mitigate Conflicts of Interest
BFinance EOOD implements measures commensurate with the nature, scale, and complexity of its operations. These measures include:
(a) An internal policy for avoiding, identifying, managing, and disclosing conflicts of interest;
(b) A clear division of functions, responsibilities, and lines of authority;
(c) The separation between operational functions and control functions;
(d) The compliance function’s involvement in identifying, assessing, and managing conflicts of interest;
(e) A requirement for employees, managers, and related parties to disclose personal, financial, professional, or other interests that could give rise to a conflict;
(f) Restrictions on the use of confidential information for personal gain;
(g) Rules regarding gifts, benefits, and hospitality;
(h) Mechanisms for recusing a person who is in an actual or potential conflict of interest;
(i) The documentation of identified conflicts, their assessment, and the measures taken;
(j) Training and informing employees about the rules regarding conflicts of interest;
(k) The periodic review and updating of internal policies and procedures;
(l) Oversight of outsourcing arrangements, including an assessment of whether they could give rise to material conflicts of interest;
(m) The independent review of complaints and a prohibition against a complaint being reviewed by a person connected to the case.
The internal rules stipulate that, in the event of outsourcing, the Head of the Compliance Department shall identify, assess, and manage conflicts of interest arising from such relationships and propose appropriate measures to the manager when the conflict is material.
6. Disclosure of Conflicts of Interest
When organizational and administrative measures are not sufficient to ensure, with reasonable certainty, that the risk of harm to clients’ interests will be prevented, BFinance EOOD discloses to the client the general nature and sources of the conflict of interest, the associated risks, and the measures taken to mitigate it, prior to providing the relevant service or performing the relevant action.
Disclosure is provided in a clear, precise, and understandable manner so that the client can make an informed decision regarding the service in question.
7. Reporting a Potential Conflict of Interest
Clients, employees, suppliers, or other stakeholders who believe that a conflict of interest has arisen or may arise may notify BFinance EOOD through the Company’s official contact channels.
Each notification is reviewed objectively, in a timely manner, and in compliance with confidentiality requirements. When necessary, the matter is escalated to the Compliance function and/or the governing body.