Please describe your proposed solution

A. How We Perceive the Problem

Key Takeaway: The biggest benefit for Cardano projects is the creation of a FINMA-compliant funding framework that removes barriers to institutional and qualified capital by providing a scalable, legally robust, and cost-efficient structure for electronic securities issuance.

Many Cardano projects face significant barriers to accessing funding, especially from institutional and qualified investor

a. Regulatory Complexity: Strict requirements from authorities like BaFin and MiCA create high compliance costs and procedural hurdles.

b. Lack of Market Trust: Without a robust, legally compliant framework, projects struggle to gain the confidence of professional investors.

c. Funding Inefficiency: Projects often lack scalable funding mechanisms tailored to their needs, limiting growth and innovation within the ecosystem.

The absence of a compliant and efficient structure for electronic securities issuance hinders Cardano’s potential to attract large-scale, long-term capital, leaving projects underfunded and unable to realize their goals.

B. Our Solution

We propose a FINMA-compliant funding framework that allows Cardano projects to issue electronic securities under Swiss law, targeting professional investors and eligible counterparties.

Regulatory Alignment with Swiss DLT Act

a. Issuing ledger-based securities that are legally recognized and tokenized on Cardano’s blockchain.

b. Leveraging licensed DLT trading facilities for secondary market liquidity.

c. Ensuring clear, cryptographically secure ownership proof.

Investor Engagement:

a. Professional Investors and Eligible Counterparties: Streamlined processes with reduced regulatory burdens, offering attractive investment opportunities.

b. Retail Investors: Providing enhanced protections through prospectus requirements, suitability checks, and simplified disclosures.

Compartmentalized Investment Structure:

a. Each project’s funding is segregated into dedicated compartments, protecting assets and allowing tailored risk management.

Cost-Effective Compliance:

a. Private Placement Exemptions: Minimizing compliance costs for professional investors by utilizing FINMA’s exemptions.

b. Cross-Border Market Access: Using Switzerland’s EU equivalence agreements to extend market reach without duplicating regulatory efforts.

C. Why This Approach?

Our approach leverages Switzerland’s innovation-friendly DLT Act and FINMA’s clear regulatory framework because:

1. Efficiency: Switzerland offers a simpler, more cost-effective compliance path compared to BaFin and MiC
2. Trust: FINMA’s globally recognized standards instill confidence in professional investors and eligible counterpartie
3. Scalability: The framework supports tailored solutions for projects of varying sizes while ensuring asset segregation and securit

D. Who Will Our Project Engage?

Our project engages:

1. Professional Investors: Banks, investment firms, pension funds, and high-net-worth individuals seeking compliant blockchain-based investments.
2. Eligible Counterparties: Large financial institutions and supranational organizations, such as central banks and governments.
3. Regulated Custodians and Trading Platforms: Key partners for asset custody and liquidit

In Switzerland, investor types are classified under the Swiss Financial Services Act (FinSA) into the following categories:

+ Additional information to understand different investor types and target group

a. Retail Investors

Definition: Individuals or entities that do not meet the criteria for professional investors.

Characteristics: Receive the highest level of protection under FinSA. Require suitability and appropriateness checks to assess risk tolerance and financial knowledge. Must be provided with detailed disclosures, including prospectuses and Key Information Documents (KIDs) for financial products. Examples: Individual investors without significant financial knowledge or experience.

b. Professional Investors

Definition: Investors deemed knowledgeable and capable of understanding financial risks without the need for extensive regulatory protections. Subcategories:

b1. Institutional Investors: Banks, insurance companies, pension funds, and regulated investment firms.

b2. Large Corporations: Companies meeting at least two of the following thresholds: Balance sheet total: ≥ CHF 20 million. Net turnover: ≥ CHF 40 million. Equity capital: ≥ CHF 2 million.

b3. High-Net-Worth Individuals (HNWIs): Option 1: CHF 500,000 in investable assets and proven financial expertise. Option 2: CHF 2 million in investable assets without expertise.

c. Eligible Counterparties. Definition: Regulated entities and organizations with significant market experience and financial resources, requiring minimal regulatory protections. Examples: Regulated financial institutions (banks, credit institutions, insurance companies). Governments and central banks. Supranational organizations like the European Union (EU) or the International Monetary Fund (IMF).

d. Opted-Out Retail Investors. Definition: Retail investors who voluntarily waive their retail status to be treated as professional investors. Criteria for Opt-Out: Meet the HNWI thresholds for wealth and expertise. Sign a declaration acknowledging the risks of reduced protection.

E. How Will We Prove Impact?

We will measure impact through:

1. Funding Secured: Tracking the total funds raised for Cardano projects.
2. Investor Engagement: Demonstrating increased participation from professional investors and eligible counterparties.
3. Market Liquidity: Evaluating trading volume and liquidity on licensed DLT trading platforms.
4. Project Success: Monitoring the growth, adoption, and innovation of funded Cardano projects.
5. Regular reporting, combined with blockchain transparency, ensures accountability and clear proof of succes

F. What is Unique About Our Solution?

Our solution stands out due to:

1. FINMA Compliance: Leveraging Switzerland’s regulatory advantages for streamlined, legally robust funding mechanisms.
2. Tailored Compartmentalization: Isolating each project’s funding to mitigate risks and enhance investor confidence.
3. Cross-Border Reach: Expanding market access through Switzerland’s EU equivalence agreements.
4. Blockchain Integration: Utilizing Cardano’s secure, scalable blockchain for ledger-based securities issuance

+ Additional information Cross-Border Reach

Switzerland’s equivalence agreements with the EU provide a significant advantage for Swiss-based financial services, including the issuance of ledger-based securities under the Swiss DLT Act. These agreements facilitate streamlined access to EU markets, allowing Swiss financial institutions and products to operate under similar regulatory conditions as EU-based counterparts without the need for duplicative compliance measures. Equivalence agreements are bilateral arrangements where the European Commission recognizes that a third country’s regulatory framework is equivalent to EU standards. This recognition simplifies cross-border operations by reducing legal and procedural barriers between jurisdictions. Benefits for Swiss-Based Issuers:

Access to EU Professional Investors and Markets:

Swiss issuers of electronic securities can target professional investors across the EU without requiring additional authorization or compliance with specific EU regulations like MiCA or BaFin rules. This simplifies the marketing and distribution of Swiss-compliant financial products.

Streamlined Operations:

Swiss entities benefit from reduced compliance costs as they do not need to restructure their offerings to meet EU regulations if equivalence applies. For example, prospectuses approved under Swiss FinSA may be recognized in the EU for professional investors, avoiding the need for duplicative approvals.

Enhanced Market Reach

Swiss issuers gain access to the EU’s large investor base, significantly increasing the potential capital available for projects. Cardano projects issued under Swiss law can be marketed and distributed efficiently across multiple EU countries.

G. Who Benefits and Why This is Important to Cardano?

1. Cardano Projects: Gain access to sustainable, scalable funding mechanisms.
2. Investors: Receive secure, compliant opportunities to invest in blockchain innovation.
3. Cardano Ecosystem: The solution drives ecosystem growth, attracting more developers, users, and institutional interest.

+ Additional information / Glossary of Key Terms

1. FINMA: Swiss Financial Market Supervisory Authority, regulating financial markets and ensuring compliance.
2. Electronic Securities: Digital representation of traditional securities recorded on a ledger or DLT.
3. DLT (Distributed Ledger Technology): Decentralized technology enabling secure, immutable transaction recording.
4. Professional Investors: Entities or individuals meeting specific wealth or expertise thresholds for investments.
5. Eligible Counterparties: Regulated entities like banks or governments engaged in high-level financial transactions.
6. Compliance: Adhering to regulatory requirements like FINMA, AML, and KYC standards.
7. KYC (Know Your Customer): Process of verifying the identity of clients to prevent fraud or money laundering.
8. AML (Anti-Money Laundering): Policies to detect and prevent illicit financial activities.
9. Tokenization: Converting asset ownership into blockchain-based digital tokens.
10. Ledger-Based Securities: Securities registered on a blockchain ledger under the Swiss DLT Act.
11. Compartmentalization: Isolating assets and liabilities into separate legal entities for risk management.
12. Risk Disclosure: Informing investors about potential risks associated with an investment.
13. Swiss DLT Act: Legal framework recognizing blockchain-based securities in Switzerland.
14. MiFID II: EU regulation for transparency and investor protection in financial markets.
15. Equivalence Agreements: Cross-border recognition of regulatory frameworks, simplifying market access.
16. Retail Investors: Non-professional individuals investing without significant financial expertise.
17. HNWIs (High-Net-Worth Individuals): Wealthy individuals meeting specific financial thresholds for investments.
18. Key Information Document (KID): Simplified document explaining risks and details of an investment for retail investors.
19. Custodians: Entities safeguarding securities or assets on behalf of investors.
20. Secondary Market Liquidity: Ability to trade securities on platforms after initial issuance.
21. Prospectus: Official document disclosing information about securities offered to the public.
22. AML Act: Swiss law ensuring anti-money laundering compliance.
23. Transparency: Clear and accurate reporting of risks, costs, and terms to investors.
24. Trading Facility: Platform authorized to trade securities, including DLT-based assets.
25. Cross-Border Access: Ability to offer securities across multiple jurisdictions.
26. FATCA: U.
27. AEOI (Automatic Exchange of Information): Global standard for exchanging tax-related financial information.
28. Liability Umbrella: Entity providing compliance coverage for investment offerings.
29. Security Agent: Entity safeguarding investor interests and managing securities.
30. Securitization: Converting assets into securities for sale to investors.

Please define the positive impact your project will have on the wider Cardano community

Our project will enable Cardano projects to access large-scale, compliant funding through a FINMA-compliant framework for electronic securities issuance. By lowering regulatory barriers and providing a scalable funding mechanism, we empower projects to innovate and grow, attracting institutional capital to the Cardano ecosystem. This strengthens Cardano’s position as a leader in decentralized finance, fosters adoption, and promotes sustainability by bridging the gap between blockchain technology and traditional financial markets.

A. How the Success of Our Project Brings Value

1. Increased Funding Opportunities: Cardano projects gain access to professional and qualified investors, unlocking significant capital that was previously unattainabl
2. Ecosystem Growth: Improved funding drives innovation, enabling projects to deliver cutting-edge solutions, attract developers, and onboard user
3. Market Trust: A FINMA-compliant framework enhances credibility, making Cardano an attractive platform for both blockchain and traditional finance stakeholder
4. Cross-Border Expansion: Leveraging Switzerland’s equivalence agreements expands Cardano’s global reach, ensuring ecosystem growth in new market

B. How We Will Measure Impact

We will measure impact through both quantitative and qualitative metrics:

Quantitative Metrics:

Funds Raised: Total capital secured by Cardano projects through this framework.

Investor Participation: Number and diversity of professional and eligible counterparties engaging with Cardano projects.

Secondary Market Activity: Trading volume and liquidity of electronic securities on licensed DLT platforms.

Qualitative Metrics:

Investor and Project Feedback: Insights from investors and project teams about the efficiency and trustworthiness of the framework.

Market Perception: Increased trust in Cardano as a secure and compliant blockchain ecosystem.

C. How Outputs and Opportunities Will Be Shared

Transparent Reporting:

Publish periodic reports summarizing key metrics, such as capital raised, investor engagement, and project milestones.

Share case studies and success stories of funded Cardano projects to inspire and inform the community.

Community Engagement:

Organize webinars, workshops, and AMA sessions to showcase the framework’s benefits and how projects can participate.

Partnership Announcements:

Publicly share partnerships with regulated custodians, DLT trading platforms, and institutional investors to build confidence in the ecosystem.

What is your capability to deliver your project with high levels of trust and accountability? How do you intend to validate if your approach is feasible?

Our organization is uniquely positioned to deliver this project with unparalleled trust and accountability, combining established expertise, stringent regulatory compliance, and a proven track record in executing similar initiatives. FI Finest Investments GmbH operates within the FINMA regulatory framework, recognized for its rigorous standards in securities issuance and sales, while also ensuring cross-border alignment with European equivalence agreements. Our expertise extends to KYC, AML, and KYT processes, enabling us to meet the highest standards of transparency and ethical conduct. This positions us as a trusted partner for institutional and qualified investors, fostering confidence in our solutions.

A. Feasibility Validation of Our Approach

We validate the feasibility of our approach through a structured and thorough multi-step process:

Technical Feasibility Studies:

Conduct in-depth evaluations of technological requirements, infrastructure readiness, and integration capabilities, ensuring robust and scalable solutions for Cardano-based securities issuance.

Regulatory Compliance Audits:

Collaborate with regulatory authorities and legal experts to confirm that our solutions align with the requirements of FINMA, the Swiss DLT Act, and other applicable frameworks in targeted jurisdictions.

Pilot Testing and Iterative Feedback:

Implement controlled pilot phases to gather actionable data, refine processes, and ensure that the framework meets the needs of both investors and projects while delivering measurable outcomes.

B. Existing Capabilities Demonstrating Suitability

FI Finest Investments GmbH brings a wealth of experience, supported by:

Technological Leadership: Leveraging blockchain expertise to align Cardano’s decentralized technology with robust regulatory frameworks ensures that our solutions are both innovative and compliant.

• UTXO AG (NMKR):

As a pioneer in blockchain tokenization infrastructure, UTXO AG (NMKR) provides robust tools for creating, managing, and distributing tokenized assets. Their expertise in smart contract integration and scalable tokenization solutions ensures our project can meet the highest technical and operational standards, allowing for seamless deployment and scalability.

• Fluid Tokens:

Fluid Tokens offers cutting-edge DeFi lending and collateralization platforms, enabling innovative use cases for tokenized assets. Their operational expertise in smart contract execution and liquidity management provides additional value to our project, ensuring efficient market mechanisms and enhanced asset utility.

• IAMX AG:

IAMX AG brings deep operational expertise in digital identity solutions, enabling seamless KYC/AML processes and enhanced user onboarding. With partnerships including Intrum AG, IDnow GmbH and Merkle Science, IAMX delivers state-of-the-art identity verification systems that comply with global regulatory standards, reducing friction while ensuring security and trust. Furthermore, Tim Heidfeld, Compliance Officer, holds the Certified European Financial Analyst (CEFA) Diploma, gold standard for financial professionals across Europe (Level 7 of the European Qualifications Framework EQF). Accredited in 15 countries and recognized by regulatory authorities like the FCA (UK) and counterparts in Spain, Portugal, Malta, Romania, and Greece. His CEFA qualification equips him with advanced knowledge of regulatory and market structures, making him instrumental in ensuring compliance and market alignment for our projects.

What are the key milestones you need to achieve in order to complete your project successfully?

Milestone 1: Milestone 1: Regulatory Analysis

Milestone Outputs: Analysis of FINMA regulations and compliance requirements for professional investors and eligible counterparties.

Acceptance Criteria: Internal legal review confirming alignment with FINMA standards.

Evidence: Finalized regulatory analysis document approved by internal legal expert.

Milestone 2: Milestone 2: Questionnaire

Milestone Outputs: Questionnaire for classifying professional investors and eligible counterparties in compliance with FINMA standards.

Acceptance Criteria: Internal legal and compliance team approval of the Questionnaire.

Evidence: Finalized questionnaire document.

About: To classify professional investors and eligible counterparties under FINMA standards and MiFID II, key criteria include financial thresholds, professional experience, and regulatory status. Professional clients must demonstrate relevant expertise, significant investment assets, or operate as qualifying legal entities. Eligible counterparties include financial institutions, large corporations, and government entities. Investor classification requires thorough documentation, regular reviews, and adherence to regulatory requirements to ensure compliance and audit readiness.

Milestone 3: Milestone 3: Chatbot Demonstration

Milestone Outputs: Fully operational chatbot integrating the Questionnaire for investor classification.

Acceptance Criteria: Successful demonstration showing accurate and compliant investor classification.

Evidence: URL to the chatbot with the questionnaire for professional investors and eligible counterparties and a video demonstrating this.

About: explain a text and rules based chatbot on https

Milestone 4: Milestone 4: Signed Agreement with Chartered Investment

Milestone Outputs: Executed agreement with Chartered Investment to facilitate offerings for professional investors and eligible counterparties.

Acceptance Criteria: Redacted signed contract with terms.

Evidence: Redacted Copy of the signed agreement.

About: Agreement between

a. FI finest Investments GmbH, Luegallee 12, 40545 Duesseldorf, Germany, Commercial Register: HRB 104198, Amtsgericht Duesseldorf, USt-ID:DE368580709, URL https://www.finest.investments/ and

b. Chartered Investment Germany GmbH, Fürstenwall 172a/6. OG, 40217 Düsseldorf, Handelsregister HRB 71114 Amtsgericht Düsseldorf, Umsatzsteueridentifikationsnummer DE291591992, URL https://chartered-investment.com/en/company/, for financial compartment operations with its subsidiary Opus as a securitization vehicle (Opus is a bank-independent issuance platform offering professional market participants the opportunity to create highly tailored investment products): Opus - Chartered Issuances SA, 28, Boulevard F.W. Raiffeisen, 2411 Luxembourg, Luxembourg, Register RCS B180859, URL https://chartered-opus.com/en/about-us.

Milestone 5: Milestone 5: End-to-End Testing

Milestone Outputs: Documentation of a test result from a process from investor onboarding to compliance checks and token issuance.

Acceptance Criteria: Successful completion of test cases covering all operational steps without critical issues.

Evidence: Redacted test reports with documented results and stakeholder approval.

Final Milestone: Final Milestone 6: Pilot Token Offering electronic security / ledger-based securities

Milestone Outputs: Successful pilot token offering for a Cardano project targeting professional investors and eligible counterparties.

Acceptance Criteria: Full subscription of the offering meeting regulatory and operational standards.

Evidence: Subscription records, compliance reports, and post-offering audit results.

Furthermore, this includes

Final closeout report under this link: https://github.com/FI-finest-Investments-GmbH/Compliant_funding_Cardano_Professional_Clients

Final closeout video under this link: https://github.com/FI-finest-Investments-GmbH/Compliant_funding_Cardano_Professional_Clients

Who is in the project team and what are their roles?

Tim Brückmann, CMO IAMX IAMX https://iamx.id, GF at finest Investments GmbH, https://www.linkedin.com/in/tim-b-7864a284/

Matteo Coppola, CEO at FluidTokens.com, GF at finest Investments GmbH, https://www.linkedin.com/in/matteo-coppola-mazzetti/

Raul Rosa, CTO at FluidTokens.com, https://www.linkedin.com/in/raul-antonio-rosa-padilla/

Patrick Tobler, CEO & Founder NMKR, https://www.linkedin.com/in/patrick-tobler-6593b912b/

Dennis Mittmann, CTO IAMX https://iamx.id, https://www.linkedin.com/in/dennis-mittmann/

Tim Heidfeld, CEO IAMX https://iamx.id, Compliance Officer finest Investments GmbH,

https://www.linkedin.com/in/tim-heidfeld/

Daniel Maier, CEO Chartered Investment, <https://chartered-investment.com/>, https://www.linkedin.com/in/daniel-maier-a708a253/

Roles

Chartered Investment and Departmental Coordination

Daniel, representing Chartered Investment, is the primary liaison for all related business departments. His responsibilities ensure cohesive integration and coordination across various sectors of the project.

finest Investments

Tim Brückmann and Matteo Coppola are responsible for the overall solution.

IT and Integration

Raul is responsible for the IT integration in all aspects of the project.

Marketing and Legal Oversight

Patrick Tobler leads the marketing efforts, crafting strategies that effectively communicate the project's value and innovation.

Legal, financial terms

Legal matters, data protection, financials terms are overseen by Tim Heidfeld from IAMX, ensuring compliance throughout the project lifecycle.

Please provide a cost breakdown of the proposed work and resources

IT Development

The IT development segment of our project involves critical components such as onboarding, data handling, data security API´s to all partners, .test- and productive environment

To achieve these objectives, we will engage three senior developers, project management, product owner, over a period of 5 months.

Total Cost: 490,000 ADA

Design and Layout

This portion of the budget covers the design, layout, and output formats essential for the application's user interface and user experience components. Effective design is crucial for ensuring that the application is accessible, intuitive, and user-friendly.

Total Cost: 40,000 ADA

Legal Analysis and Agreements

Legal integrity is paramount in projects that handle identity verification and access control to ensure compliance with data protection regulations and to secure intellectual property rights. This budget allocation will cover all necessary legal analysis and the drafting of agreements and preparation of templates.

Total Cost: 240,000 ADA

Publicity, Community Engagement, and Project Management

To ensure the project reaches a wide audience and engages effectively with the community, funds are allocated for publicity and community engagement activities. Additionally, this allocation covers the overall project management, documentation, and reporting to keep stakeholders informed and involved throughout the project lifecycle.

Total Cost: 50,000 ADA

Total Project Budget: 820,000 ADA

The success of the project depends on contractual relationships with the following partners: Liability umbrella investment brokerage, Security Agent, CSSF-regulated securitization company.

Additional information on CSSF-regulated securitization company:

Using a CSSF-regulated securitization company under Luxembourg law in a Swiss DLT-based electronic securities framework might appear counterintuitive, but there are specific strategic and regulatory reasons for this approach. Below are the key justifications:

Access to EU Markets

EU Equivalence Agreements: While Switzerland’s financial services sector benefits from EU equivalence agreements, these are primarily aimed at professional investors. Utilizing a CSSF-regulated securitization company ensures compliance with EU regulations for broader market access, particularly for projects targeting retail investors or mixed investor classes within the EU.

Cross-Border Scalability: Luxembourg’s securitization laws provide a recognized framework for issuing securities across the EU, avoiding potential barriers where Switzerland’s regulatory equivalence might not fully apply.

Securitization Law Advantages

Compartmentalization: Luxembourg’s securitization law allows for the creation of separate compartments for each project or investment, ensuring legal and financial segregation of assets. This structure aligns well with the tokenization of securities under Swiss DLT frameworks.

Flexibility for Complex Structures: Luxembourg offers significant flexibility for structured financial products, such as asset-backed securities or debt instruments, which can be tokenized and managed under Swiss DLT rules while complying with EU laws.

Regulatory Complementarity

Swiss DLT Act vs. CSSF Regulations: The Swiss DLT Act governs ledger-based securities, but when issuing securities aimed at cross-border investors, Luxembourg’s CSSF-regulated securitization vehicles provide complementary compliance for EU jurisdictions.

Institutional Confidence

Investor Trust: Institutional investors across Europe are familiar with Luxembourg’s securitization framework, which is widely recognized for its robustness and compliance with EU financial directives.

Operational Expertise: Luxembourg’s regulatory environment supports securitization companies with deep expertise in managing complex, multi-jurisdictional securities offerings.

Enhanced Liquidity and Infrastructure

Trading Venues: Luxembourg provides access to established trading venues and infrastructure for the distribution and trading of securities, complementing Swiss DLT platforms.

Eurozone Advantage: Using a CSSF-regulated entity allows seamless operations within the Eurozone, eliminating currency and jurisdictional barriers.

How does the cost of the project represent value for money for the Cardano ecosystem?

Project Budget Overview: [820,000 ADA]

The total project cost of 820,000 ADA represents a high-value investment for the Cardano ecosystem, enabling the structured and secure introduction of electronic securities. Each component of the budget is designed to maximize value and align with Cardano’s goals of compliance, scalability, and ecosystem growth.

IT Development [490,000 ADA]

This allocation ensures the development of critical infrastructure, including onboarding processes, data handling systems, and secure API integration, which are foundational for operationalizing electronic securities on Cardano. The investment delivers a robust system architecture, enhancing reliability, functionality, and security for financial applications while increasing the appeal of Cardano as a trusted platform for institutional-grade projects.

Design and Layout [50,000 ADA]

This portion focuses on user interface (UI) and user experience (UX) design, ensuring that the application is accessible, intuitive, and user-friendly. A well-designed platform attracts and retains users, fostering greater adoption rates and ensuring a seamless experience for institutional and professional investors.

Legal Analysis and Agreements [240,000 ADA]

Legal integrity is essential for building trust among users and investors. This allocation funds compliance with FINMA regulations, the drafting of investor agreements, and the preparation of regulatory templates. These activities mitigate risks, strengthen investor confidence, and ensure the project adheres to stringent legal frameworks, critical for operating in regulated markets.

Publicity, Community Engagement, and Project Management [50,000 ADA]

This segment ensures the project achieves broad awareness and stakeholder engagement through targeted publicity and communication efforts. Additionally, it covers comprehensive project management to maintain progress, align with regulatory requirements, and report effectively to stakeholders, fostering trust and confidence in the project’s success.

Maximizing Value for the Cardano Ecosystem

This investment not only addresses the immediate need for a compliant and efficient electronic securities platform but also contributes to the long-term growth, sustainability, and innovation of the Cardano ecosystem. By building secure and user-friendly solutions, fostering legal compliance, and engaging the community, the project positions Cardano as a leader in blockchain-based financial applications.