Information concerning Crypto-asset Services

Valid 30.10.2026 - 05.11.2026

General description of LHV’s crypto services

AS LHV Pank (LHV) offers its customers the service of holding and managing crypto assets and receiving and transmitting orders. The customer can hold, buy, and sell crypto assets brokered by LHV in LHV’s Mobile and Internet Bank. Orders can be submitted 24/7 and LHV forwards them to foreign partners for execution at the time the crypto markets are open (generally around the clock). In addition to its crypto-asset custody and administration service, LHV may allow staking of certain crypto-assets, provided that the relevant crypto-asset, the Custodian, and LHV’s technical solution support this. Staking is discussed in more detail in the chapter “Crypto-asset Staking”.

LHV does not execute customer orders on its own, nor does it operate the crypto asset trading platform. LHV accepts the customer’s order and forwards it to a third party for execution. LHV does not provide any advice on crypto assets or any crypto asset portfolio management services. All investment decisions are made by the customer. Before trading, make sure you are familiar with the information materials on crypto assets, and understand the nature and risks of crypto assets.
Regulation and licensing

Licensing and supervision
LHV holds a credit institution licence issued on 06/05/2009 by the Management Board of Finantsinspektsioon with decision No. 4.1-1/37 (Sakala 4, 15030 Tallinn; tel. 668 0500; e-mail info@fi.ee; web www.fi.ee). Finantsinspektsioon conducts supervision over the activities of LHV Pank and the protection of customer assets.

MiCA and applicable legislation
LHV provides crypto asset services in accordance with Regulation (EU) 2023/1114 of the European Parliament and of the Council (MiCA) and Estonian legislation. Its customer relations are governed by the laws of the Republic of Estonia.

Type of assets provided
The crypto assets currently offered by LHV are classified as ‘other crypto assets’ (not e-money tokens or asset-based tokens) under the MiCA.

Asset Information
LHV publishes a brief description of each crypto asset being brokered on the respective product page and encourages customers to familiarise themselves with the information materials available (white papers, project websites). A white paper is required under MiCA when a crypto asset is publicly offered or is requested to be admitted to trading. LHV is not an issuer and does not operate the trading platform. LHV refers to the white paper of the issuer/project when possible.

Sustainability indicators
LHV publishes the required sustainability indicators (e.g. climate and environmental impacts of the consensus mechanism) for all the crypto assets that LHV provides on its website.
Risks involved in investing in crypto assets

Crypto assets are high risk assets and are not suitable for everybody. Below, we will highlight the main risks associated with crypto assets:

Volatility (price fluctuations)
Crypto asset prices can fluctuate significantly in a very short period of time – both up and down. The value may experience double-digit or greater percentage changes in a single day. You can lose a large part or even all of the money invested: the preservation or growth of the value of crypto assets is not guaranteed. The price often depends on the confidence and demand of market participants; there may be a lack of intrinsic value or collateral, therefore, in the event of a loss of interest from market participants or due to negative news, the value of an asset can quickly fall even close to zero.

Market and liquidity risk
The crypto market is younger and less regulated than traditional financial markets. The market situation can deteriorate rapidly: a general drop in price or a decrease in trading volumes can make it difficult to sell an asset at the desired time or price. In the absence of liquidity, it may not be possible to find a counterparty quickly or the asset may have to be sold at a significantly lower price. Occasionally, exchange platforms (including the exchanges used by the operators used by LHV) may temporarily suspend trading or limit withdrawals, so it may not be possible to buy or sell crypto assets for a certain period of time. Since the crypto market is relatively dynamic and in a constant development, investors should be prepared to accept some measure of unpredictability. Crypto assets with smaller market capitalisations have an extremely high risk of becoming illiquid. In summary, it can be said that investing in crypto assets is highly risky and the behaviour of the market is unpredictable.

Risks regarding cybersecurity
Holding and trading crypto assets involves significant cybersecurity risks. Platforms, wallets, and exchange platforms are threatened by hacker attacks, data fraud, and other cyber security incidents. LHV implements strict information security measures and its partners use higher level protection, but no system is 100% secure. Be on the lookout for scams (phishing, promises of ‘guaranteed returns’, social media groups providing recommendations on how to place money in crypto assets, influencer recommendations, etc.). Keep the passwords and authentication tools in a safe place, use only the official LHV channels and ensure regular security updates on your devices. Large-scale cyber incidents can result in service interruptions or financial damage.

Legal and regulatory risks
The legal framework is still evolving and may change. The changes may affect your ability to use the crypto asset in the future or impact its value (e.g. prohibitions, taxes, reporting obligations). Some crypto assets may be classified as an instrument in the future, which will entail additional restrictions and obligations. Crypto assets are not covered by the Guarantee Fund’s deposit protection or other similar state guarantees. Although LHV operates under Estonian and European Union legislation, and holds a credit institution license, consumer protection in crypto transactions is limited. If necessary, we recommend that you consult, among other things, a tax advisor or lawyer, and follow the regulator’s (e.g. Finantsinspektsioon’s) instructions.

Product-specific and technological risks
Each crypto asset is unique, and the risks depend on the nature of the project. For example, developers or the community may terminate a project or make unexpected changes. Technology-related risks (such as smart contract or protocol errors) can lead to hacking and asset theft. A fork in the network can generate new tokens or change the rules – LHV follows its policy in such situations to protect the interests of the customer (as a rule, the customer has the right to a proportional participation in new tokens in accordance with the MiCA). LHV or its intermediaries (including managers) may not be able to convey all the events to the customer. Information about a particular crypto asset can be limited or misleading; it may not always be clear what the token is designed for, what provides value, or what are the prospects for success. Crypto assets have no guaranteed return – the possibility of profit always goes hand in hand with the risk of a loss.

General warning
Crypto assets are high-risk instruments. Before making a transaction, you should weigh its financial, legal, and tax-related implications. Invest only the money that you are willing to lose. Past performance does not guarantee future returns. If in doubt, ask for independent advice or refrain from investing.
Suitability / relevance assessment

MiCA does not require a suitability or relevance assessment for the services LHV provides (holding and managing crypto assets and receiving and transmitting orders). The customer suitability assessment applies to the crypto asset advisory and crypto asset portfolio management service, which is not provided by LHV.

Before the first transaction, we may ask you to complete a short risk awareness questionnaire to help you consider:
- the volatility and risks of crypto assets;
- the market structure and trading mechanisms;
- the risks of ensuring the holding of the assets, and their recovery.
If the answers indicate that you do not have sufficient knowledge and experience, we will warn you clearly. However, you decide whether to continue.
Prices, costs, and fees

Transaction fee
A fee is applied to a transaction for the purchase and sale of a crypto asset as a percentage of the transaction amount. This fee is always found in the Price List and is also displayed in the transaction preview. It is a one-time fee – it is charged at the time of the transaction, either added to the purchase amount or deducted from the sale. The transaction fee is calculated in euros and reserved from your account during the transaction.

Holding
Holding crypto assets with LHV is free of charge – there are no separate management fees. Opening and closing an account is also free of charge. The only fee is a 0.5% transaction fee; there are no permanent or recurring fees. If you use staking, additional staking fees or reward distribution rules may apply, as described in the chapter “Crypto-asset Staking” and in the LHV price list.

Transparency
When confirming the transaction, we will always display both the price quote for the crypto asset and the service fee on a separate line.

Currency and limits
- Transactions are made in euros; sales revenue is credited to your account in euros.
- Minimum amounts: purchase EUR 20, sale EUR 10.
- Maximum transaction amount: EUR 100,000 per transaction.
- LHV may impose additional limits on the number or volume of transactions due to security or regulatory restrictions; we will notify you prior to the transaction.
Settlement in money
To purchase crypto assets, your LHV account must have a sufficient balance in euros. In the case of a purchase, the amount together with the service fee will be debited immediately; in the event of a sale, your account will be credited with the euros received from the sale, from which the service fee has been deducted.

The transfer of euros to the account for the purchase and the withdrawal of the euros received from the sale takes place in the form of standard bank payments – transfers within LHV are free of charge, payments to other banks are based on LHV’s price list.

Price list
LHV’s price list is publicly available and includes up-to-date information on crypto transaction fees. In accordance with legislation, LHV notifies its customers in advance about changes to the price list.
Rules for handling orders

How we handle orders
When a customer submits a crypto asset order at LHV, it is immediately transmitted to the respective platform (manager) for execution. There is no manual intervention or internal trading at LHV. LHV does not consolidate customer orders or wait for a ‘better price’. Each order is transmitted correctly and without delay.

Referral benefits
LHV does not receive compensation for directing orders to a specific platform, and information on unfulfilled customer orders is not misused.

Types of orders
Our customers can make market and limit price orders. A market price order will be executed against the liquidity available on the platform at the best possible price at the moment; a limit price order will be executed at the price you specify or at a better price, depending on the liquidity and time advantage of the platform. Unexecuted limit price orders can be cancelled. In the case of limit price orders, the customer prioritises price over immediate execution of the order and it may remain unsettled if the price does not reach the specified level. In the case of market price orders, the customer must take into account that for low-liquidity crypto assets, their order may negatively affect their execution price.

Rules for the ‘best execution’ of orders
Since LHV only transmits orders and does not carry them out itself, LHV is not bound by the obligation to develop a best settlement procedure; however, it monitors its transmission process and its partners to ensure reliability and quality of service. The price is formed and the quality of the settlement determined based on the rules of the partner’s platform. In some transactions, LHV’s partners may be counterparties to the transaction themselves. LHV regularly assesses whether the partners meet the established criteria and adhere to the best execution rules.

Partners used by LHV
- Bitstamp Europe S.A.
- Coinbase Luxembourg, S.A.
- Coinbase Ireland Limited
Conflicts of interests

In providing crypto services, LHV shall act honestly, fairly, and professionally in accordance with the best interests of its customers. However, situations may arise where the interests of LHV conflict with the interests of customers or where the interests of different customers conflict with each other.

This section describes the main potential conflicts of interest and how they may affect the customer.

Conflicts of interest related to the holding and management of crypto assets
- LHV may hold customers’ assets in collective wallets (omnibus wallets) or through third parties or custodians associated with LHV, which may bring economic or operational benefits to LHV.
- In the event of forks, airdrops, protocol changes or similar events, LHV may decide at its own discretion whether and how to support, transfer to the customer’s account, sell or store the resulting assets; this may create financial advantages for LHV.
Conflicts of interest in receiving and transmitting orders
- LHV employees may have personal crypto asset positions that may generate incentives that are not in line with the interests of the customers.
- LHV as the receiver and transmitter of crypto asset orders on behalf of the customer, does not receive any fee, discount or non-monetary reward for the referral of orders received from its customers to a specific crypto asset trading platform or other crypto service provider.
Common conflicts of interests
- LHV may use the transaction history or information about the customer’s crypto assets to develop products, pricing strategies or business partnerships that benefit LHV.
- Customers may have conflicting interests regarding the timing, pricing or handling of the orders, and LHV’s decisions may sometimes favour some customers over others.
- LHV’s management or employees may have financial interests in third parties (e.g. token issuers, validators, service providers) related to the crypto assets handled by LHV.
- LHV may provide services to the same third parties whose services LHV is using in the provision of crypto services.
Marketing vs. education
As a reliable bank, LHV’s marketing and educational materials (seminars, articles) have a great influence. The conflict of interest lies in the fact that LHV has a commercial interest in increasing trading volumes and generating higher profits. This may create an incentive to produce marketing content that, while factually correct, overemphasises the opportunities for crypto trading and does not give equivalent attention to its extreme risks. The line between educational and mercantile content may blur.

Operational and technological conflicts of interest
These conflicts arise from the technical implementation of the service.

System latency and price volatility (slippage). The LHV system acts as an intermediary. There is a delay between clicking the ‘Buy’ button in the LHV app and internet bank and the actual execution of the order on the partner platform (Coinbase/Bitstamp). In a volatile market, the final execution price may differ from the price displayed to the customer (slippage). Conflict of interests: LHV may be interested in reducing investments to fast, low-latency solutions to save costs. It is directly contrary to the customer’s interest for the order to be fulfilled as soon as possible at the price expected by the customer.

Handling system outages or errors. If the LHV platform or the connection with a partner is interrupted during a sharp market downturn, customers will not be able to sell their positions. Conflict of interests: It is in LHV’s interest to limit its financial liability for the losses incurred by customers during the interruption. This is contrary to the customer’s expectation that the platform will be available and that losses resulting from technical failures will be compensated. Another point of conflict is also what constitutes an error subject to compensation.

Management of conflicts of interest
To manage these conflicts, LHV implements policies and procedures aimed at:
- identifying and documenting conflicts of interest;
- preventing or limiting their impact where possible;
- implementing the division of labour and information barriers;
- ensuring transparent pricing and best execution;
- ensuring equal treatment of all customers; and
- revealing conflicts that cannot be completely avoided.
Confirmation
By using LHV’s services, you confirm that:
- you may encounter conflicts of interest described above;
- it may not be possible to completely eliminate all conflicts; and
- if conflicts cannot be avoided, LHV will disclose them and we will act in accordance with the applicable legislation and our internal policies.
Settlement of transactions

If an external partner of LHV settles a customer’s order, in the case of a purchase, crypto assets and in the case of a sale, euros will be reflected in the customer’s account. Settlement is usually almost instantaneous in LHV’s external partner systems. For purchases, euros are debited at the time of the transaction, and for sales, euros are credited after the settlement.
Summary of customer’s crypto asset holding policy

Legal separation and protection
LHV keeps the customer’s crypto assets strictly separate from the bank’s own assets and other customers’ assets. The customer’s crypto assets are not included in LHV’s balance sheet or bankruptcy assets. In the event of the possible insolvency of LHV, they cannot be used to satisfy the claims of LHV’s creditors.

Restriction on the use of customer assets
LHV does not use the customer’s crypto assets for its own account or for other purposes – the customer’s assets are intact and held solely in the customer’s interest.

Managers and infrastructure
To hold the customer’s assets, we use carefully selected third party professional managers who have the respective license to operate in the European Economic Area. The crypto assets are held in a special account (omnibus account) opened in the name of LHV with partners such as Bitstamp Europe S.A. and Coinbase Luxembourg S.A. The partners shall implement institutional-level security measures (e.g. multi-signature, cold storage, strict access control) and have insurance protections that help reduce damage from loss of assets due to fraud, cyber-attacks or negligence. The bank regularly evaluates its managers.

Reporting
LHV’s internal account system accurately reflects the positions of each customer at any given time and this data is checked regularly (including daily comparison with the manager’s balances). The customer can see their current balances in the Internet and Mobile Bank, and also check the status as at any prior date. LHV deems that MiCA’s requirement to provide an extract from the customer’s assets at least once a quarter has been met by making the statement available in the Internet and/or Mobile Bank.

Liability in case of loss of customer’s crypto assets
LHV shall be liable under MiCA for the loss of the customer’s crypto assets or the means of access to them to the extent that the loss is attributable to LHV. Liability is limited to the market value of the assets at the time of the loss.

Transfer of crypto assets
As part of the LHV crypto asset service, it is possible to hold, buy and sell crypto assets, but the transfer of crypto assets out of LHV to another service provider or to an external wallet (and vice versa) is not permitted during the term of the service. LHV allows crypto assets to be transferred out only upon termination of the crypto asset service agreement.

Upon termination of the agreement, the customer may either liquidate the relevant crypto asset positions in advance or have LHV, after all claims have been satisfied, transfer out the crypto assets held in the customer’s account to the customer’s account opened with another service provider or to the customer’s crypto asset wallet.

Upon termination of the agreement, LHV will send the customer a notification letter requesting the information necessary for the transfer of crypto assets.

If, upon termination of the agreement, the customer has not provided LHV, within a reasonable period, with the information (including evidence) required to transfer out the crypto assets and/or the customer is unable to transfer out the crypto assets, LHV shall, without a transaction order from the customer, sell the customer’s crypto assets under market conditions and transfer the amounts received from the sale to the customer’s account or to the customer’s account opened with another credit institution (which is registered in or has its place of business in a Contracting State of the European Economic Area) or, at the customer’s expense, to another bank account indicated by the customer. LHV assumes that, for the purposes of the foregoing, a reasonable period is at least 7 days, and LHV has the right, at its discretion, to grant the customer a longer deadline.

Upon termination of the agreement, crypto assets of the same type will be returned to the customer. As a rule, this requires that the receiving account or DLT address specified by the customer support the relevant crypto asset and its correct network or protocol and that the transfer be technically feasible and acceptable from a regulatory perspective.

If the customer wishes to transfer crypto assets to another service provider or to their own wallet, LHV may require evidence that the account with the other service provider is under the customer’s control or that the wallet belongs to the customer. For this purpose, LHV may use, among other things, a test transfer, remote verification, the customer’s digital signature using the key for the relevant address, or another equivalent technical solution.

A failure to provide LHV with the information (including evidence) required to transfer out crypto assets may occur, for example, if
- the customer does not provide LHV with the transfer details;
- the transfer details are incomplete or contradictory;
- LHV is unable to ascertain that the wallet or account belongs to the customer or is under the customer’s control;
- etc.
The customer may be unable to transfer out crypto assets, for example, if
- the customer does not have an account opened with another crypto asset service provider or the service provider does not allow the customer to open an account;
- the customer does not have a personal crypto asset wallet;
- the receiving account or DLT address specified by the customer does not support the relevant crypto asset and its correct network or protocol;
- the transfer out is not technically feasible (due to circumstances beyond LHV’s control);
- the transfer out of crypto assets is restricted by legislation, sanctions, anti-money laundering requirements, or documents issued by a court, supervisory authority or law enforcement authority;
- etc.
If, upon termination of the agreement, there is a technical failure, outage or service restriction in the distributed ledger, at LHV, the Custodian or other necessary infrastructure, or if the return of crypto assets of the same type is objectively impossible, LHV shall notify the customer without delay of the reason, the possible alternatives and their terms.

Additional checks
LHV complies with all customer asset protection requirements arising from the MiCA and implements additional controls specific to the credit institution (strong capital base, internal and external audits, risk management). The combination of these measures – legal separation of assets, technical security measures, trusted managers and regular reporting – helps to ensure an effective level of protection.

Crypto-asset staking

Staking is optional. Staking may only be available for certain crypto-assets, and only if LHV has enabled staking for that specific asset in its Internet or Mobile Bank. LHV may decide to enable, suspend or terminate staking for reasons including, among others, changes to the rules of the relevant crypto-asset protocol, the Custodian’s services, technical capabilities, risk assessment, or legal requirements.

What is staking and what is it used for?
Staking generally means that a crypto-asset using proof-of-stake or a similar consensus mechanism is temporarily put to use to support the security and operation of the network. Staking helps to validate transactions on the respective blockchain, create new blocks, ensure the integrity of the network, and impose financial penalties for malicious behaviour.

If staking is successful and the rules of the respective network require, the crypto-assets involved in staking may generate a reward, or staking yield. The reward is usually paid in the same or a related crypto-asset. Staking is not a deposit, an interest product, or a service offering a guaranteed return. The amount of the reward and the frequency of payments depend on the rules of the protocol, the Custodian, and/or the validator, and may change over time.

Staking does not generally mean that the customer’s crypto assets are lent to LHV or the Custodian. At the same time, staked crypto-assets may be locked, delegated, or otherwise temporarily restricted in accordance with the rules of the protocol, the Custodian, or the validator, which is why it may not be possible to sell or use them immediately.

How does staking work as an LHV service?
The technical staking solution may vary depending on the specific crypto-asset and the rules of its underlying network. Generally speaking, the process takes place as follows:

(i) the customer selects the crypto-asset and the amount they wish to stake via LHV’s Internet or Mobile Bank, and confirms the relevant terms and risks.

(ii) LHV records the customer’s instruction and records the staked crypto-assets as the customer’s position in the LHV’s internal account system.

(iii) LHV uses Custodians when providing the service of holding customer’s crypto-assets. Depending on the crypto-asset, staking may take place via the Custodian’s own technical solution, a validator selected or accepted by the Custodian, or the relevant network’s technical delegation mechanism.

(iv) The Custodian or validator participates in the relevant crypto-asset network in accordance with the protocol rules. When the network pays a reward and it is received by LHV or the Custodian, it is distributed to the customer in accordance with the amount staked by the customer, subject to the applicable fees and adjustments.

(v) If the customer wishes to unstake, they must submit an unstaking order – i.e., an order to exit staking – via an LHV channel. The assets become available for sale or other use once the relevant protocol’s, the Custodian’s and/or the validator’s technical unstaking or lock-up period has ended.

LHV may not operate the validator node itself. If staking is carried out via the Custodian or a validator selected by the Custodian, the operation of the service also depends on the systems, security measures, availability, and network rules of that Custodian or validator. LHV assesses the Custodians and service providers it uses, but cannot eliminate all risks arising from a third party or the underlying protocol.

Method of generating revenue and a lock-up period
Staking revenue, or rewards, are primarily determined in accordance with the rules of the respective blockchain protocol. The reward may depend, among other things, on the amount of crypto-assets staked, the number of validators participating in the network and their total stake, the volume of network activity, the reliability of the validator, the protocol’s reward rate, transaction fees or other protocol mechanisms, the Custodian’s and validator’s fees, and LHV’s service fee.

Lock-up period refers to the time during which staked crypto-assets may not be available for sale or use. Lock-up period may include a waiting period before rewards start to accrue, the minimum staking period, the unstaking queue, the network’s technical exit period, the Custodian’s processing time, and LHV’s settlement time. Depending on the crypto-asset, this may take anywhere from a few minutes to several weeks, or, in exceptional cases, even longer.

LHV cannot guarantee that unstaking will take place within a specific timeframe if any delay is due to the rules or technical status of the underlying network, the Custodian, the validator, or any other third party. During the lock-up period, the market price of the crypto-asset may fluctuate significantly, and the customer may not be able to sell the asset immediately to avoid a loss.

If a staked asset is locked, LHV may refuse to accept a sell order relating to that asset or may defer the execution of the order until the asset has been unstaked and is available for sale. If the protocol or the Custodian’s rules permit the immediate or early unstaking, this may result in a reduced reward, forfeiture of the reward, an additional fee or other costs.

Service fees and calculation of staking rewards
Fees and costs associated with staking may consist of LHV’s service fee, the Custodian’s fee, the validator’s fee, network fees, and other costs imposed by the protocol or a third party. The exact amounts of the fees and the method of calculation are published in the LHV price list and/or is made available to the customer by LHV in some other way.

The estimated annual return, bonus rate, etc. displayed by LHV to a customer are purely indicative and based on information available at a specific point in time. The actual bonus may be lower or higher than shown, and may also be zero. Staking rewards are generally calculated in crypto-assets, not in euros; consequently, customer’s holdings of crypto-assets may increase while their value expressed in euros decreases at the same time.

Simplified calculation logic:
Staking reward distributed to the customer = gross network reward corresponding to the customer’s share – fees charged by the Custodian and/or the validator - LHV’s service fee - any applicable taxes, mandatory deductions, reductions resulting from slashing, and other adjustments made by the protocol or the Custodian.

Examples

Example	Explanation
Reward and fee	If the assets staked by a customer earn a gross reward of 5% over the course of a year, and the combined fees charged by the Custodian/validator and LHV amount to 25% of the gross reward, the net reward distributable to the customer before deductions would be approximately 3.75% in the respective crypto-asset. The actual result depends on changes to the protocol, fees, and market prices.
Change in market price	If a customer earns more crypto-assets through staking, but the market price of those crypto-assets falls significantly at the same time, the value of the customer’s position in euros may nevertheless decrease.
Lock-in period	If a customer submits an unstaking instruction at a time when there is an exit queue on the network or the Custodian’s processing time is longer, the asset may not be immediately salable, even if the customer wishes to exit the position.

The frequency of staking reward payouts may vary depending on how often the relevant blockchain calculates rewards. LHV may credit bonuses to a customer once LHV or the Custodian has received the reward, determined the portion attributable to the customer, and deducted the necessary fees and adjustments.

Method of distributing rewards. The method of distributing staking rewards depends on the protocol of the relevant crypto-asset and the Custodian’s processes, and may vary depending on the type of the crypto-asset. For some crypto-assets, the reward is credited separately to the customer’s position and is not automatically added to the staking. For some crypto-assets, the reward is automatically added to the staking. The applicable method is shown on the respective crypto-asset staking product page in the LHV’s Internet and Mobile Banks.

The main risks and hazards associated with staking
Staking involves all the general risks associated with crypto-assets, as well as risks specific to staking. The main risks are as follows:

Market risk and volatility. Staking does not protect against a fall in the price of a crypto-asset. The reward may be less than the loss resulting from the fall in the market price.
Liquidity and lock-up period risk. Staked assets may not be immediately saleable or usable. Unstaking may take some time, and the price of the asset may change during this period.
The risk that the reward may change or not be paid. Staking rewards are not guaranteed. The reward amount may change, the reward may be paid late or the reward may not be paid at all, for example, due to an interruption in validator’s work, a protocol change, a Custodian restriction, or network issues.
Slashing, or cutting back. In some networks, a validator may forfeit part of the staked assets or their reward in the event of malicious behaviour, a breach of the rules, double voting, confirmation of an invalid block, or any other breach of the protocol. Slashing may also reduce the staked assets held by a customer or the reward distributed to them in proportion to the assets or the validator affected by the event.
Technical and operational risks. Staking depends on the blockchain protocol, Custodian and validator systems, and LHV’s technical connections. Network faults, software faults, smart contract faults, cyberattacks, key management issues, system outages or data errors may result in delays, a reduction of rewards or the risk of losing assets.
Custodian and validator risk. LHV uses Custodians to hold crypto-assets and provide technical services. Any action, inaction, insolvency, suspension of service or legal restriction on the part of the Custodian, its subcontractor or validator may affect the availability of staking, the distribution of rewards, or the time taken to unstake.
Protocol, fork and management risk. The rules of the relevant blockchain may change. The network may undergo a fork, a software update or another event that affects the staking conditions, rewards, lock-up period, or slashing.
Regulatory and tax accounting risk. Legislation, the views of supervisory authorities, or tax treatment may change. Taxation and declaration of rewards received from staking are the customer’s responsibility, unless otherwise provided for by law.
Risk of a conflict of interest. LHV may receive a staking service fee or other financial benefit from providing the service, and LHV decides which assets, Custodians, and validators to use to facilitate staking. LHV manages such conflicts of interest in accordance with its internal rules and the applicable legislation.
The risk of the service being suspended or terminated. LHV may suspend or terminate the staking service if required to do so by legislation, regulatory authorities, the Custodian’s rules, technical circumstances, a risk assessment, or other valid reasons. In such cases, the release of the assets and the final settlement may take some time.

If slashing, a technical fault or other loss is caused by an event that is not attributable to LHV and which arises, for example, from the operation of the underlying distributed ledger, the rules of the protocol, the actions of the Custodian or the validator, or a third-party attack, this does not automatically mean that LHV will compensate the customer for any loss incurred. If the loss is attributable to LHV, or if LHV’s liability arises from a mandatory legal provision or from the terms and conditions agreed with the customer, LHV’s liability shall be governed by the relevant terms and conditions and legislation.

What should a customer know before staking?

Staking is not suitable for customers who may need to sell their crypto-assets at short notice or for whom the lock-up period is unacceptable.
Staking reward is not guaranteed and the return shown is an estimate.
Customer’s crypto-assets may be temporarily restricted while staking, and their value may fall significantly during the lock-up period.
As a result of staking, the customer may acquire additional crypto-assets; however, the value of the customer’s total position in euros may nevertheless decrease.
Before staking, customers should familiarise themselves with the relevant information on the crypto-asset, LHV’s terms and conditions, price list, risk information, and tax treatment, and seek independent advice where necessary.
LHV does not provide investment, tax or legal advice in relation to staking, and any decision by a customer to engage in staking is their own decision at their own risk.

Complaints and disputes

Submitting a complaint about a crypto asset service to AS LHV Pank (LHV) is free of charge. A complaint is a statement of a customer’s dissatisfaction related to one or more crypto asset services provided by LHV. A complaint may be submitted via the Internet Bank, Mobile Bank, or using the standard form published on the LHV website, or in free form. Use of the standard form is not mandatory.

Complaints are handled by the LHV Treasury and Markets department. A complaint may be submitted via the LHV website, by e-mail to info@lhv.ee, by post to AS LHV Pank, Tartu mnt 2, 10145 Tallinn, or at the LHV office in Tallinn, electronically or on paper. For questions related to a complaint, please contact the LHV Treasury and Markets department at maaklerid@lhv.ee or by phone at +372 680 0420.

A complaint is admissible if it is possible to identify at least the complainant’s name or designation and contact details, the crypto asset service, transaction or other circumstance related to the complaint, the content of the complaint, and where possible, relevant dates and documents or other evidence supporting the complaint. If a complaint is submitted by a representative, LHV may request a document confirming the right of representation. A more detailed list of the data to be submitted is set out in the standard complaint form published on the LHV website. LHV may request additional information necessary for reviewing the complaint that LHV does not yet have.

Complaints can be submitted in the languages in which LHV markets crypto asset services or communicates with customers. These languages are currently Estonian, English and Russian.

LHV confirms receipt of the complaint and notifies the complainant of its admissibility without undue delay after receiving the complaint. In the acknowledgement of admissibility, LHV indicates at least the date of receipt of the complaint, the processing deadline, and the contact person or unit details; for complaints submitted via the web form, LHV also provides a copy of the complaint. If a complaint is unclear or incomplete, LHV requests additional information from the customer without undue delay. LHV handles the complaint fairly, consistently and without undue delay, keeps the customer informed of the progress of the proceedings, and responds to the customer’s reasonable enquiries without undue delay. LHV provides a reasoned decision generally within 30 business days, but no later than 2 months from the date of receipt of the complaint. If, in exceptional circumstances, it is not possible to issue a decision within this period, LHV notifies the customer of the reasons for the delay and the expected date of the decision. Communication with the customer is in clear and understandable language, generally in the language in which the complaint was submitted, and in writing electronically or, at the customer’s request, on paper.

The complaints handling procedure is also made available to the customer upon their request and upon acknowledgement of receipt of the complaint. LHV registers complaints and the measures taken to resolve them in a secure electronic system.

If LHV’s decision does not fully or partially satisfy the customer, LHV provides information on further legal remedies together with the decision. A consumer may apply to the Consumer Disputes Committee at the Consumer Protection and Technical Regulatory Authority (Endla 10A, 10122 Tallinn, info@ttja.ee). The customer may also contact Finantsinspektsioon (Sakala 4, 15030 Tallinn, info@fi.ee) and use other legal remedies, including taking the matter to court.
Investor protection and guarantees

Crypto assets are not protected by the deposit guarantee scheme of the Estonian Guarantee Fund or the investor compensation scheme that applies to certain securities services.
Taxation

LHV shall issue a report on the customer’s crypto transactions, which helps with tax reporting, but tax accounting and declaration are the responsibility of the customer.