Bankruptcy Remoteness

Midas employs a robust bankruptcy-remote structure to protect investor assets and ensure they remain secure, even in the event of financial distress. This structure includes the pledge of collateral by way of security, ensuring that tokenholders hold secured claims on the assets backing mTBILL, providing strong legal protections in the event of insolvency.

Key Features and Investor Benefits

• Pledge of Collateral by Way of Security The assets backing mTBILL, such as U.S. Treasury Bills, are pledged to tokenholders by way of security, meaning that tokenholders have secured claims over the collateral. This provides priority access to the collateral in case of insolvency, ensuring that tokenholders are protected from the operational risks of Midas.

• Bankruptcy-Remote Collateral Accounts The collateral is held in bankruptcy-remote accounts, separated from Midas’s operating entity, and monitored by a third-party verification agent. These accounts include both deposit accounts for securities and wallets for digital assets, ensuring that investor funds are insulated from any financial challenges faced by Midas.

• Independent Oversight and Security Enforcement A third-party verification agent continuously monitors the pledged collateral and enforces the security arrangements if Midas defaults or becomes insolvent. This independent oversight ensures that tokenholders’ rights are protected, and the collateral remains secure and aligned with legal requirements.

• Priority Claims Under German Insolvency Law in the event of insolvency, tokenholders have secured claims under Section 50 para. 1 or Section 51 no. 1 of the German Insolvency Code (InsO). This ensures that the pledged collateral is prioritized over claims from unsecured creditors. However, the realized value of the collateral depends on market conditions at the time of liquidation.

Qualified Subordination

A qualified subordination agreement was entered into for all current and future claims of the tokenholders. The qualified subordination means that interest payments and loan repayment to the tokenholder will rank below all other creditors of the company in the event of insolvency, but above the shareholders. Additionally, the tokenholder cannot assert claims for interest payments or loan repayment if doing so would lead to the company’s insolvency. The claims of the holders of the mTBILL Token are secured by a pledge of the collateral. Further details can be found in the prospectus, which is available at Prospectus Documents.

• Low Operational Risk Midas operates as a special purpose vehicle (SPV) with minimal operational costs, reducing the risk of insolvency. The fees collected from tokenholders are structured to cover operational expenses. While this setup reduces exposure to external risks, investors should note that systemic market risks or extreme conditions could still impact the underlying assets.

• Transparency and Continuous Monitoring The verification agent monitors the collateral on a daily basis and provides regular reports, ensuring transparency and building investor confidence. This ongoing oversight helps to ensure that the collateral remains eligible and properly managed, protecting tokenholders’ interests at all times.

Bankruptcy Remote SPV

The Collateral and Control Agreements are key legal documents that are designed to protect the interests of Tokenholders in the mTBILL product, with Ankura Trust Company LLC acting as the Verification Agent. These agreements outline the roles, responsibilities, and conditions under which the collateral securing the Tokens is managed, controlled, and potentially liquidated.

Events that would lead to liquidation include:

Event Type	Conditions Met to Trigger Liquidation	Ankura’s Actions
Default	Failure by Midas to meet its payment obligations or if Midas becomes insolvent	Ankura sends a formal notice to the Custodian, takes control of the Collateral Account, liquidates assets, and distributes proceeds to tokenholders​
Insolvency	Midas is unable to pay its debts, declares insolvency, or enters bankruptcy proceedings	Ankura verifies the insolvency event, takes control of the Collateral Account, liquidates the collateral, and distributes the proceeds to tokenholders​
Ineligible Asset(s)	Midas holds assets that do not qualify as collateral, fails to invest proceeds generated from the sale of tokens into qualified collateral in a timely manner (5 business days), or fails to meet reporting requirements	Ankura identifies the ineligible assets, enforces corrective action by replacing or liquidating the ineligible assets, and ensures the correct collateral is in place​

Eligible Collateral

At Midas, the collateral backing mTBILL is composed of high-quality, low-risk assets to ensure stability and security for investors. The primary eligible collateral consists of short-duration U.S. Treasury Bills and funds that invest in U.S. Treasury Bills. These assets are chosen for their liquidity and credit quality, offering a predictable and stable return.

To maintain security and compliance, all eligible collateral is independently verified by a third-party security agent, ensuring that the assets meet strict criteria and are properly managed at all times.

Key Criteria for Eligible Collateral:

• U.S. Treasury Bills: The core asset backing mTBILL, known for their low risk and government backing, providing stability under periods of stable market conditions.

• Funds & ETFs: Only those composed of U.S. Treasury Bills or equivalent, ensuring high liquidity and creditworthiness.

Daily Independent Verification: The security agent monitors and verifies that all assets meet the predefined criteria and provides independent attestations to ensure transparency and protection for the investors as outlined in Bankruptcy Remoteness.