Conflict of Interest Policy

Article 1: Purpose

The purpose of this Conflict of Interest Policy is to safeguard the Bitcoin District Initiative’s (hereinafter “the Corporation”) interests when contemplating transactions or arrangements that might benefit the private interests of its officers, directors, or key employees, or result in an excess benefit transaction. This policy supplements, but does not replace, applicable District of Columbia (DC) and federal laws governing conflicts of interest for nonprofit and charitable organizations, including the DC Nonprofit Corporation Act (D.C. Code § 29-401 et seq.) and the IRS “Intermediate Sanctions” rules under Section 4958 of the Internal Revenue Code.

Article 2: Definitions

2.1 Interested Person

An “interested person” is any director, officer, key employee, or member of a committee with board-delegated powers who has a direct or indirect financial interest, as defined below.

2.2 Financial Interest

A person has a financial interest if they have or anticipate having, directly or indirectly, through business, investment, or family (including spouse, parent, sibling, child, or any individual in the same household):

• An ownership or investment interest in any entity with which the Corporation has, or is contemplating, a transaction or arrangement, including Bitcoin-related businesses, cryptocurrency projects, or educational partners.
• A compensation arrangement with the Corporation or any entity/individual involved in a transaction or arrangement with the Corporation.
• A role as an officer, director, partner, significant donor, or lender in any entity with which the Corporation has, or is contemplating, a transaction or arrangement.
• Authority to make material decisions on behalf of any entity with which the Corporation has, or is contemplating, a transaction or arrangement.
• Receipt of compensation, gifts, or favors valued at more than $100 per year from any individual, entity, or organization that does business with, seeks to influence, or is otherwise connected to the Corporation, as such benefits could clearly influence decisions related to the Corporation’s activities.
• Compensation includes direct/indirect remuneration and gifts or favors that are not insubstantial. A financial interest does not automatically constitute a conflict of interest unless determined as such under Article III, Section 2.

Article 3: Procedures

3.1 Duty to Disclose

An interested person must disclose any actual or potential conflict of interest, including the financial interest and all material facts, to the Board of Directors or relevant committee considering the transaction or arrangement.

3.2 Determining Whether a Conflict of Interest Exists

Following disclosure, the interested person may participate in a discussion with the Board or committee to provide relevant information. The interested person must then leave the meeting, and the disinterested members shall discuss and determine by majority vote whether a conflict of interest exists.

3.3 Procedures for Addressing the Conflict of Interest

If a conflict of interest is determined to exist:

1. The interested person may present information to clarify the transaction or arrangement but must leave the meeting during the discussion and vote by disinterested members.
2. Upon a majority vote of disinterested members, the chairperson may appoint a disinterested person or committee to investigate alternatives to the proposed transaction or arrangement.
3. The disinterested members shall determine by majority vote whether a more advantageous alternative is reasonably obtainable without a conflict.
4. If no better alternative exists, the disinterested members shall decide by majority vote whether the transaction or arrangement is in the Corporation’s best interest, fair, and reasonable, and whether to approve it.

3.4 Violations of the Policy

If the Board Ascending suspects a member failed to disclose a conflict, the member is informed and given an opportunity to explain.

After investigation, if nondisclosure is confirmed, the Board or committee takes appropriate disciplinary action.

3.5 Quorum

Interested members may be counted toward a quorum at meetings authorizing transactions under this policy.

Article 4: Records of Proceedings

Minutes of Board and committee meetings must document:

• Names of persons disclosing financial interests, the nature of the interest, actions taken to assess the conflict, and the decision on its existence.
• Attendees of discussions/votes, discussion content (including alternatives), and voting records.

Article 5: Compensation

Directors or committee members receiving compensation from the Corporation cannot vote on matters affecting their own compensation.

They may not provide compensation-related information to committees.

Article 6: Annual Statements

Each director, officer, key employee, and committee member with board-delegated powers must annually sign a statement affirming they:

• Received, read, and understand this policy.
• Agree to comply and report changes or new conflicts.
• Understand the Corporation’s charitable purpose and tax-exempt status requirements.

Article 7: Periodic Reviews

Periodic reviews ensure the Corporation’s operations align with its charitable purposes and tax-exempt status, covering:

• Reasonableness of compensation and benefits (via surveys and arm’s-length bargaining).
• Compliance of partnerships and arrangements with policies, ensuring no private benefit or excess benefit transactions.
• Management and use of Bitcoin holdings, ensuring mission alignment and legal compliance.

Article 8: Use of Outside Experts

The Corporation may use outside advisors (e.g., legal or financial experts) for periodic reviews or complex conflicts, though the Board retains responsibility for decisions.

Article 9: Personal Use of Information and Confidentiality

Directors, officers, and employees must not personally benefit from information gained through service (e.g., Bitcoin market data) until the Board reviews and approves such use to avoid harm to the Corporation.

All non-public information is confidential unless expressly declared otherwise in writing by the Board. Directors, officers, and key employees must sign confidentiality agreements upon appointment.

Article 10: Compliance with DC Nonprofit Laws and IRS Guidelines

This policy complies with the DC Nonprofit Corporation Act, requiring disclosure and management procedures, and IRS 501(c)(3) guidelines, ensuring no private inurement. The Board reviews this policy annually, documenting compliance in minutes.

The DC Nonprofit Corporation Act (D.C. Code § 29-401 et seq.) mandates that nonprofits adopt policies to manage conflicts of interest, ensuring decisions prioritize the Corporation’s interests. This policy meets these requirements by:

Defining “interested persons” and “financial interests” broadly, as required for transparency (D.C. Code § 29-406.31).

Establishing clear disclosure, recusal, and decision-making processes by disinterested directors (D.C. Code § 29-406.31(c)).

Requiring detailed record-keeping of conflict proceedings (D.C. Code § 29-406.50).

Mandating annual affirmations and reviews, aligning with best practices and legal oversight expectations.