Regulatory Approach & Risk Factors

This section provides a high-level overview of how the Company approaches regulation in connection with THAT and the THAT app. It is not legal advice and does not replace the need for users, merchants or other participants to obtain their own professional advice in their relevant jurisdictions.

General Approach

The regulatory treatment of digital assets, wallets, exchanges and related services continues to evolve in many countries. Laws, regulatory guidance and enforcement practices may change over time and may differ significantly between jurisdictions.

The Company’s intention is to design and operate the THAT app and related non-custodial tools, and to structure its activities in relation to the THAT token, in a way that:

• uses non-custodial, user-controlled wallets

• avoids structuring, promoting or using the THAT token, the THAT app or any related products or programs in arrangements that are likely to cause the Company’s activities to be characterized as a traditional financial product (such as a managed investment scheme or derivative), and

• avoids operating a facility through which non-cash payments are made between different persons in circumstances that would cause the Company to be operating a regulated non-cash payment facility.

The THAT token smart contract has already been deployed on public blockchain infrastructure and cannot be unilaterally changed by the Company. References in this section to the Company’s “activities in relation to the THAT token” are about how the token is used, integrated and described, not changes to the underlying contract code.

However, only regulators and courts can make definitive determinations about how specific arrangements are classified. The Company cannot guarantee that regulators will always agree with its interpretation of applicable laws.

Australian Regulatory Environment

Australia is currently the primary focus of the project’s activities. In Australia, the Company has obtained independent legal advice regarding:

• the classification of THAT as a digital asset under Australian law

• the operation of the THAT app as a non-custodial wallet and technical interface, and

• the circumstances in which activities may constitute the operation of a financial product, including a non-cash payment facility, or the provision of financial services under the Corporations Act and related guidance (including ASIC INFO 225 and other relevant materials).

Based on that advice, the Company’s intention is that:

• the THAT token functions as a general-purpose digital asset (similar in nature to other non-pegged cryptocurrencies), and

• the THAT app operates as a non-custodial wallet and toolkit, and not as a product or service under which the Company issues, operates or intermediates a regulated non-cash payment facility or other financial product.

This intention depends on the token and app continuing to operate in the manner described in this whitepaper and related documentation. If features were changed or expanded in the future, the regulatory analysis may also change.

Third-party digital currency exchange (DCE) services

Where the THAT app provides links or integrations to fiat–crypto exchange services in Australia, these services are provided by independent third-party Digital Currency Exchange (DCE) providers. The Company does not itself provide exchange, remittance or payment services and does not receive or hold users’ fiat funds as part of those transactions.

The Company’s intention is to integrate only with DCE providers that:

• are registered with AUSTRAC where required, and

• apply their own know-your-customer (KYC) and anti-money laundering and counter-terrorism financing (AML/CTF) controls in accordance with Australian law.

Users enter into a direct relationship with any DCE provider they choose to use and are subject to that provider’s own terms, onboarding processes and fees. The Company does not control, and cannot guarantee, the ongoing registration, compliance status or performance of any third-party provider.

Other Jurisdictions and International Expansion

The Company may explore making the THAT app and related tools available for download in other countries over time (for example, New Zealand, Japan, the United States, Canada, the United Kingdom or other regions). Before offering materially new features or focusing on a new jurisdiction, the Company’s intention is to obtain local legal advice regarding:

• how THAT and the THAT app are likely to be treated under local law, and

• whether any licenses, registrations or additional controls are required.

The outcome of this analysis may differ between jurisdictions. As a result:

• features available in the THAT app may vary from one country to another

• some integrations (for example, on-ramp, off-ramp or NFT functionality) may be limited, modified or unavailable in certain locations, and

• in some markets, the Company may decide not to offer the app or certain features at all.

The Company cannot guarantee that THAT or the THAT app will be available, lawful to use, or treated in the same way in every jurisdiction.

General Risk Disclosures

Before acquiring, holding or using THAT, users should consider the following non-exhaustive risks and conditions:

Regulatory differences and change

Laws and regulatory expectations for digital assets, wallets and related services differ between countries and can change over time. Future changes may affect how THAT or the THAT app are treated, how they can be used, or whether some features must be modified, restricted or discontinued.

Acquisition channels and counterparty risk

THAT may be available through a range of venues (for example, centralized exchanges, decentralized exchanges, on-ramp providers or peer-to-peer transfers). These venues and services are operated by independent third parties. The Company does not operate an exchange or order book and does not control third-party venues. Users should exercise caution, verify contract addresses from official sources, and use only service providers they consider reputable.

Merchant availability and usage patterns

Some merchants independently choose to accept THAT or other digital assets as consideration for goods and services. The number and location of such merchants may change over time and may differ significantly between regions. The Company does not guarantee that any particular merchant will accept THAT, that any directory listing is accurate or up-to-date, or that a merchant ecosystem will develop or persist.

Market volatility and liquidity

The price of THAT may fluctuate significantly based on supply and demand, trading activity, broader market conditions, liquidity on different venues and other external factors. There is no guarantee that a liquid market will exist for THAT at any given time, or that holders will be able to buy or sell at a particular price.

No rights to returns or ownership

Holding THAT does not give the holder any right to:

• equity or ownership in the Company or any other entity

• dividends, interest, profit-sharing or other distributions, or

• participate in management or governance of a pooled enterprise.

  The token is not designed as an investment product, and there is no promise or guarantee of returns.

Wallet and key management risk

The THAT app is non-custodial. Users are responsible for the security of their devices, wallets and seed phrases. Loss, theft or compromise of a device or recovery information can result in permanent loss of access to digital assets. The Company cannot restore access to a wallet if the user loses their mnemonic phrase or private keys.

Technical and operational risks

Use of THAT and the THAT app depends on public blockchain networks, third-party infrastructure (such as RPC providers and indexers), and in some cases other protocols (such as DEXs or bridges). Bugs, outages, attacks, misconfigurations or other failures in any of these components could result in delays, transaction failures or loss of assets.

Important Disclaimer

Nothing in this whitepaper, including this regulatory section, is intended to constitute financial product advice, legal advice, tax advice or a recommendation to acquire, hold or use THAT or any other digital asset. Each person should:

• make their own enquiries,

• consider their own objectives and circumstances, and

• obtain independent professional advice (including legal, tax and financial advice) before making any decision in relation to THAT or the THAT app.