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A. Treatment of Client VAs

1. VASPs must have in place the necessary policies, systems and controls, appropriate to the nature and scale of their operations, to ensure compliance with this Part V of this Compliance and Risk Management Rulebook.
2. Client VAs are not depository liabilities or assets of the VASP.
3. VASPs shall hold Client VAs in separate VA Wallets from all Virtual Assets of the VASP.
4. VASPs must hold Client VAs on a one-to-one basis and shall not authorise or permit rehypothecation of Client VAs, unless they have explicit prior consent from the client providing discretionary authority to do so, and are appropriately authorised and Licensed by VARA to carry out all relevant VA Activity[ies] in respect of such Virtual Assets.
5. All proceeds related to Client VAs, such as “airdrops”, “staking gains” or similar proceeds shall accrue to the client’s benefit, unless the VASP has the client’s prior consent specified in a written agreement with the client or otherwise. VASPs may decide not to collect or distribute certain proceeds, including where such proceeds are below a value to be determined by the VASP, provided that the VASP has disclosed this to the client and obtained acceptance in accordance with all applicable laws.