Whistleblower Policy

This Whistleblower Policy (the “Policy”) has been developed by and for LBK Exchange FZE (referred to as we, us, our, ours or Company). This Policy is reviewed annually, unless there is a change in regulation that requires to implement an earlier update. The Compliance Officer is responsible for maintaining, developing, implementing and updating this Policy and ensuring compliance with all applicable laws, regulations, and best practices. The Company’s Board of Directors (“Board”) is responsible for approving and monitoring the implementation of this Policy and the related procedures. Upon establishing that an update is required, the Compliance Officer proposes changes by presenting them to the Board. Once the Board approval is sought, the changes are incorporated in the Policy.

Document revision history

The Company is committed to the highest standards of integrity, accountability, and transparency. An important aspect of this commitment is establishing a mechanism to enable every person serving or connected to the Company to voice concerns in a responsible and effective manner in compliance with the regulatory framework of the Virtual Assets Regulatory Authority (“VARA”), including, inter alia, the Virtual Assets and Related Activities Regulations 2023 (the “VARA Regulations”), and the accompanying rulebooks (“Rulebooks”) issued by VARA. All capitalised terms, if not defined within this Policy, have the same meaning ascribed to them in the VARA Regulations or the accompanying Rulebooks.

1. PURPOSE

The purpose of this Policy is to ensure that the Company has adequate framework under which any person, who discovers information indicating serious malpractice or wrongdoing within the Company, can escalate and report such matter internally and / or externally without fear of facing reprisal or retaliation. It is understood that every person serving or connected to the Company is bound by obligations of confidentiality. However, in the interest of stakeholders (including any clients) as well as overall regulatory compliance, it is essential to authorise such internal reporting and escalation structures. 

This Policy applies to any person serving or connected to the Company including but not limited to employees, external consultants, contractors, and agency staff while working in their capacity for the Company. This Policy applies to all individuals working at all levels, including any members of our Board, any company of our group or their business partners, senior managers, employees (whether permanent, fixed-term, or temporary), consultants, contractors, suppliers, trainees, seconded staff, agency staff, volunteers, interns, agents, sponsors, or any other person associated with us, wherever located. All such persons are collectively or individually referred to as the “Whistleblower”. 

By way of this Policy, the Company seeks to:

a) Be responsive to a Whistleblower;

b) Foster an organisational culture of trust and transparency;

c) Cultivate an organization that treats a Whistleblower with respect;

d) Demonstrate commitment to its own policies and applicable laws and regulations; and

e) Strengthen the “speak up” culture within the Company.

As such, an effective whistleblower policy is of vital importance to:

a) Protect the integrity of the Company and the Whistleblower,

b) Comply with legal obligations,

c) Prevent financial loss and regulatory sanctions,

d) Protect the reputation of the Company.

The Company has endorsed the provisions set out below to ensure that no Whistleblower feels at a disadvantage in raising legitimate concerns. It should be emphasised that this Policy is intended to assist persons who believe they have discovered malpractice or impropriety. It is not designed to question financial, or business decisions taken by the Company, nor should it be used to reconsider any matters which have already been addressed under harassment, grievance/complaint, disciplinary or other procedures.

 
This Policy is intended to cover concerns that are of public interest and may at least initially be investigated separately but might then lead to the invocation of other procedures e.g., disciplinary procedures.  These concerns could include:

a) Contravention / Potential contravention of any provisions of law / Failure to comply with a legal obligation or statutes;

b) Financial malpractice, impropriety, or fraud;

c) Money laundering and terrorism financing;

d) Market manipulation;

e) Theft;

f) Fraud;

g) Corruption or bribery;

h) Actions which endanger the health or safety of the Whistleblower or the public;

i) Actions which cause grave damage to the environment;

j) Criminal activity or offences;

k) Improper conduct or unethical behaviour (includes acts which do not conform to approved standards of social and professional behaviour); and

l) Attempts to conceal any of the above.

This Policy does not apply to complaints for which specific procedures have been separately established. For example,

a) complaints related to employee grievances,

b) complaints related to labour laws,

c) complaints from clients or third parties. However, clients or third parties may report suspected misconduct by writing to the Compliance Officer at maleesha.gunawardana@lbank.com
 

2. SAFEGUARDS

2.1. Protection against detriment

This Policy is designed to offer protection to the Whistleblower who makes a protected disclosure, provided the disclosure is made:

a) In good faith;

b) In the reasonable belief of the Whistleblower that the information, and any allegations it contains, are substantially true;

c) Is made in accordance with the procedures of this Policy; and

d) The individual is not acting for personal gain.

A Whistleblower who is deemed to have made a protected disclosure in line with the aforementioned requirements shall not to be affected by any kind of detriment, retaliation or discrimination that occurs as a result of whistleblowing, including but not limited to:

a) Withholding of promotions or training;

b) Harassment;

c) Loss of status or benefits;

d) A negative change in role duties;

e) Changes to hours of work;

f) Physical harm;

g) Any action by the Company or any related party of the Company which is reasonably likely to cause detriment or disadvantage to the Whistleblower; or

h) Threats of any of the aforementioned actions.

Any complaint of retaliation in lieu of such disclosures, including but not limited to, threats of physical harm, loss of job, punitive work assignments, or reduced salary or wages, will be promptly investigated. Such a complaint must be made and shall be investigated in accordance with the same procedure adopted for disclosure by a Whistleblower mentioned under clauses 3, 4, and 5 of this Policy.

A Whistleblower shall be deemed to be making a protected disclosure in ‘good faith’ if there is an honestly held belief, at the time of disclosure, that the information offered is true and there is a reasonable basis for communication of concerns listed under clause 1.2 of this Policy. Good faith shall be deemed lacking when the Whistleblower does not have personal knowledge of a factual basis for making the disclosure or where the Whistleblower knew or should have known that the disclosure made is malicious, false or frivolous.
 

Confidentiality 

The Company will treat all such disclosures in a confidential and sensitive manner. Any reports submitted are accessible only to those persons who have, in the judgment of the Compliance Officer, a need to know the information. The identity of the individual making the allegation shall be kept confidential so that it does not hinder or frustrate any investigation. However, the investigation process may reveal the source of the information and the Whistleblower making the disclosure may need to provide a statement as part of the evidence required. 

Notwithstanding the above commitment to confidentiality, should such disclosures be required to be made by the Whistleblower to appropriate external whistleblowing channels pursuant to law or the order of a court of law or regulatory authorities, the Company’s policy for safeguarding confidential information of such disclosure shall not apply.
 

Anonymous allegations

This Policy encourages individuals to put their names to any disclosures they make. Concerns expressed anonymously may be less credible, but they may be considered at the Company’s discretion. In exercising this discretion, the factors to be considered will include: 

a) The seriousness of the issues raised;

b) The credibility of the concern; and

c) The likelihood of confirming the allegation from attributable sources.

Allegations made anonymously should contain sufficient detail and information so that, if necessary, a meaningful investigation can be conducted.

Untrue or malicious allegations

If an individual makes an allegation in good faith, which is not confirmed by subsequent investigation, no action will be taken against that individual.      In making a disclosure the individual should exercise due care to ensure the accuracy of the information. 

If, however, an individual makes malicious, vexatious or deliberate false allegations or disclosures exclusively in self-interest, and particularly if he or she persists in making them, such disclosures may result in disciplinary actions against that individual (including termination of employment, if warranted) in accordance with the applicable law, the Company’s rules, policies and procedures.

 
To ensure fairness and impartiality, the Company will exercise caution in not assuming malicious intent behind a whistleblowing report solely based on the context within which it is being made. For the avoidance of doubt, valid concerns warranting investigation can still arise, even from individuals undergoing employment- related disciplinary processes.

Self-implications

If whilst “blowing the whistle” an individual implicates himself/herself in any wrongdoing, he/she is likely to receive a lighter sanction than might otherwise have been the case. However, if the misconduct is serious, the Company may not be able to take conduct into account. 

3. PROCEDURE

 
Should this not be acceptable then available they may reach out to the Compliance Officer via email at maleesha.gunawardana@lbank.com

On receipt of a complaint of malpractice, the member of staff (line manager, or Compliance Officer) who receives and takes note of the complaint must pass this information as soon as is reasonably practicable to the appropriate designated investigating officer as follows:

a) Complaints of malpractice will be investigated by the Compliance Officer or an investigating officer or a committee appointed by him, unless the complaint is against the Compliance Officer or is in any way related to his/her actions. In such cases, the complaint should be passed to the Chief Executive Officer.

b) If the complaint involves both the Compliance Officer and the Chief Executive Officer, then it should be passed on to the Risk Committee of the Board.

c) The complainant has the right to bypass the line management structure and take their complaint direct to the Chief Executive Officer. The Managing Director has the right to refer the complaint back to management if he/she feels that the management, without any conflict of interest, can more appropriately investigate the complaint.

Should none of the above routes be suitable or acceptable to the complainant, then the complainant may approach an external party such as a lawyer or law enforcement authorities.

If there is evidence of criminal activity, then the investigating officer should inform the law enforcement authorities. The Company will ensure that any internal investigation does not hinder a formal investigation by the law enforcement authorities.

4. TIME FRAME

Due to the varied nature of these complaints, the Company does not seek to lay down a precise timescale for each investigation.

However, the Company will ensure that investigations are undertaken as quickly as possible within a reasonable period of time, without affecting the quality and depth of those investigations.

The complainant will receive a written acknowledgment of their complaint and will be kept informed of the progress of the investigation with a report in writing as to the outcome.

All responses to the Whistleblower should be in writing and sent to their home addresses. 

In the case of anonymous disclosures, the above process will not apply.

5. INVESTIGATION

The investigating officer should follow these steps:

a) Full details and clarifications of the complaint should be obtained.

b) The investigating officer should inform the person against whom the complaint is made as soon as is practically possible. This person will be informed of their right to be accompanied by a representative at any future questioning or interviews held by the investigating officer.

c) The investigating officer should consider the involvement of the Company’s auditors and the law enforcement authorities at this stage and should consult with the Managing Director in this regard.

d) The allegations should be fully investigated by the investigating officer with the assistance where appropriate, of other individuals/ bodies.

e) A judgement concerning the complaint and validity of the complaint will be made by the investigating officer. This judgement will be detailed in a written report containing the findings of the investigations and reasons for the judgement. The report will be passed to the Managing Director as appropriate.

f) The Managing Director will decide on what action to take. If the complaint is shown to be justified, they shall immediately report it to VARA. The Managing Director shall also prepare a written summary of the remedial actions taken and invoke disciplinary or other appropriate procedures. A copy of these reports shall be retained for a period of eight (8) years from completion of such investigation. The complainant should be kept informed of the progress of the investigations and, if appropriate, of the outcome.

g) If appropriate, a copy of the outcomes will be passed to the Company’s auditors to enable a review of the procedures.

If the investigation finds the allegations unsubstantiated and all internal procedures have been exhausted, but the complainant is not satisfied with the outcome of the investigation, the Company recognises the lawful rights of this person to seek external counsel and make required disclosures to prescribed persons or where justified, elsewhere.

6. Disclosure

The Company shall also make available by other publicly accessible means its policies and procedures relating to whistleblowing. The Company shall ensure that these disclosures are prominently displayed in a clear and easily understandable and regularly updated.