This disclaimer provides important information about S-Assets and the Spondula blockchain. Please read it carefully before using the platform. Capitalised terms not defined here have the meaning given in our Terms of Service.

1. What Are S-Assets?

S-Assets are digital stable assets issued on the Spondula Chain (a private permissioned blockchain built on the Polkadot SDK / Substrate). Each S-Asset is a fungible token issued at 18 decimal places. S-Assets are used within the Spondula ecosystem for peer-to-peer payments, merchant payments via the Payment Gateway, and exchange.

At the effective date of this disclaimer the following S-Assets are supported:

• sUSD — designed to track the US Dollar at 1:1.
• sGBP — designed to track Pound Sterling at 1:1.
• sEUR — designed to track the Euro at 1:1.
• sGOLD — designed to track the price of one gram of gold against the LBMA reference price.
• sBTC — designed to track Bitcoin at a mid-market reference price sourced from public market data.

2. How the Peg Is Maintained

Spondula (or a designated affiliate) is the sole mint and burn authorityfor all S-Assets on-chain. New S-Assets are issued when users buy in through the Payment Gateway or an Operator, and burned when users cash out. The Spondula Pool provides liquidity to keep fiat-tracked S-Assets (sUSD, sGBP, sEUR) redeemable at par and to clear exchange orders between them.

Exchange between fiat-tracked S-Assets happens on-chain via the FX swap pallet. Rates are set by Spondula using external market data feeds (ExchangeRate-API for forex, CoinGecko for BTC and gold) and are published on-chain through the ratebook. A flat 0.2% spread is applied to each swap. Swaps are blocked if the on-chain rate has become stale.

sGOLD and sBTCare not pegged to a fiat currency and do not have a par redemption value. They track a market reference price and their value in fiat will move with that reference. The Spondula Pool does not guarantee buy-back of sGOLD or sBTC — these may be traded peer-to-peer or, where available, exchanged into fiat-tracked S-Assets at the prevailing on-chain rate.

3. S-Assets Are Not Legal Tender

S-Assets are not legal tender, government-backed currency, central bank money, or bank deposits. They are not issued or guaranteed by any central bank or financial authority. No government or regulator has endorsed S-Assets. Spondula is not a bank and does not take deposits.

4. S-Assets Are Not Securities or Investments

S-Assets do not represent equity, debt, or any ownership interest in Spondula or any other entity. Holding S-Assets does not entitle you to dividends, voting rights, a share of profits, or any claim on the Spondula Pool beyond the redemption mechanics described above. S-Assets are utility tokens designed as a medium of exchange within the Spondula ecosystem. Nothing on the Spondula platform is an offer of securities.

5. Non-Custodial Wallet and Key Loss Risk

The Spondula wallet is non-custodial. Your private key and recovery phrase are generated on your device and encrypted with your PIN using AES-256-GCM. Spondula cannot decrypt your recovery phrase. The recovery phrase is the onlymechanism for restoring your wallet if your device is lost or reset.

If you lose your recovery phrase and your PIN, your S-Assets are permanently and unrecoverably lost. No support request, KYC re-verification, or legal process can restore access. We strongly recommend writing your recovery phrase down offline and storing it somewhere safe.

6. Redemption Mechanics

S-Assets are redeemable into local fiat currency through the following routes:

• Bank transfer via the Spondula Payment Gateway, where your KYC tier allows and a same-currency pair is available (e.g. sGBP → GBP).
• Card / bank pay-out via a connected payment partner in supported corridors.
• Operator cash-out — Regional and Local Operators buy S-Assets at the prevailing on-chain rate and settle you in local fiat from their own accounts.

Spondula itself does not hold or disburse fiat. All fiat settlement is carried out by regulated Operators or payment partners, who act as principals and may charge their own fees or spread. Redemption availability, speed, and pricing vary by corridor, Operator liquidity, and your KYC tier. There may be circumstances — including Operator outage, sanctions block, regulatory action, or platform maintenance — in which redemption is temporarily unavailable.

7. De-Peg and Liquidity Risk

While fiat-tracked S-Assets are designed to maintain a 1:1 peg to their reference currency, Spondula does not guarantee this peg at all times. The value of S-Assets depends on:

• The solvency and operational integrity of the Spondula Pool.
• The availability of Operators and payment partners in your corridor.
• Accuracy and timeliness of the reference market-data feeds.
• Market conditions, banking relationships, and regulatory developments.

In stressed conditions you may not be able to redeem S-Assets at par, redemption may be delayed, or the market price at which you can exchange S-Assets peer-to-peer may diverge from the reference rate.

8. Blockchain, Pallet, and Smart-Contract Risk

• Software bugs: the Spondula Chain runs Rust-based Substrate pallets that implement balances, transfers, asset issuance, and the FX swap. Despite testing, runtime code can contain bugs that affect balances or transaction semantics.
• Network disruptions: the chain may experience downtime, forks, runtime upgrades, or performance degradation. Single-validator consensus provides fast finality but is a central point of operational risk.
• Irreversibility: transactions confirmed on the Spondula Chain cannot be reversed. Mistakes in recipient or amount are not recoverable by Spondula.
• RPC access: the chain RPC is publicly reachable; cryptographic signatures are the security model. Loss or compromise of your key means loss or compromise of your funds.
• Integration risk: the wallet, Payment Gateway, and admin panel depend on Firebase, Google Cloud, and third-party data feeds. Failures in those services can affect your ability to transact.

9. sGOLD and sBTC Volatility

sGOLD and sBTC are not pegged to any fiat currency and can lose or gain significant value in short periods. Historic performance of gold or Bitcoin is not indicative of future results. Holding sGOLD or sBTC is not a savings product and is not appropriate for funds you cannot afford to lose. The reference prices used for sGOLD (LBMA) and sBTC (market mid) are updated on a schedule; the on-chain rate you see may lag the live market.

10. Jurisdictional Restrictions

Availability of specific S-Assets, fiat corridors, and Operators varies by country. It is your responsibility to ensure that your use of the platform complies with the laws of your jurisdiction, including any restrictions on holding crypto-assets, foreign currency, or gold-tracked instruments. Spondula does not solicit users in jurisdictions where its services are prohibited and may block access from those jurisdictions.

11. No Deposit Insurance

S-Assets held in your Spondula wallet are not covered by any deposit insurance or investor-compensation scheme, including the UK Financial Services Compensation Scheme (FSCS) or the US Federal Deposit Insurance Corporation (FDIC). Spondula is not a credit institution, e-money institution, or investment firm. In the event of platform failure, Operator default, or de-peg you may lose some or all of the value of your assets.

12. Tax

Holding, exchanging, receiving, or spending S-Assets may have tax consequences under the laws of your country. You are solely responsible for determining and paying any tax due. Spondula does not provide tax advice, does not withhold tax, and does not issue tax statements other than the transaction history available in the app.

13. Not Financial Advice

Nothing on the Spondula platform or in our communications constitutes financial, investment, legal, or tax advice. You should consult appropriate professional advisors before making financial decisions. Spondula is a technology platform, not a financial advisor.

14. Limitation of Liability

To the maximum extent permitted by law, Spondula shall not be liable for any loss of assets, loss of value, or any other damages arising from the use of S-Assets or the Spondula platform, including losses caused by de-peg, Operator default, chain outage, runtime upgrade, regulatory action, or lost keys. See our Terms of Service for full liability provisions.

15. Contact

Questions about S-Assets? Contact legal@spondula.com.