⚠ Document Status
FINAL DRAFT · AWAITING FOUNDATIONAL COUNSEL REVIEW
This document is a final draft. Algonet's full legal framework has been drafted and submitted for foundational counsel review under the Algonet BH LLC / CFTC Rule 4.7 structure. Formal confirmation is expected within six weeks. Until that review is returned, this document is not yet executed and existing client engagements remain governed by the prior version signed at onboarding. Published here in full for transparency and for the review of prospective qualified investors and their counsel.
Working draft v0.1 — 2026-04-22. QEP definition anchored to CFTC Rule 4.7(a) as consolidated in 17 C.F.R. § 4.7 (2025 edition) — current text downloaded from govinfo.gov. Representation and warranty structure adapted from Goldenwise Capital Management Client Representations & Warranties exhibit (qepfutures.com, 2017). Sanctions and PEP language adapted from CFTC Part 4 Easy Reference Guide (NFA BASIC, 2025).
Legal · VI
The self-attestation every prospective client executes before activation.
Algonet provides the Services under the CFTC Rule 4.7 exemption, which is available only when every client meets the 'Qualified Eligible Person' ('QEP') definition under 17 C.F.R. § 4.7(a). This certification captures that attestation. The Client must answer every question honestly and may withdraw the application at any time before signing. False or misleading answers here constitute a material breach of the Engagement Agreement and may result in criminal liability for fraud.
I — Chapter
Definitions
Accredited Investor: a person meeting the definition in SEC Regulation D, Rule 501(a), principally by having (i) an individual net worth, or joint net worth with the person's spouse, exceeding US$1,000,000 excluding the value of the primary residence, or (ii) an individual income in excess of US$200,000 in each of the two most recent years (or joint income with the person's spouse in excess of US$300,000 in each of those years) and a reasonable expectation of reaching the same income level in the current year.
Portfolio Requirement: the requirement under CFTC Rule 4.7(a)(1)(v) that the Client hold securities and other investments having an aggregate market value of at least US$2,000,000, or hold at least US$200,000 in margin or option premiums deposited with a futures commission merchant over the six most recent months, or a proportional combination of the two as specified in the rule.
Qualified Eligible Person (QEP): a person satisfying both (a) the Accredited Investor definition AND (b) the Portfolio Requirement. A person meeting only the Accredited Investor definition is NOT a QEP.
Politically Exposed Person (PEP): a current or former senior government official, senior military officer, senior executive of a state-owned enterprise, senior political-party official, or the immediate family member or close associate of any of the foregoing.
Sanctioned Person: a person, entity, or jurisdiction subject to sanctions administered by the U.S. Treasury Office of Foreign Assets Control (OFAC), the United Nations Security Council, the European Union, HM Treasury (UK), or any other equivalent sanctions authority.
II — Chapter
Portfolio Requirement Attestation
The Client attests that, as of the date of this certification, the Client holds securities and other investments (excluding primary residence) having an aggregate market value of at least US$2,000,000, OR holds at least US$200,000 in margin or option premiums deposited with a futures commission merchant over the six most recent months, OR a proportional combination of the two that satisfies CFTC Rule 4.7(a)(1)(v).
For purposes of the Portfolio Requirement, "securities and other investments" includes marketable securities (stocks, bonds, ETFs, mutual funds), cash and cash-equivalents held at a broker or investment account for investment purposes, commodity futures positions, and similar investable assets. It does NOT include: real estate held as residence or personal use; business equity owned by the Client where the Client is an active operator; retirement accounts from which the Client cannot freely withdraw; or assets the Client does not personally own.
The Client answers 'Yes' or 'No' to the following question, under penalty of perjury: Do you hold at least US$2,000,000 in a securities portfolio as defined above? [ ] Yes [ ] No. A 'No' answer disqualifies the Client from Algonet's Services.
III — Chapter
Accredited Investor Attestation
The Client attests that the Client satisfies the Accredited Investor test under SEC Regulation D, Rule 501(a), by meeting at least one of the following criteria (the Client selects the specific criterion for the regulatory record):
☐ (a) Individual net worth (or joint net worth with spouse), excluding primary residence, exceeds US$1,000,000.
☐ (b) Individual annual income exceeds US$200,000 in each of the two most recent years, with a reasonable expectation of the same in the current year.
☐ (c) Joint annual income with spouse exceeds US$300,000 in each of the two most recent years, with a reasonable expectation of the same in the current year. (The Client must be legally married to claim this criterion.)
A Client who cannot mark at least one of (a), (b), or (c) is NOT an Accredited Investor and is NOT a QEP.
IV — Chapter
Identity and Residency
Full legal name (as on government-issued identification document): ____________
Date of birth (required for OFAC sanctions screening): ____________
Country of tax residence: ____________
Country of citizenship (if dual, primary): ____________
The Client attests that the Client is a United States person for U.S. federal tax purposes: [ ] Yes [ ] No. If 'No', the Client shall provide a Foreign Tax Identification Number from the Client's country of tax residence: ____________ (the Client shall NOT provide a U.S. Social Security Number in this form; Algonet does not collect SSNs at onboarding — a Form W-9 will be requested through a separate secure channel at the time of first fee payment if the Client is a U.S. person).
The Client attests that the Client's country of residence and country of citizenship are NOT on the list of jurisdictions from which Algonet does not accept clients (currently Cuba, Iran, North Korea, Syria, the Crimea / Donetsk / Luhansk regions of Ukraine, Russian Federation, Belarus, Venezuela, Myanmar / Burma, and Afghanistan). The Client acknowledges that Algonet maintains this list and updates it as sanctions programs change.
V — Chapter
Sanctions and PEP Attestation
The Client attests, under penalty of perjury, that as of the date of this certification the Client: (i) is not the subject of any sanctions designation administered by OFAC (including the SDN List, Sectoral Sanctions Identifications List, or the Foreign Sanctions Evaders List), the UN Security Council, the EU, HMT, or any equivalent sanctions authority; (ii) is not located in, resident in, or a national of a comprehensively-sanctioned jurisdiction; and (iii) is not owned or controlled, directly or indirectly, in whole or in part, by a Sanctioned Person.
The Client attests whether the Client or an immediate family member (spouse, parent, child, or sibling) is a Politically Exposed Person: [ ] Yes [ ] No. A 'Yes' answer does not automatically disqualify the Client but triggers Algonet's enhanced due-diligence review procedure and may delay onboarding.
The Client further attests that the funds to be deposited in the Exchange account and used in connection with the Services derive from legitimate sources and do not represent the proceeds of any unlawful activity. The Client shall provide, if requested by Algonet, documentation supporting the source-of-funds attestation.
VI — Chapter
Investment Experience and Source of Funds
Years of experience trading leveraged derivatives, futures, or cryptocurrency perpetuals: ☐ None ☐ Under 1 year ☐ 1 to 3 years ☐ 3 to 5 years ☐ 5+ years.
Primary source of the funds the Client intends to deposit with the Exchange for the Services: ☐ Employment income ☐ Business profits ☐ Investment returns ☐ Inheritance ☐ Sale of a business ☐ Other (explain): ____________
The Client acknowledges that this information is used for Algonet's anti-money-laundering source-of-wealth analysis and does not itself determine eligibility for the Services (all listed categories are acceptable; Algonet simply needs to understand the origin of the capital).
VII — Chapter
Supporting Documentation
Algonet reserves the right to request, within 14 calendar days following activation of the Services, supporting documentation substantiating this certification. Reasonable supporting documentation includes: a government-issued photo identification document (passport, national ID card, or driver's license); a proof of address dated within the 90 days preceding the request (utility bill, bank statement, or government correspondence); a brokerage statement evidencing the Portfolio Requirement; and, if applicable, a CPA letter or tax return evidencing income or net worth.
If the Client fails to provide requested documentation within 30 calendar days following Algonet's request, Algonet may suspend the Services by dropping the API Credentials. Non-provision of supporting documentation is a material breach of this certification and the Engagement Agreement.
VIII — Chapter
Ongoing Duty to Update
The Client covenants to notify Algonet in writing within 30 calendar days of any material change to the information attested in this certification, including without limitation (i) the Client ceasing to satisfy the QEP criteria; (ii) the Client becoming the subject of a sanctions designation; (iii) the Client becoming a PEP; or (iv) any change in the Client's country of residence or citizenship.
Algonet will request the Client to re-affirm this certification annually (between month 11 and month 13 following each initial certification). Failure to re-affirm within the 2-month grace period will result in Algonet (i) pausing new capital additions and risk-group changes; (ii) pausing new strategy deployments; and (iii) if non-response continues, suspending and ultimately terminating the Services, per the graduated enforcement schedule specified in the Engagement Agreement.
IX — Chapter
Penalty of Perjury; Acknowledgment
The Client declares under penalty of perjury, under the laws of the State of Florida (for U.S. Clients) or under the laws of the State of Israel (for non-U.S. Clients), that the statements made in this certification are true, correct, and complete to the best of the Client's knowledge and belief.
The Client acknowledges that (a) Algonet is relying on this certification to determine the Client's eligibility for the Services under the CFTC Rule 4.7 exemption; (b) misrepresentation of any fact here constitutes a material breach of the Engagement Agreement and will result in immediate termination, forfeiture of any disputed fee amounts, and Algonet's right to recover any losses it suffers as a result; and (c) misrepresentation may also constitute criminal fraud under U.S. or Israeli law.
Signed: ____________________________ Date: ____________
Print name: ____________________________
QEP Certification v0.1 · 2026-04-22 · Each QEP Certification is retained as part of the Algonet regulatory record for the longer of five years (CFTC Rule 1.31) or the retention period required by applicable tax law.
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