FLYER'S NOTE: PAYGINE OPEN FINANCIAL PLATFORM

PAYGINE is a financial platform designed to offer cryptocurrency-related services to both individuals and businesses, allowing for easier, faster, and less expensive currency transactions in a variety of usage scenarios. In short, PAYGINE is designed to help consumers and businesses use cryptocurrency as simply and conveniently as any other currency, in everyday life. For individuals, PAYGINE allows people to quickly, easily, and securely:

• Maintain wallets in both fiat currencies (USD, EUR, RMB, etc.) and cryptocurrencies (BTC, ETH, etc.) with the ability to convert funds between them

• Transfer cryptocurrency to and from a bank card

• Pay in retail shops and online stores using their cryptocurrency

• Carry out worldwide, cross-border transfers of any currency with minimal costs

For the business user, PAYGINE allows retailers to accept cryptocurrency as a payment for goods and services at their place of business or online storefronts, and then automatically convert those payments into the currency of their choice.

Creating such a powerful payment and exchange platform from scratch would require major amounts of both time and money in research, development, and testing. However, PAYGINE is licensed to utilize Pay Engine Limited technologies and products, which already have undergone years of successful development and testing and have a proven track record of successful real-world use and support. By leveraging the existing technology solutions created by Pay Engine Limited, PAYGINE will avoid the growing pains and get right down to business. Pay Engine Limited is an international payment processing company founded in April 2012 in the United Kingdom. Its founders included experts from the banking sector, who brought a wide range of experience to the company, including successful projects implemented at American Express, SEB, Bank St-Petersburg, Sberbank, Renaissance Credit, ABN-AMRO and RBS. Pay Engine Limited is the owner of the Best2Pay brand.

In 2014, working together with Visa and MasterCard, Best2Pay developed and launched the Best2Transfer platform. Best2Transfer allows bank customers to repay loans instantly using a Visa or MasterCard credit card issued by any bank. The Best2Transfer platform services were first launched by Home Credit Bank, a leader in the consumer loans market. Today, Best2Pay services are used by finance and technology businesses, e-commerce, and beyond, to service more than 1.5 million clients every month, with a portfolio of more than $18 billion in serviced loans, with the number of end-customers increasing by an average of 34% per month. The Best2Transfer platform was recognized by The National Banking Journal as the product of the year for banks in 2015.

The Best2Pay service offers many advantages over competitors, including:

• Speed & Simplicity: clients can start accepting online payments in just one day

• Safety & Security: Best2Pay has a Level 1 certificate of compliance with international PCI DSS security requirements

• Cost Efficiency: Best2Pay is the only participant in Visa International’s “Bill Payments” program, enabling us to reduce the cost of the transaction interchange fee by 42.8%

PAY ENGINE LIMITED & BEST2PAY9

The Best2Pay service also already includes the provision of information on transactions in the formats of the merchant’s accounting system, the calculation of the commission at the time of payment, SMS (text message) invoicing, IVR (telephone) payments; payment using social networks and instant messenger networks, and more. Best2Pay currently works with more than 50 clients, including banks and other financial services companies. With the Best2Pay platform, tech

With the Best2Pay platform, technologies, and business experience, much of the groundwork has already been developed and tested. With a proven backbone already in place, it is time for the next step: bringing the existing technology together with new innovations in cryptocurrency.

That step is PAYGINE .

Best2Pay – a market leader in online repayment of loans

2015–2017 revenue per month, repayment of loans, and peer-to-peer transfers

(USD, millions)

Why Cryptocurrency?

Cryptocurrency and the innovative blockchain technology behind it are more than passing fads or investments. They help democratize banking and exchange services, making them available to billions of people around the world who are currently not serviced by the existing banking and financial system. With cryptocurrency, no central bank is required. Instead, users can directly exchange currency, goods, or virtually anything of value with other users. Such an exchange is:

• Digital. It does not require physically mailing documents , titles, or satchels of cash.

• Instant. Much like sending an e-mail, the transaction can be transmitted world-wide in seconds.

• Secure. The military-grade encryption used by the system renders it unhackable.

• Worldwide. It is available to anyone, anywhere.

• Non-discriminatory. No central authority can block access or transactions. The possibilities are truly endless, and the advantages are clear. Money can be traded, spent, saved, or used instantly, between friends sitting across a table or strangers from different corners of the Earth. No government can prevent rebels or charities from exchanging and using cryptocurrencies within their borders, nor can they prevent people from taking their funds with them and using them throughout the world—no border searches will detect or confiscate cryptocurrencies. No banks can pick and choose which customers are allowed to open an account, or which countries or regions are worthy of having a bank

branch; instead, anyone with a computer or smartphone can access the system.

CRYPTOCURRENCY & BLOCKCHAIN

On more practical and mundane levels, the ease of digital conversion and worldwide transmission of cryptographic assets enables easy commerce and trade. No more worrying about exchanging cash (at terrible exchange rates) at each airport, or finding traveler’s checks, or finding an ATM that takes your bank card, or finding a merchant that accepts your credit card—and wondering what the foreign exchange fee will be. Instead, by using a virtual wallet on your smartphone, you can securely “carry” your assets with you anywhere you go, and use them anywhere you shop, all instantly and with very low fees. That is the promise of cryptocurrency, and it is only the beginning.

Cryptocurrency Problems & Obstacles

Cryptocurrencies have many advantages over the traditional banking system. Some of the traditional banking system’s barriers and shortcomings that are overcome by cryptocurrency include:

• The possibility of governmental and oligarchic influence;

• Difficulties of companies and entrepreneurs in different countries and regions in reaching mutual settlements;

• Slow speed of transaction processing, currently not meeting the requirements of online business;

• Inflation;

• Lack of transparency; and

• Higher cost of services compared to cryptocurrencies.

Despite the obvious advantages of cryptocurrency, traditional banks are leery of this new form of currency, and many often restrict and limit cryptocurrency transactions, refuse to open accounts utilizing cryptocurrencies, and refuse to work with businesses that utilize cryptocurrency, even when all anti-money laundering (AML) and anti-terrorism (CFT) requirements are met. According to a study conducted at the University of Cambridge, the biggest challenge preventing the majority of companies from providing payment services based on cryptocurrency is the establishment and maintenance of contractual relations with banks and money transfer operators.

CRYPTOCURRENCY & BLOCKCHAIN

Companies who provide such services say that their main barrier is the high costsof ensuring compliance with regulatory requirements. Taking into account the complexity of the regulatory requirements for cryptocurrencies and the high rate at which they change, the task of maintaining and demonstrating compliance with these requirements is complex and very costly. Clamping down on money laundering and tax evasion are currently major focuses of the banking sector. Their abundance of caution in this regard has caused banks to classify legitimate operations as dubious without a valid reason, simply because they were associated with the use of cryptocurrency. It is easier for the vast majority of banks to block an account or transaction dealing with cryptocurrency than to try and understand the essence of the operation. In such cases, the account gets blocked without a practical way of challenging the decision. Challenging a bank for blocking an account can take more than a year, often without concrete results.

We believe that the solution for this problem is obvious: owning and managing

banks that allow clients to store and use cryptocurrencies, while ensuring strict

compliance with anti-money-laundering and anti-terrorism requirements.

Summary of PAYGINE Functionality Cryptocurrency & Blockchain Technology

Put simply, PAYGINE will allow both individuals and businesses to maintain wallets that hold a mix of their preferred fiat currencies and cryptocurrencies, with easy conversion between them; to use a bank card to buy whatever they want online or in stores around the globe (and allow sellers to accept such payments); and to transfer their money to or from any other user in the world instantly and securely. The PAYGINE blockchain—or rather,Paygine Distributed Ledger Technology (DLT)—provides transparent and secure interaction of the platform’s participants. PAYGINE will use blockchain technology in the following ways:

• Building PAYGINE DLT, a decentralized ledger, to register all transactions in the system. All PAYGINE participants receive unique PAYGINE -ID identifiers.

• The information is available only to participants involved in the transaction and to the platform administrator (arbitrator). The transaction receives a unique code in the system, which can be used to obtain detailed information on the operation in real time. The use of blockchain technology makes it possible to monitor the information’s invariability and its safety at the network nodes available on different continents.

• Implementing basic application program interfaces (APIs) for accessing PAYGINE DLT services. Using the PAYGINE -ID, the client can interact with PAYGINE DLT using the API provided. At the first stage, the client will have access to information on his or her own transactions and publicly disclosed information (exchange rate, reference, information, etc.).

Timeline and Stages of Development

The development of the PAYGINE platform will take place in three Stages: entering the European market, entering the US market, and increasing transactions by opening additional branches in southeast Asia and the U.S.

Stage 1

will consist of replicating and adapting existing technologies and services that are successfully operating (the Best2Pay platform) to the European market, under the new Paygine brand. The current

API will be refined and the foundation for the development of new services will be established.

STAGE 1, PHASE 1

This stage will include identifying, selecting, and integrating with a new European partner (a financial institution). This will enable us to provide services to PAYGINE clients immediately after completing the first stage of the development. We anticipate that PAYGINE 'S clients will be various fin-tech and cryptocurrency entities, which we refer to as “clients.” The clients of our clients—who can be individuals as well as entities—are referred to as “customers.”

PAYGINE : THE SOLUTION

Services available at this stage will include:

• E-invoicing;

• International card to card money transfers;

• Transfers from card to account, loans repayment, direct debit;

• International card payments (mass payments, payroll);PAYGINE : THE SOLUTION 28

• Peer-to-peer service for private individuals in three modes:

• Customers are registered on the platform and directly pay for the services of contractors (service provider) from their accounts;

• Contractors (service providers) register on the platform and directly collect money for their goods or services from customers, and then deposit collected funds to their own accounts or cards;

• Secure transactions can be made using the platform: funds are debited from the customer’s account and held (similar to an escrow account). After the successful completion of a transaction, the funds are transferred to the contractor, if the transaction fails, they are returned to the customer.

• Fraud detection.