Lykke builds a global marketplace for the free exchange of financial assets

Past twelve months

• Crypto bull run

• Rapid growth

• Explosion of fees

• Move to centralized exchange

• Consolidation phase from exploration to focused growth

Agenda

• Organizational structure / Richard Olsen

• Transition update / Nicholas Harwood

• Financials / Philipp Richner

• User base / Marina de Mattos

• Key metrics / Sergey Ivliev

• Product / Mikael Vaivre

• Liquidity / Richard Olsen

• Marketing / Laura Arcade

• Fields / Laura Arcade

• Regulations / Ivan De Casseres

Organizational structure

Richard Olsen

Richard is a pioneer in high-frequency

finance with extensive entrepreneurial

experience. He is also well known for his

academic work. He is the co-founder of

OANDA, a currency information company

and foreign exchange market maker, and a

visiting professor at the Centre for

Computational Finance and Economic

Agents at the University of Essex.

Heinrich Zetlmayer

Heinrich Zetlmayer is the founder of

Blockchain Valley Venture, a spinoff of

Lykke. He co-managed the largest global

e-sports company, served as a member

of IBM's executive board in Switzerland,

and was an international management

consultant at Arthur D. Little. He holds

a Ph.D. in industrial engineering.

Iulian Circo

Iulian Circo thrives at the intersection

of innovation, technology and impact.

He led and turned around large global

operations and delivered ambitious

strategy at scale in some of the world’s

most challenging markets across Africa

and Asia. He is also co-founder of several

technology startups that have

exponential technology at their core.

Lykke Board

Mikhail Nikulin

Mihail is an architect and designer with

hands-on experience in creating market

solutions for financial institutions, including

anti-money laundering, fraud detection, and

financial market compliance. He combines

deep knowledge of financial architecture

with blockchain technology.

Sergey Ivliev

Sergey's dream is to make financial markets

better, faster, and more inclusive. For the past

twenty years, he has been an industry

professional, lecturer, author, event curator,

and board member for academic journals and

expert councils to promote best practices for

financial markets and risk management.

He is the regional director at PRMIA Russia and

associate professor at Perm State University.

The future of Lykke

Organizational design: overview

Principles: agility, autonomy, dependency, high level KPI

Enterprise Finance Risk &security Marketing Products Fintech Engineering Customer

success Field

Enable Deliver

New units

Product line

Andrey Migin

Andrey is an exceptional team leader with a

decade of professional experience in

developing FX marketplace systems. He

brings world-class best practices to drive

the development and maintenance of

mission-critical applications.

Engineering

Management team

Mikaël VaivreProduct

Mikaël graduated from the Swiss Federal

Institute of Technology in Lausanne as an

environmental engineer but quickly shifted

his career, helping to grow a software

startup from three to forty employees.

His experience in software development,

design, and business and product

management helps him to deliver

high-quality, user-driven solutions.

Marina de Mattos

Marina brings over a decade of experience

handling customer success in the financial

services industry. She has established and

managed a network of service centers

around the globe to understand the drivers

of positive customer experience and apply

this knowledge toward more efficient and

effective service delivery.

Customer Success

Management team

Laura Arcade

Laura is an expert online marketer and

brand builder. She brings ten years of

progressive experience in world-leading

companies like P&G, along with various

roles at marketing agencies and startups.

She has a passion for leveraging digital

and online technologies to drive

company growth.

MarketingNick Harwood

Nick has been the head of equity and

managing director of the global markets

department at CJSC Sberbank CIB since

October 2013. He also served as head

of equities for Russia and the CIS countries

at UBS Securities. He has over two decades

of experience in emerging market equities

in Moscow, London, New York, and

Johannesburg.

Enterprise

Transition update

Lykke 2.0 — The transition journey

Built on learnings from previous phase, reviewed strategy and refocused resources on proven models, and put in place executive team to deliver.

Continuous optimization

We are hereIn this phase, the focus is on

optimization at scale and using momentum to trigger new product

cycles and innovation.

Vel

ocity

StabilityInvestments in technology and regulation. Product experimentation. Growth largely organic.

Implementation of business model, and deployment of enterprise-grade and scalable organizational systems and infrastructure. Acceleration of customer acquisition and product roll-out and execution of the regulatory strategy.

Lykke 1.0 Transition Lykke 2.0 / Scaleup

Lykke 2.0 — the goals

The overall purpose of the transition phase was to activate Lykke 2.0

1

Completing a global brand positioning platform

Implementing a new organiza-tional design built around lean principles and accountability

Building and activating a leadership team

Implementing predictable processes that maximize output across the whole organization

2 3 4

Aim: a new organizational design built around lean principles and accountability

1. Most leadership positions have been filled, with two in progress.

2. Continued engagement of the Lykke founders embedded through the creation of the Founders Forum.

3. Success metrics have been defined for the company overall and for all teams.

4. Meaningful progress on regulatory strategy.

5. Further strengthening of strategic alliances with key partners to ensure that Lykke is able to deliver a leading-edge digital financial service offering.

Finance Risk andsecurity Marketing Products Fintech Engineering Customer

success Field

Enable Deliver

Founders Forum

Enterprise

Lykke 2.0 — June 2018, forward in partnership

Lykke 2.0 — Blockchain Valley Ventures

• Spin-off of Lykke

• Important Lykke shareholder

• Accelerator and venture capital firm offering investment, financing, and advisory services

for blockchain-enabled businesses.

Financials

Financials 2017

• Lykke Corp 2017 Financials (audited)

• Lykke Group Consolidated 2017 Financials (audit commences soon)

• Outlook 2018

• Crypto and token values increase

• Financial assets represent the share and regulatory capital of subsidiaries

Bal

ance

she

et

AssetsCHF 1’000

31.12.2017

Cash and cash equivalentsTrade accounts receivableOther short-term receivablesPrepaid expenses and accrued income

CHF 1’00031.12.2016

548.1843.9

1’256.48.5

3’846.3330.8

1’664.9–

Total current assets 2’656.95’842.0

Financial assets 0.1733.8

Total fixed assets 0.1823.6

* Represents Lykke Corp — Swiss entity on a standalone basis

Lykke Corp* 2017 financials (audited)

Total assets 2’657.06’575.9

• Short-term liabilities increase due to several intercompany transactions; deferred taxes also contribute

• No change to share capital

• Profit for 2017 of CHF 2.2 million

Bal

ance

she

et

Liabilities and Shareholder’s equityCHF 1’000

31.12.2017

Trade accounts payableOther short-term liabilitiesAccrued expenses and deferred income

CHF 1’00031.12.2016

209.1223.7329.2

–2’352.21’925.7

Total short-term liabilities 762.04’278.0

Other long-term liabilities 9.0–

Total long-term liabilities 9.00.0

* Represents Lykke Corp — Swiss entity on a standalone basis

Lykke Corp* 2017 financials (audited)

Total liabilities 771.04’278.0

Share CapitalReserves from capital contributionAccumulated losses/gainsProfit/Loss for the yearTreasury shares

128.62’862.2

(175.0)(745.8)(184.0)

128.62’862.2(920.7)

2’206.2(1’978.4)

Total shareholder’s equity 1’886.02’297.9Total liabilities and shareholder’s equity 2’657.06’575.9

• Operating income increase driven by both operational activities and intercompany relationships

• Operating costs increase to support the activity in the Swiss entity and subsidiaries

• Growth in financial income offsets operating loss, delivering a net gain for the year

Inco

me

stat

emen

t IncomeCHF 1’000

2017

Income from projects and advisoryOther income

CHF 1’0002016

163.5685.0

2’675.23’331.1

Total operating income 848.56’006.2

* Represents Lykke Corp — Swiss entity on a standalone basis

Lykke Corp* 2017 financials (audited)

Operating expensesPersonnel expensesBusiness expensesAdministration expensesAdvertising expendituresDepreciation and impairment losses on non-current assets

(2’199.8)(98.3)(20.9)(272.1)(101.5)

0

(7’348.2)(1’439.2)

(73.4)(955.1)(363.1)

(1’108.4)

Operating expenses (2’692.6)(11’287.6)

Operating result (1’844.1)(5’281.3)

Financial resultNon-operational costs/incomeExtraordinary, non-recurring costs/income

1’099.90.12.1

7’890.40.0

(11.4)

Gain/(Loss) for the year before taxes (741.9)2’597.7

Direct taxes (3.9)(391.4)

Gain/(Loss) for the year (745.8)2’206.2

• Consolidated results demonstrate materiality of the UK exchange

• Client accounts drive both the increase in assets and in liabilities

• All client assets in colored coins are backed by assets in crypto, accounts receivable from credit card providers, and cash on bank accounts

• Consolidated profit for 2017 of CHF 4.6 million

Bal

ance

she

et

AssetsCHF 1’000

31.12.2017

Cash and cash equivalentsTrade accounts receivableOther short-term receivablesInventoryPrepaid expenses and accrued income

CHF 1’00031.12.2016

733.2161.4137.5

895.68.5

12’570.75’566.7

18.35’984.5

29.1

Total current assets 1’936.324’169.3Total assets 1’936.324’169.3

Liabilities and Shareholder’s equity

Trade accounts payableOther short-term liabilities

209.1659.7

13.420’267.3

Total short term liabilities 868.820’280.7

Long-term liabilities 9.00–

Total long term liabilities 9.00–Total liabilities 877.820’280.7

Share capitalLegal capital reservesReserves from capital contributionAccumulated lossesLoss carried forwardGain / (Loss) for the yearTreasury sharesTranslation reserve

128.6–

2’862.2–

(175.0)(1’617.7)(184.0)

44.4

128.6–

2’862.2–

(1’812.7)4’644.1

(1’978.4)44.8

Total shareholder’s equity 1’058.53’888.6Total liabilities and Shareholder’s equity 1’936.324’169.3

* Grant Thornton review of consolidation commencing soon

Lykke Group* consolidated 2017 financials

• Operating income increase driven by both the UK exchange and the Swiss projects and advisory activity

• Operating costs increase to support the activity across the group

• Growth in financial income offsets operating loss, delivering a net gain for the year

Inco

me

stat

emen

t IncomeCHF 1’000

2017

Operating income

CHF 1’0002016

163.911’865.3

Total operating income 163.911’865.3

* Grant Thornton review of consolidation commencing soon

Lykke Group* consolidated 2017 financials

Operating expensesPersonnel expensesBusiness expensesAdministration expensesAdvertising expenditures

(2’246.8)(98.3)(20.9)(272.1)(101.5)

(10’330.1)(2’125.4)

(87.7)(1’235.0)

(363.1)

Operating expenses (2’739.6)(14’141.3)Operating result (2’575.7)(2’276.0)

Financial resultNon-operational costs/income

959.62.3

7’322.9(11.4)

Gain / (Loss) for the year (1’617.7)4’644.1

Profit / (Loss) for the year before taxes

Direct taxes

5’035.5 1’613.8

(391.4) (3.9)

Outlook 2018

• Overall trend reversal of crypto asset values

• H1 absorbed by consolidation and transition into Lykke 2.0

• Momentum from rollout of revised strategy during H2

User base

Jul 2017 Aug 2017 Sep 2017 Oct 2017 Nov 2017 Dec 2017 Jan 2018 Feb 2018 Mar 2018 Apr 2018 May 2018 Jun 2018*

New accounts opened

1’000

3’200

4’500 4’100 3’700

7’100

16’600

13’100

5’900

4’0002’900

3’400

10’000

Jul 2017 Aug 2017 Sep 2017 Oct 2017 Nov 2017 Dec 2017 Jan 2018 Feb 2018 Mar 2018 Apr 2018 May 2018 Jun 2018*

Active users

9’000

8’000

7’000

6’000

5’000

4’000

3’000

4’400

1’000

2’000

2’900

3’600 3’500 3’300

5’000

8’8009’400

3’800

2’800 2’900

5’900

14K

Jan 2018

Registered users vs KYC status

2K

4K

6K

8K

10K

12K

Feb 2018 Mar 2018 Apr 2018 May 2018

12.8 K

5.8 K

4.0 K

2.8 K 3.3 K

9.2 K

3.5 K

4.8 K

1.0 K

3.5 K

0.4 K2.5 K 3.0 K

KYC status: Ok Rejected Unverified Total client count

Key metrics

250 M

200 M

150 M

100 M

50 M

Jun 2017 Jul 2017 Aug 2017 Sep 2017 Oct 2017 Nov 2017 Dec 2017 Jan 2018 Feb 2018 Mar 2018 Apr 2018 May 2018 Jun 2018*

Type: Wallet HFT-API

Trading volume

$ 106MAvg volume per month

Trading volume structure

89%4FX, BTC, ETH

8%LKK, LKKxY

3%Altcoins,

ERC20-tokens

20 M

15 M

10 M

5 M

0 M

Net fiat cash-ins/cash-outs

20 M

15 M

Jun 2017 Jul 2017 Aug 2017 Sep 2017 Oct 2017 Nov 2017 Dec 2017 Jan 2018 Feb 2018 Mar 2018 Apr 2018 May 2018 Jun 2018*-5 M

$ 2MAvg net fiat

inflow per month

Cash and ALM overview

Jun 20181.3

Cryptocurrencies

–15.5Liabilities

1.3Net liquidity

15.5Cash

Jun 2017 1.0Cryptocurrencies

–1.2Liabilities

5.2Net liquidity

5.4Cash

$ 1.3MNet liquidity (as of June 1)

$ 4MBeing raised (no dilution)

Product

Internal process improvements

• Internal structure: from silos to cross-functional product teams

• We hired and empowered product owners for each product

• Most of the teams are now agile, adapting the scrum framework to their needs, increasing development velocity

• Noticeable improvements in communication, predictability, capacity to plan

Focus on core product, quality, and UX

• Background work: fixing technical debts, improving security, identifying UX bottlenecks

• Prioritize the delivery of our web trading platform

• Conceptualize, design, and plan our next product iterations, simplifying the UX and streamlining the user flow — according to community feedback

• UX improvement visible in the next redesign of Lykke Wallet, and in our web trading platform (web terminal, fund management, web KYC)

• Both are expected to be delivered this summer (Q3 2018)

Next iteration: mobile redesign preview

Next iteration: mobile redesign preview

Next iteration: web trading platform preview

Web terminal: continuous improvement

Next iteration: web trading platform preview

Innovation in trading: the AlgoStore

Innovation in trading: the AlgoStore

• We kept working in the background on some innovative products

• The AlgoStore enables anyone — even with low tech or financial skills — to pick an algo, tweak some parameters, try it on past data with a fake wallet, and finally let it run with real funds

• Making algo trading simple

• Interesting for advanced traders: very low latency

• Status: close to MVP; first beta expected in Q3 2018

Designing the future of Lykke

• The future of Lykke is not only about trading

• The cryptomarket is still in its infancy

• We aim to truly democratize finance through an ecosystem of apps that are accessible, reliable and easy to use

• Market research: help refine the product vision to broaden our audience for quick yet sustainable growth

• New products at the concept phase; more info before the end of the year

Liquidity

Liquidity

• Passport requirement

• Focus on improving liquidity

• Liquidity strategy:

• External

• Inhouse

• No fee strategy for retail

• Smart fees for professionals

• Marketing push

• Algo store

• Third-party market makers

Users generate liquidity

Lykke liquidity

• Market making engine

• Integration with other exchanges

• Cash and risk management

• Alpha engine

• Investment products of liquidity provision

Marketing

Where do we stand today?

90’000Registered users

Marketing goal for 2018/2019

650’000Registered users

How are we going to get there?

Getting the basics right: a new marketing organisation

Getting the basics right: a new brand strategy for Lykke

Getting the basics right : Brand strategy development process

Align consumer proposition

Design business proposition

Develop global communication platform

Prepare market launch

Execute market entry

! Core consumer target

! Communication message strategy

Q2 2018 Q2/Q3 2018 Q3 2018 Q3 2018 Q3/Q4 2018

! Holistic communication brief

! Communication Idea

! Communication plan choices

! Agency call for work

! Communication platform finalized

! Global marketing strategy finalized

! Local marketing strategy

! Local communication plans (including budget)

! Final customized execution

! Execute marketing campaigns

! Measure results and adapt strategy as needed

Field

Role of the Lykke Field Team

Keeping up to date with the latest regulatory development in different parts of the world.

Providing localization feedbacks on how best to enter different markets.

Being the anchoring point of contact for stakeholders in their respective region.

Where are we today?

EuropeUK & NL Cyprus

Demetrios Zamboglou

Middle EastDubai

Manuel Rensink

Asia-PacificSingapore

Quah Zheng Wei

AfricaSouth Africa

Tobie van der Spuy

HQ SwitzerlandThe AmericasNew York

Victor Maniaci

Field strategy

Core characteristics

Lykke Light Fast | Scalable | Profitable Singapore, Dubai, South Africa

Possible use cases

Lykke Local Regulated | Sustainable Cyprus, Switzerland, Asian market

Regulation

Regulation strategy for the Lykke Exchange

Lykke Exchange

Formerly unregulated tokens are becoming regulated

Lykke aims to offer a broad range of financial products

Regulation strategy

Exchange license: to operate a marketplace for regulated instruments

Organized Trading Facility (OTF) in Switzerland

! Lykke can be a market maker to our own exchange

! Progressive regulator

! No services of other financial institutions required

Cyprus Investment Firm

Trades on the OTF for investors from the EEA (EU+)

Recent regulatory achievements

• Cyprus — CySEC CIF License provisional approval

• Singapore — MAS registered as Stored Value Facility

• Australia — AUSTRAC registered as Digital Currency Exchange

Please go to coinholdermeeting2018.lykke.com to share your questions and vote on the annual report.

Thank you!